Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Apr. 30, 2017 | May 17, 2017 | |
Document Information [Abstract] | ||
Entity Registrant Name | Palo Alto Networks Inc | |
Entity Central Index Key | 1,327,567 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year End Date | --07-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 91,823,907 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 692 | $ 734.4 |
Short-term investments | 680 | 551.2 |
Accounts receivable, net of allowance for doubtful accounts of $0.7 and $2.4 at April 30, 2017 and July 31, 2016, respectively | 364.1 | 348.7 |
Prepaid expenses and other current assets | 159.1 | 139.7 |
Total current assets | 1,895.2 | 1,774 |
Property and equipment, net | 192.3 | 117.2 |
Long-term investments | 719.1 | 652.8 |
Goodwill | 238.8 | 163.5 |
Intangible assets, net | 56.5 | 44 |
Other assets | 148.2 | 106.7 |
Total assets | 3,250.1 | 2,858.2 |
Current liabilities: | ||
Accounts payable | 33.2 | 30.2 |
Accrued compensation | 76.4 | 73.5 |
Accrued and other liabilities | 60.1 | 39.2 |
Deferred revenue | 885 | 703.9 |
Total current liabilities | 1,054.7 | 846.8 |
Convertible senior notes, net | 518.4 | 500.2 |
Long-term deferred revenue | 726.8 | 536.9 |
Other long-term liabilities | 137.1 | 79.4 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock; $0.0001 par value; 100.0 shares authorized; none issued and outstanding at April 30, 2017 and July 31, 2016 | 0 | 0 |
Common stock and additional paid-in capital; $0.0001 par value; 1,000.0 shares authorized; 91.8 and 90.5 shares issued and outstanding at April 30, 2017 and July 31, 2016, respectively | 1,615.8 | 1,515.5 |
Accumulated other comprehensive income (loss) | (4.2) | 1 |
Accumulated deficit | (798.5) | (621.6) |
Total stockholders’ equity | 813.1 | 894.9 |
Total liabilities and stockholders’ equity | $ 3,250.1 | $ 2,858.2 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts (in usd) | $ 0.7 | $ 2.4 |
Stockholders' equity: | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100 | 100 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 91.8 | 90.5 |
Common stock, shares outstanding (in shares) | 91.8 | 90.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Revenue: | ||||
Product | $ 164.2 | $ 162.1 | $ 496.8 | $ 479.7 |
Subscription and support | 267.6 | 183.7 | 755.7 | 498 |
Total revenue | 431.8 | 345.8 | 1,252.5 | 977.7 |
Cost of revenue: | ||||
Product | 49.7 | 43.2 | 137.7 | 126.9 |
Subscription and support | 74 | 51.7 | 200.4 | 141.4 |
Total cost of revenue | 123.7 | 94.9 | 338.1 | 268.3 |
Total gross profit | 308.1 | 250.9 | 914.4 | 709.4 |
Operating expenses: | ||||
Research and development | 86 | 74 | 260.1 | 207.7 |
Sales and marketing | 226.9 | 195.9 | 673.7 | 537.8 |
General and administrative | 44.3 | 33.5 | 133.1 | 98.5 |
Total operating expenses | 357.2 | 303.4 | 1,066.9 | 844 |
Operating loss | (49.1) | (52.5) | (152.5) | (134.6) |
Interest expense | (6.2) | (5.8) | (18.3) | (17.4) |
Other income, net | 2.1 | 1 | 7.3 | 5.7 |
Loss before income taxes | (53.2) | (57.3) | (163.5) | (146.3) |
Provision for income taxes | 7.7 | 6.8 | 14.9 | 15 |
Net loss | $ (60.9) | $ (64.1) | $ (178.4) | $ (161.3) |
Net loss per share, basic and diluted | $ (0.67) | $ (0.73) | $ (1.97) | $ (1.86) |
Weighted-average shares used to compute net loss per share, basic and diluted | 91 | 87.8 | 90.5 | 86.5 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Net loss | $ (60.9) | $ (64.1) | $ (178.4) | $ (161.3) |
Other comprehensive income (loss), net of tax: | ||||
Change in unrealized gains (losses) on investments | 0 | 1.3 | (4.7) | 0.7 |
Change in unrealized gains (losses) on cash flow hedges | 0.9 | 0 | (0.5) | 0 |
Other comprehensive income (loss) | 0.9 | 1.3 | (5.2) | 0.7 |
Comprehensive loss | $ (60) | $ (62.8) | $ (183.6) | $ (160.6) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Apr. 30, 2017 | Apr. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (178.4) | $ (161.3) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Share-based compensation for equity based awards | 356.8 | 283.2 |
Depreciation and amortization | 43.1 | 30.7 |
Amortization of investment premiums, net of accretion of purchase discounts | 2.1 | 2.4 |
Amortization of debt discount and debt issuance costs | 18.3 | 17.4 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable, net | (14.9) | (55.3) |
Prepaid expenses and other assets | (49.6) | (17.8) |
Accounts payable | 2.8 | 11.7 |
Accrued compensation | 1.7 | (23.4) |
Accrued and other liabilities | 77 | 28.2 |
Deferred revenue | 370.1 | 355.5 |
Net cash provided by operating activities | 629 | 471.3 |
Cash flows from investing activities | ||
Purchases of investments | (726.9) | (830.1) |
Proceeds from sales of investments | 0 | 137.4 |
Proceeds from maturities of investments | 520.7 | 409.6 |
Business acquisitions, net of cash acquired | (90.7) | 0 |
Purchases of property, equipment, and other assets | (114.2) | (56.2) |
Net cash used in investing activities | (411.1) | (339.3) |
Cash flows from financing activities | ||
Repurchases of common stock | (295.1) | 0 |
Proceeds from sales of shares through employee equity incentive plans | 45.8 | 42.2 |
Payments for taxes related to net share settlement of equity awards | (11) | 0 |
Net cash provided by (used in) financing activities | (260.3) | 42.2 |
Net increase (decrease) in cash and cash equivalents | (42.4) | 174.2 |
Cash and cash equivalents—beginning of period | 734.4 | 375.8 |
Cash and cash equivalents—end of period | $ 692 | $ 550 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Palo Alto Networks, Inc. (the “Company,” “we,” “us,” or “our”), located in Santa Clara, California, was incorporated in March 2005 under the laws of the State of Delaware and commenced operations in April 2005. We offer a next-generation security platform that empowers enterprises, service providers, and government entities to secure their organizations by safely enabling applications running on their networks and by preventing breaches that stem from targeted cyber attacks. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 , filed with the Securities and Exchange Commission on September 8, 2016. Our condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Our condensed consolidated financial statements are unaudited, but include all adjustments of a normal recurring nature necessary for a fair presentation of our quarterly results. We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. Certain prior period amounts have been adjusted as a result of our voluntary change in accounting policy for sales commissions, our early adoption of new accounting guidance related to share-based payments, and our adoption of new accounting guidance related to debt issuance costs. Refer to “Summary of Significant Accounting Policies” and “Recent Accounting Pronouncements” below for more information. Our condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 . Summary of Significant Accounting Policies There have been no material changes to our significant accounting policies as of and for the nine months ended April 30, 2017 , as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 , except for our voluntary change in accounting policy related to sales commissions and our early adoption of the new share-based payment accounting guidance discussed below. Change in Accounting Policy for Sales Commissions Effective August 1, 2016, we voluntarily changed our accounting policy for sales commissions that are incremental and directly related to non-cancelable customer sales contracts from recording an expense when incurred to deferral and amortization of the sales commissions over the term of the related contract in proportion to the recognized revenue. We believe this change in accounting policy is preferable as the direct and incremental commission costs are closely related to the associated revenue, and therefore should be deferred and recognized as an expense over the same period that the related revenue is recognized. Short-term deferred commissions are included in prepaid expenses and other current assets, while long-term deferred commissions are included in other assets in our condensed consolidated balance sheets. The amortization of deferred commissions is included in sales and marketing expense in our condensed consolidated statements of operations. The adoption of this accounting policy change has been applied retrospectively to all prior periods presented in this Quarterly Report on Form 10-Q, in which the cumulative effect of the change of $71.8 million has been reflected in accumulated deficit as of August 1, 2015, the beginning of the earliest period presented. The following tables present the changes to financial statement line items as a result of the accounting policy change for the periods presented in our condensed consolidated financial statements (in millions, except per share data): April 30, 2017 July 31, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Balance Sheets Prepaid expenses and other current assets $ 99.4 $ 59.7 $ 159.1 $ 84.8 $ 54.9 $ 139.7 Other assets 91.7 56.5 148.2 64.6 50.1 114.7 Other long-term liabilities 136.7 0.4 137.1 79.4 — 79.4 Accumulated deficit $ (914.3 ) $ 115.8 $ (798.5 ) $ (726.6 ) $ 105.0 $ (621.6 ) Three Months Ended April 30, 2017 Three Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 234.6 $ (7.7 ) $ 226.9 $ 202.0 $ (6.1 ) $ 195.9 Operating loss (56.8 ) 7.7 (49.1 ) (58.6 ) 6.1 (52.5 ) Provision for income taxes 7.3 0.4 7.7 6.8 — 6.8 Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Net loss per share, basic and diluted $ (0.75 ) $ 0.08 $ (0.67 ) $ (0.80 ) $ 0.07 $ (0.73 ) Weighted-average shares used to compute net loss per share, basic and diluted 91.0 — 91.0 87.8 — 87.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Comprehensive loss $ (67.3 ) $ 7.3 $ (60.0 ) $ (68.9 ) $ 6.1 $ (62.8 ) Nine Months Ended April 30, 2017 (1) Nine Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 684.8 $ (11.1 ) $ 673.7 $ 547.9 $ (10.1 ) $ 537.8 Operating loss (163.6 ) 11.1 (152.5 ) (144.7 ) 10.1 (134.6 ) Provision for income taxes 14.6 0.3 14.9 15.0 — 15.0 Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Net loss per share, basic and diluted $ (2.09 ) $ 0.12 $ (1.97 ) $ (1.98 ) $ 0.12 $ (1.86 ) Weighted-average shares used to compute net loss per share, basic and diluted 90.5 — 90.5 86.5 — 86.5 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Comprehensive loss $ (194.4 ) $ 10.8 $ (183.6 ) $ (170.7 ) $ 10.1 $ (160.6 ) ______________ (1) Amounts reflect an adjustment for the three months ended October 31, 2016, due to our early adoption of new share-based payment accounting guidance in our second quarter of fiscal 2017. Refer to “Recent Accounting Pronouncements” below for more information. This change in accounting policy does not affect our balance of cash and cash equivalents and, as a result, did not change net cash flows from operating, investing, or financing activities, or materially impact any individual line items presented in our condensed consolidated statement of cash flows for the nine months ended April 30, 2016 . Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance simplifying several aspects of the accounting for employee share-based payment transactions. The new standard requires us to recognize excess tax benefits or deficiencies as income tax expense or benefit in the period in which they occur, rather than additional paid-in capital, and also requires us to recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. In addition, excess tax benefits should be classified as an operating activity, along with other income tax cash flows, instead of a financing activity in our condensed consolidated statements of cash flows. The standard also allows us to make an accounting policy election to account for forfeitures of share-based payment awards when they occur, rather than estimate expected forfeitures. We elected to early adopt the standard in our second quarter of fiscal 2017, which required us to reflect any adjustments related to the adoption as of the beginning of the fiscal year. The impact of the adoption on our condensed consolidated financial statements was as follows: • Income tax accounting - We adopted the guidance related to the timing of when excess tax benefits are recognized on a modified retrospective basis. As a result, we recorded the cumulative effect of the change as a $3.5 million reduction to accumulated deficit as of August 1, 2016, to reflect the recognition of excess tax benefits in prior years, with a corresponding adjustment to deferred tax assets and long-term tax liabilities. We adopted the guidance related to the recognition of excess tax benefits and deficiencies as income tax expense or benefit on a prospective basis. • Cash flow presentation of excess tax benefits - We elected to adopt the guidance related to the presentation of excess tax benefits in our condensed consolidated statements of cash flows on a retrospective basis, which increased net cash provided by operating activities by $0.7 million for the nine months ended April 30, 2016, with a corresponding decrease to net cash provided by financing activities. • Forfeitures - We elected to account for forfeitures when they occur and adopted this change on a modified retrospective basis. As a result, we recorded the cumulative effect of the change as a $2.0 million increase to accumulated deficit as of August 1, 2016. The adoption of the standard also impacted our previously reported results for the three months ended October 31, 2016, as presented in the following tables (in millions, except per share data): October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Balance Sheets Other assets $ 102.0 $ 1.7 $ 103.7 Other long-term liabilities 85.8 (5.6 ) 80.2 Common stock and additional paid-in capital 1,542.2 0.9 1,543.1 Accumulated deficit $ (683.4 ) $ 6.4 $ (677.0 ) Three Months Ended October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Statements of Operations Total cost of revenue (1) $ 101.3 $ (0.1 ) $ 101.2 Total operating expenses (1) 346.7 (0.8 ) 345.9 Provision for income taxes 8.4 (4.0 ) 4.4 Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Net loss per share, basic and diluted $ (0.69 ) $ 0.06 $ (0.63 ) Weighted-average shares used to compute net loss per share, basic and diluted 89.8 — 89.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Comprehensive loss $ (64.7 ) $ 4.9 $ (59.8 ) Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities $ 203.3 $ 0.2 $ 203.5 Net cash used in financing activities $ (27.1 ) $ (0.2 ) $ (27.3 ) ______________ (1) Adjustments consist of share-based compensation, which was impacted by our policy election to account for forfeitures when they occur. The impact of adoption on each cost and expense line item within these subtotals was not significant. In April 2015, the FASB issued new authoritative guidance on fees paid in a cloud computing arrangement. The standard requires customers in a cloud computing arrangement to evaluate whether the arrangement includes a software license. If the arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted the standard in our first quarter of fiscal 2017 on a prospective basis. Our adoption of this standard did not have a material impact on our condensed consolidated financial statements. In April 2015, the FASB issued updated authoritative guidance to simplify the presentation of debt issuance costs. The amended standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts, instead of being presented as an asset. We adopted the standard in our first quarter of fiscal 2017 on a retrospective basis, and as a result, we reduced other assets and convertible senior notes, net by $8.0 million on our condensed consolidated balance sheets as of July 31, 2016. Recently Issued Accounting Pronouncements In January 2017, the FASB issued authoritative guidance simplifying the subsequent measurement of goodwill. The standard eliminates Step 2 of the current goodwill impairment test, which requires companies to determine the implied fair value of goodwill when measuring the amount of impairment loss. Under the new standard, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, with the loss limited to the total amount of goodwill allocated to that reporting unit. The standard is effective for us for our first quarter of fiscal 2021 and will be applied on a prospective basis. Early adoption is permitted. We do not expect the adoption of the standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued authoritative guidance clarifying the definition of a business to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In October 2016, the FASB issued authoritative guidance requiring the recognition of income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a modified retrospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued new authoritative guidance addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are presented and classified in the statement of cash flows. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a retrospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued new authoritative guidance on the accounting for credit losses on most financial assets and certain financial instruments. The standard replaces the existing incurred loss model with an expected credit loss model for financial assets measured at amortized cost, including trade receivables, and requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The standard is effective for us for our first quarter of fiscal 2021 and will be applied on a modified retrospective basis. Early adoption is permitted beginning our first quarter of fiscal 2020. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In February 2016, the FASB issued new authoritative guidance on lease accounting. Among its provisions, the standard requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for operating leases and also requires additional qualitative and quantitative disclosures about lease arrangements. The standard is effective for us for our first quarter of fiscal 2020 and will be applied on a modified retrospective basis, with the option to elect certain practical expedients. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In May 2014, the FASB issued new authoritative guidance on revenue from contracts with customers. The new standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires significantly expanded disclosures about revenue recognition. The FASB subsequently delayed the effective date of the standard by one year and as a result, the standard is now effective for us for our first quarter of fiscal 2019 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the guidance; or (ii) retrospective with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures as defined per the guidance. Early adoption as of the original effective date is permitted. We do not plan to early adopt, and accordingly, we will adopt the new standard in our first quarter of fiscal 2019. We are continuing to evaluate the impact of the new standard on our accounting policies, processes, and system requirements, and have assigned cross-functional internal resources and engaged third-party service providers to assist in our evaluation and system implementation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. We are also continuing to evaluate adoption methods and the potential impact that the implementation of this standard will have on our condensed consolidated financial statements, but have not yet determined whether the effect will be material. However, we believe this new standard will impact our accounting for revenue arrangements in the following areas: • removal of the current limitation on contingent revenue may result in revenue being recognized earlier for certain contracts; • term license revenue associated with our virtual firewalls will be recognized upfront; • allocation of revenue related to software due to the removal of the residual method of revenue recognition; and • amortization period for deferred commissions. We will continue to assess the new standard along with industry trends and additional interpretive guidance, and may adjust our implementation plan accordingly. We expect to finalize our adoption method and assessment of the impact that the implementation of this standard will have on our condensed consolidated financial statements by the end of fiscal 2017. |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We categorize assets and liabilities recorded at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows: • Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. • Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The following table presents the fair value of our financial assets and liabilities using the above input categories as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents: U.S. government and agency securities $ — $ 19.0 $ — $ 19.0 $ — $ — $ — $ — Total cash equivalents — 19.0 — 19.0 — — — — Short-term investments: Commercial paper — 15.0 — 15.0 — 3.0 — 3.0 Corporate debt securities — 160.1 — 160.1 — 121.4 — 121.4 U.S. government and agency securities — 504.9 — 504.9 — 426.8 — 426.8 Total short-term investments — 680.0 — 680.0 — 551.2 — 551.2 Long-term investments: Certificates of deposit — 5.4 — 5.4 — 5.4 — 5.4 Corporate debt securities — 176.1 — 176.1 — 166.1 — 166.1 U.S. government and agency securities — 537.6 — 537.6 — 481.3 — 481.3 Total long-term investments — 719.1 — 719.1 — 652.8 — 652.8 Total assets measured at fair value $ — $ 1,418.1 $ — $ 1,418.1 $ — $ 1,204.0 $ — $ 1,204.0 Accrued and other liabilities: Foreign currency forward contracts $ — $ 1.2 $ — $ 1.2 $ — $ — $ — $ — Total accrued and other liabilities — 1.2 — 1.2 — — — — Total liabilities measured at fair value $ — $ 1.2 $ — $ 1.2 $ — $ — $ — $ — Refer to Note 7 . Convertible Senior Notes for the carrying amount and estimated fair value of our convertible senior notes as of April 30, 2017 and July 31, 2016 . |
Investments (Notes)
Investments (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale investments as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Certificates of deposit $ 5.4 $ — $ — $ 5.4 Commercial paper 15.0 — — 15.0 Corporate debt securities 336.6 0.2 (0.6 ) 336.2 U.S. government and agency securities 1,064.2 0.1 (2.8 ) 1,061.5 Total $ 1,421.2 $ 0.3 $ (3.4 ) $ 1,418.1 July 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Certificates of deposit $ 5.4 $ — $ — $ 5.4 Commercial paper 3.0 — — 3.0 Corporate debt securities 286.7 0.8 — 287.5 U.S. government and agency securities 907.3 0.9 (0.1 ) 908.1 Total $ 1,202.4 $ 1.7 $ (0.1 ) $ 1,204.0 Unrealized losses related to these investments are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell and it is not likely that we would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. As a result, there were no other-than-temporary impairments for these investments at April 30, 2017 and July 31, 2016 . The following table summarizes the amortized cost and fair value of our available-for-sale investments as of April 30, 2017 , by contractual years-to-maturity (in millions): Amortized Cost Fair Value Due within one year $ 699.7 $ 699.0 Due between one and three years 721.5 719.1 Total $ 1,421.2 $ 1,418.1 |
Derivative Instruments (Notes)
Derivative Instruments (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments As a global business, we are exposed to currency exchange rate risk. Substantially all of our revenue is transacted in U.S. dollars, however, a portion of our operating expenditures are incurred outside of the United States and are denominated in foreign currencies, making them subject to fluctuations in foreign currency exchange rates. We enter into foreign currency derivative contracts with maturities of 12 months or less which we designate as cash flow hedges to manage the foreign currency exchange rate risk associated with these expenditures. These derivative contracts expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We mitigate this credit risk by transacting with major financial institutions with high credit ratings and also enter into master netting arrangements, which permit net settlement of transactions with the same counterparty. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments. We do not enter into derivative contracts for trading or speculative purposes. Our derivative financial instruments are recorded at fair value, on a gross basis, as either assets or liabilities in our condensed consolidated balance sheets. Gains or losses related to the effective portion of our cash flow hedges are recorded as a component of accumulated other comprehensive income (“AOCI”) in our condensed consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction in our condensed consolidated statements of operations when the underlying hedged transaction is recognized in earnings. Any gains or losses related to the ineffective portion of our cash flow hedges are recorded immediately in other income (expense), net in our condensed consolidated statements of operations. If it becomes probable that the hedged transaction will not occur, the cumulative unrealized gain or loss is reclassified immediately from AOCI into other income (expense), net. Gains or losses related to non-designated derivative instruments are recognized in other income (expense), net each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Derivatives designated as cash flow hedges are classified in our condensed consolidated statements of cash flows in the same manner as the underlying hedged transaction, primarily within cash flows from operating activities. Beginning August 2016, we entered into forward contracts to hedge the foreign currency exchange rate risk arising from our euro-denominated expenditures to be incurred during the fiscal year ending July 31, 2017. As of April 30, 2017 , the total notional amount of our outstanding foreign currency forward contracts was $37.5 million . Refer to Note 2 . Fair Value Measurements for the fair value of our derivative instruments as reported in our condensed consolidated balance sheets as of April 30, 2017 . During the three and nine months ended April 30, 2017 , both unrealized losses recognized in AOCI related to the effective portion of our cash flow hedges and amounts reclassified into earnings were not material. Total unrealized losses in AOCI related to the effective portion of our cash flow hedges as of April 30, 2017 were also not material. |
Acquisitions (Notes)
Acquisitions (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions LightCyber Ltd. On February 27, 2017, we completed our acquisition of all outstanding shares of LightCyber Ltd. (“LightCyber”) , a privately-held cybersecurity company, for total consideration of $103.1 million in cash. The acquisition expands the functionality of our next-generation security platform with the addition of LightCyber ’s behavioral analytics technology. We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on their preliminary estimated fair values, as presented in the following table (in millions): Amount Cash $ 12.4 Goodwill 75.3 Identified intangible assets 19.5 Net liabilities assumed (4.1 ) Total $ 103.1 Additional information, such as that related to income tax and other contingencies, existing as of the acquisition date but unknown to us may become known during the remainder of the measurement period, not to exceed 12 months from the acquisition date, which may result in changes to the amounts and allocations recorded. The following table presents details of the identified intangible assets acquired (in millions, except years): Fair Value Estimated Useful Life Developed technology $ 16.6 8 years Customer relationships 2.9 8 years Total $ 19.5 Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected synergies from integrating the LightCyber technology into our platform. The goodwill is not deductible for income tax purposes. LightCyber ’s operating results are included in our condensed consolidated statements of operations from the date of acquisition. Pro forma results of operations have not been presented as the impact to our condensed consolidated statements of operations is not material |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table presents details of our goodwill during the nine months ended April 30, 2017 (in millions): Amount Balance as of July 31, 2016 $ 163.5 Goodwill acquired 75.3 Balance as of April 30, 2017 $ 238.8 Purchased Intangible Assets The following table presents details of our purchased intangible assets as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 69.7 $ (21.3 ) $ 48.4 $ 53.1 $ (15.4 ) $ 37.7 Acquired intellectual property 8.9 (3.6 ) 5.3 8.9 (2.9 ) 6.0 Customer relationships 2.9 (0.1 ) 2.8 — — — In-process research and development held for defensive purposes 1.9 (1.9 ) — 1.9 (1.6 ) 0.3 Other 0.5 (0.5 ) — 0.5 (0.5 ) — Total purchased intangible assets $ 83.9 $ (27.4 ) $ 56.5 $ 64.4 $ (20.4 ) $ 44.0 We recognized amortization expense of $2.5 million and $7.1 million for the three and nine months ended April 30, 2017 , respectively, and $2.3 million and $7.1 million for the three and nine months ended April 30, 2016 , respectively. The following table summarizes our estimated future amortization expense of intangible assets as of April 30, 2017 (in millions): Amount Fiscal years ending July 31: Remaining 2017 $ 2.7 2018 10.7 2019 10.6 2020 10.6 2021 8.9 2022 and thereafter 13.0 Total future amortization expense $ 56.5 |
Convertible Senior Notes (Notes
Convertible Senior Notes (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes Convertible Senior Notes On June 30, 2014 , we issued $575.0 million aggregate principal amount of 0.0% Convertible Senior Notes due 2019 (the “Notes”) . The Notes mature on July 1, 2019 , unless converted or repurchased in accordance with their terms prior to such date. The Notes do not contain any financial covenants and we cannot redeem the Notes prior to maturity. The Notes are convertible for up to 5.2 million shares of our common stock at an initial conversion price of approximately $110.28 per share of common stock, subject to adjustment. Holders of the Notes may surrender their Notes for conversion at their option at any time prior to the close of business on the business day immediately preceding January 1, 2019 , only under the following circumstances: • if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day (the “sale price condition”) ; • during the five business day period after any five consecutive trading day period, in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the Notes on each such trading day; or • upon the occurrence of specified corporate events. On or after January 1, 2019, holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, holders will receive cash equal to the aggregate principal amount of the Notes to be converted, and, at our election, cash and/or shares of our common stock for any amounts in excess of the aggregate principal amount of the Notes being converted. The sale price condition was not met during the fiscal quarter ended April 30, 2017 . Since the Notes were not convertible, the net carrying amount of the Notes was classified as a long-term liability and the equity component was included in additional paid-in capital in our condensed consolidated balance sheets as of April 30, 2017 . The following table sets forth the components of the Notes as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Liability: Principal $ 575.0 $ 575.0 Less: debt discount and debt issuance costs, net of amortization 56.6 74.8 Net carrying amount $ 518.4 $ 500.2 Equity $ 109.8 $ 109.8 The total estimated fair value of the Notes was $671.3 million and $761.9 million at April 30, 2017 and July 31, 2016 , respectively. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. We consider the fair value of the Notes at April 30, 2017 and July 31, 2016 to be a Level 2 measurement. The fair value of the Notes is primarily affected by the trading price of our common stock and market interest rates. As of April 30, 2017 , the if-converted value of the Notes exceeded its principal amount by $7.7 million . The following table sets forth interest expense recognized related to the Notes (dollars in millions): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 2016 Amortization of debt discount $ 5.5 $ 5.3 $ 16.4 $ 15.7 Amortization of debt issuance costs 0.7 0.6 1.9 1.7 Total interest expense recognized $ 6.2 $ 5.9 $ 18.3 $ 17.4 Effective interest rate of the liability component 4.8 % 4.8 % 4.8 % 4.8 % Note Hedges To minimize the impact of potential economic dilution upon conversion of the Notes , we entered into convertible note hedge transactions (the “Note Hedges”) with respect to our common stock concurrent with the issuance of the Notes . The Note Hedges cover up to 5.2 million shares of our common stock and are exercisable upon conversion of the Notes . The Note Hedges will expire upon maturity of the Notes . The Note Hedges are separate transactions and are not part of the terms of the Notes . Holders of the Notes will not have any rights with respect to the Note Hedges . The shares receivable related to the Note Hedges are excluded from the calculation of diluted earnings per share as they are antidilutive. Warrants Separately, but concurrently with our issuance of the Notes , we entered into transactions whereby we sold warrants (the “Warrants”) to acquire up to 5.2 million shares of our common stock at a strike price of approximately $137.85 per share, subject to adjustments. The shares issuable under the Warrants will be included in the calculation of diluted earnings per share when the average market value per share of our common stock for the reporting period exceeds the strike price of the Warrants . The Warrants are separate transactions and are not part of the Notes or Note Hedges , and are not remeasured through earnings each reporting period. Holders of the Notes and Note Hedges will not have any rights with respect to the Warrants . For more information on the Notes , the Note Hedges , and the Warrants , refer to Note 7. Convertible Senior Notes included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 . |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease our facilities under various non-cancelable operating leases, which expire through the year ending July 31, 2028 . The following table presents details of the aggregate future non-cancelable minimum rental payments under our operating leases as of April 30, 2017 (in millions): Amount Fiscal years ending July 31: Remaining 2017 $ 7.2 2018 29.7 2019 48.8 2020 52.2 2021 56.5 2022 and thereafter 318.5 Committed gross lease payments 512.9 Less: proceeds from sublease rental 2.9 Net operating lease obligation $ 510.0 Manufacturing Purchase Commitments Our independent contract manufacturer procures components and assembles our products based on our forecasts. These forecasts are based on estimates of demand for our products primarily for the next 12 months, which are in turn based on historical trends and an analysis from our sales and product marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate supply, we may issue non-cancelable orders for components and products to our independent contract manufacturer, original design manufacturers, or component suppliers. As of April 30, 2017 , our purchase commitments under such orders were $104.3 million , excluding obligations under contracts that we can cancel without a significant penalty. Litigation We are subject to legal proceedings, claims, and litigation arising in the ordinary course of business, including intellectual property litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. We accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss. To the extent there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred and the amount of such additional loss would be material, we will either disclose the estimated additional loss or state that such an estimate cannot be made. As of April 30, 2017 , we have not recorded any significant accruals for loss contingencies associated with such legal proceedings, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Share Repurchase On August 26, 2016, our board of directors authorized a $500.0 million share repurchase which is funded from available working capital. On February 24, 2017, our board of directors authorized a $500.0 million increase to our repurchase program, bringing the total authorization to $1.0 billion . Repurchases may be made at management’s discretion from time to time on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The repurchase authorization will expire on December 31, 2018 , and may be suspended or discontinued at any time. During the three and nine months ended April 30, 2017, we repurchased and retired 1.1 million and 2.4 million shares, respectively, of our common stock under the authorization for an aggregate purchase price of $125.0 million and $295.1 million , respectively. The total price of the shares repurchased and related transaction costs are reflected as a reduction to common stock and additional paid-in capital on our condensed consolidated balance sheets. As of April 30, 2017, $704.9 million remained available for future share repurchases under the repurchase authorization. |
Equity Award Plans (Notes)
Equity Award Plans (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Award Plans | Equity Award Plans Stock Option Activities The following table summarizes the stock option activity under our stock plans during the reporting period (in millions, except per share amounts): Options Outstanding Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—July 31, 2016 2.1 $ 13.42 5.2 $ 244.9 Options granted — — Options forfeited — — Options exercised (0.5 ) 14.23 Balance—April 30, 2017 1.6 $ 13.20 4.5 $ 156.7 Options exercisable—April 30, 2017 1.6 $ 13.20 4.5 $ 156.7 Restricted Stock Unit (“RSU”) , Restricted Stock Award (“RSA”) , and Performance-Based Stock Award (“PSA”) Activities In October 2016, we granted PSA s to certain employees, which will vest over a period of four years from the date of grant. The actual number of PSA s earned and eligible to vest will be determined based on level of achievement against a pre-established billings target for the fiscal year ending July 31, 2017, with a maximum of 0.2 million shares issuable at the end of the performance period. Share-based compensation expense for our PSA s is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award when it is probable that the performance condition will be achieved. In February 2017, we began to net-share settle equity awards held by certain employees by withholding shares upon vesting to satisfy tax withholding obligations. The shares withheld to satisfy employee tax withholding obligations are returned to our 2012 Equity Incentive Plan (our “2012 Plan”) and will be available for future issuance under our 2012 Plan . Payments for employees’ tax obligations to the tax authorities are reflected as financing activities in our condensed consolidated statements of cash flows. The following table summarizes the RSU , RSA , and PSA activity under our stock plans during the reporting period (in millions, except per share amounts): RSAs and PSAs Outstanding RSUs Outstanding Number of Shares Weighted-Average Grant-Date Fair Value Per Share Number of Shares Weighted-Average Grant-Date Fair Value Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—July 31, 2016 1.1 $ 170.97 6.5 $ 130.14 1.1 $ 852.7 Granted (1) 0.3 148.54 2.8 143.28 Vested (0.3 ) 170.97 (2.6 ) 118.53 Forfeited — — (0.4 ) 137.88 Balance—April 30, 2017 1.1 $ 164.24 6.3 $ 140.29 1.3 $ 687.1 ______________ (1) The number of PSA s granted represents the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms. Share-Based Compensation The following table summarizes share-based compensation included in costs and expenses (in millions): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 (1) 2016 Cost of product revenue $ 1.8 $ 1.6 $ 5.5 $ 4.5 Cost of subscription and support revenue 14.0 11.5 41.3 29.0 Research and development 37.1 36.0 116.4 95.9 Sales and marketing 46.2 43.8 139.7 110.4 General and administrative 18.3 15.6 55.1 43.5 Total share-based compensation $ 117.4 $ 108.5 $ 358.0 $ 283.3 ______________ (1) Amounts reflect an adjustment for the three months ended October 31, 2016, due to our early adoption of new share-based payment accounting guidance. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies for more information. As of April 30, 2017 , total compensation cost related to unvested share-based awards not yet recognized was $913.0 million . This cost is expected to be amortized on a straight-line basis over a weighted-average period of approximately 2.5 years . |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes for the three and nine months ended April 30, 2017 reflects an effective tax rate of (14.5)% and (9.1)% , respectively. Our effective tax rates for these periods were negative as we recorded a provision for income taxes on year to date losses. The key components of our income tax provision primarily consist of foreign income taxes, withholding taxes, and amortization of our deferred tax charges. Our effective tax rate differs from the U.S. statutory tax rate primarily due to changes in non-deductible share-based compensation, foreign income at other than U.S. tax rates, and changes in our valuation allowance. As compared to the same periods last year, our effective tax rate changed primarily due to changes in our foreign income taxed at other than U.S. rates and our valuation allowance. Our provision for income taxes for the three and nine months ended April 30, 2016 reflects an effective tax rate of (11.9)% and (10.3)% , respectively. Our effective tax rates for these periods were negative as we recorded a provision for income taxes on year to date losses. The key components of our income tax provision primarily consisted of foreign income taxes, withholding taxes, U.S. federal and state income taxes, and amortization of our deferred tax charges. Key components of our effective tax rate consisted of foreign tax losses which derive no benefit, non-deductible share-based compensation, and changes in our valuation allowance. As of April 30, 2017 , we had $289.1 million of unrecognized tax benefits, $29.2 million of which would affect income tax expense if recognized, after consideration of our valuation allowance in the United States and other assets. As of July 31, 2016, we had $127.7 million of unrecognized tax benefits, $21.9 million of which would affect income tax expense if recognized, after consideration of our valuation allowance in the United States and other assets. The increase in unrecognized tax benefits since July 31, 2016 relates to positions taken relating to transfer pricing in the current year. As of April 30, 2017 , our federal, state, and foreign returns for the tax years 2008 through the current period remain open to examination. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in earlier years, which have been carried forward and may be audited in subsequent years when utilized. We do not expect our unrecognized tax benefits to change significantly over the next 12 months. We recognize both interest and penalties associated with uncertain tax positions as a component of income tax expense. The ultimate amount and timing of any future cash settlements cannot be predicted with reasonable certainty. |
Net Income (Loss) Per Share (No
Net Income (Loss) Per Share (Notes) | 9 Months Ended |
Apr. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by basic weighted-average shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by diluted weighted-average shares outstanding, including potentially dilutive securities. The following table presents the computation of basic and diluted net loss per share of common stock (in millions, except per share data): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 2016 Net loss $ (60.9 ) $ (64.1 ) $ (178.4 ) $ (161.3 ) Weighted-average shares used to compute net loss per share, basic and diluted 91.0 87.8 90.5 86.5 Net loss per share, basic and diluted $ (0.67 ) $ (0.73 ) $ (1.97 ) $ (1.86 ) The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been antidilutive (in millions): Three and Nine Months Ended April 30, 2017 2016 RSUs 6.3 7.0 Convertible senior notes 5.2 5.2 Warrants related to the issuance of convertible senior notes 5.2 5.2 Options to purchase common stock 1.6 2.3 RSAs and PSAs 1.1 1.1 Total 19.4 20.8 |
Description of Business and S19
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Apr. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 , filed with the Securities and Exchange Commission on September 8, 2016. Our condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Our condensed consolidated financial statements are unaudited, but include all adjustments of a normal recurring nature necessary for a fair presentation of our quarterly results. We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. Certain prior period amounts have been adjusted as a result of our voluntary change in accounting policy for sales commissions, our early adoption of new accounting guidance related to share-based payments, and our adoption of new accounting guidance related to debt issuance costs. Refer to “Summary of Significant Accounting Policies” and “Recent Accounting Pronouncements” below for more information. Our condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 . |
Change in Accounting Policy for Sales Commissions | Change in Accounting Policy for Sales Commissions Effective August 1, 2016, we voluntarily changed our accounting policy for sales commissions that are incremental and directly related to non-cancelable customer sales contracts from recording an expense when incurred to deferral and amortization of the sales commissions over the term of the related contract in proportion to the recognized revenue. We believe this change in accounting policy is preferable as the direct and incremental commission costs are closely related to the associated revenue, and therefore should be deferred and recognized as an expense over the same period that the related revenue is recognized. Short-term deferred commissions are included in prepaid expenses and other current assets, while long-term deferred commissions are included in other assets in our condensed consolidated balance sheets. The amortization of deferred commissions is included in sales and marketing expense in our condensed consolidated statements of operations. The adoption of this accounting policy change has been applied retrospectively to all prior periods presented in this Quarterly Report on Form 10-Q, in which the cumulative effect of the change of $71.8 million has been reflected in accumulated deficit as of August 1, 2015, the beginning of the earliest period presented. The following tables present the changes to financial statement line items as a result of the accounting policy change for the periods presented in our condensed consolidated financial statements (in millions, except per share data): April 30, 2017 July 31, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Balance Sheets Prepaid expenses and other current assets $ 99.4 $ 59.7 $ 159.1 $ 84.8 $ 54.9 $ 139.7 Other assets 91.7 56.5 148.2 64.6 50.1 114.7 Other long-term liabilities 136.7 0.4 137.1 79.4 — 79.4 Accumulated deficit $ (914.3 ) $ 115.8 $ (798.5 ) $ (726.6 ) $ 105.0 $ (621.6 ) Three Months Ended April 30, 2017 Three Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 234.6 $ (7.7 ) $ 226.9 $ 202.0 $ (6.1 ) $ 195.9 Operating loss (56.8 ) 7.7 (49.1 ) (58.6 ) 6.1 (52.5 ) Provision for income taxes 7.3 0.4 7.7 6.8 — 6.8 Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Net loss per share, basic and diluted $ (0.75 ) $ 0.08 $ (0.67 ) $ (0.80 ) $ 0.07 $ (0.73 ) Weighted-average shares used to compute net loss per share, basic and diluted 91.0 — 91.0 87.8 — 87.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Comprehensive loss $ (67.3 ) $ 7.3 $ (60.0 ) $ (68.9 ) $ 6.1 $ (62.8 ) Nine Months Ended April 30, 2017 (1) Nine Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 684.8 $ (11.1 ) $ 673.7 $ 547.9 $ (10.1 ) $ 537.8 Operating loss (163.6 ) 11.1 (152.5 ) (144.7 ) 10.1 (134.6 ) Provision for income taxes 14.6 0.3 14.9 15.0 — 15.0 Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Net loss per share, basic and diluted $ (2.09 ) $ 0.12 $ (1.97 ) $ (1.98 ) $ 0.12 $ (1.86 ) Weighted-average shares used to compute net loss per share, basic and diluted 90.5 — 90.5 86.5 — 86.5 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Comprehensive loss $ (194.4 ) $ 10.8 $ (183.6 ) $ (170.7 ) $ 10.1 $ (160.6 ) ______________ (1) Amounts reflect an adjustment for the three months ended October 31, 2016, due to our early adoption of new share-based payment accounting guidance in our second quarter of fiscal 2017. Refer to “Recent Accounting Pronouncements” below for more information. This change in accounting policy does not affect our balance of cash and cash equivalents and, as a result, did not change net cash flows from operating, investing, or financing activities, or materially impact any individual line items presented in our condensed consolidated statement of cash flows for the nine months ended April 30, 2016 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance simplifying several aspects of the accounting for employee share-based payment transactions. The new standard requires us to recognize excess tax benefits or deficiencies as income tax expense or benefit in the period in which they occur, rather than additional paid-in capital, and also requires us to recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. In addition, excess tax benefits should be classified as an operating activity, along with other income tax cash flows, instead of a financing activity in our condensed consolidated statements of cash flows. The standard also allows us to make an accounting policy election to account for forfeitures of share-based payment awards when they occur, rather than estimate expected forfeitures. We elected to early adopt the standard in our second quarter of fiscal 2017, which required us to reflect any adjustments related to the adoption as of the beginning of the fiscal year. The impact of the adoption on our condensed consolidated financial statements was as follows: • Income tax accounting - We adopted the guidance related to the timing of when excess tax benefits are recognized on a modified retrospective basis. As a result, we recorded the cumulative effect of the change as a $3.5 million reduction to accumulated deficit as of August 1, 2016, to reflect the recognition of excess tax benefits in prior years, with a corresponding adjustment to deferred tax assets and long-term tax liabilities. We adopted the guidance related to the recognition of excess tax benefits and deficiencies as income tax expense or benefit on a prospective basis. • Cash flow presentation of excess tax benefits - We elected to adopt the guidance related to the presentation of excess tax benefits in our condensed consolidated statements of cash flows on a retrospective basis, which increased net cash provided by operating activities by $0.7 million for the nine months ended April 30, 2016, with a corresponding decrease to net cash provided by financing activities. • Forfeitures - We elected to account for forfeitures when they occur and adopted this change on a modified retrospective basis. As a result, we recorded the cumulative effect of the change as a $2.0 million increase to accumulated deficit as of August 1, 2016. The adoption of the standard also impacted our previously reported results for the three months ended October 31, 2016, as presented in the following tables (in millions, except per share data): October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Balance Sheets Other assets $ 102.0 $ 1.7 $ 103.7 Other long-term liabilities 85.8 (5.6 ) 80.2 Common stock and additional paid-in capital 1,542.2 0.9 1,543.1 Accumulated deficit $ (683.4 ) $ 6.4 $ (677.0 ) Three Months Ended October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Statements of Operations Total cost of revenue (1) $ 101.3 $ (0.1 ) $ 101.2 Total operating expenses (1) 346.7 (0.8 ) 345.9 Provision for income taxes 8.4 (4.0 ) 4.4 Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Net loss per share, basic and diluted $ (0.69 ) $ 0.06 $ (0.63 ) Weighted-average shares used to compute net loss per share, basic and diluted 89.8 — 89.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Comprehensive loss $ (64.7 ) $ 4.9 $ (59.8 ) Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities $ 203.3 $ 0.2 $ 203.5 Net cash used in financing activities $ (27.1 ) $ (0.2 ) $ (27.3 ) ______________ (1) Adjustments consist of share-based compensation, which was impacted by our policy election to account for forfeitures when they occur. The impact of adoption on each cost and expense line item within these subtotals was not significant. In April 2015, the FASB issued new authoritative guidance on fees paid in a cloud computing arrangement. The standard requires customers in a cloud computing arrangement to evaluate whether the arrangement includes a software license. If the arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted the standard in our first quarter of fiscal 2017 on a prospective basis. Our adoption of this standard did not have a material impact on our condensed consolidated financial statements. In April 2015, the FASB issued updated authoritative guidance to simplify the presentation of debt issuance costs. The amended standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts, instead of being presented as an asset. We adopted the standard in our first quarter of fiscal 2017 on a retrospective basis, and as a result, we reduced other assets and convertible senior notes, net by $8.0 million on our condensed consolidated balance sheets as of July 31, 2016. Recently Issued Accounting Pronouncements In January 2017, the FASB issued authoritative guidance simplifying the subsequent measurement of goodwill. The standard eliminates Step 2 of the current goodwill impairment test, which requires companies to determine the implied fair value of goodwill when measuring the amount of impairment loss. Under the new standard, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, with the loss limited to the total amount of goodwill allocated to that reporting unit. The standard is effective for us for our first quarter of fiscal 2021 and will be applied on a prospective basis. Early adoption is permitted. We do not expect the adoption of the standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued authoritative guidance clarifying the definition of a business to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In October 2016, the FASB issued authoritative guidance requiring the recognition of income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a modified retrospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued new authoritative guidance addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are presented and classified in the statement of cash flows. The standard is effective for us for our first quarter of fiscal 2019 and will be applied on a retrospective basis. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued new authoritative guidance on the accounting for credit losses on most financial assets and certain financial instruments. The standard replaces the existing incurred loss model with an expected credit loss model for financial assets measured at amortized cost, including trade receivables, and requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The standard is effective for us for our first quarter of fiscal 2021 and will be applied on a modified retrospective basis. Early adoption is permitted beginning our first quarter of fiscal 2020. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In February 2016, the FASB issued new authoritative guidance on lease accounting. Among its provisions, the standard requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for operating leases and also requires additional qualitative and quantitative disclosures about lease arrangements. The standard is effective for us for our first quarter of fiscal 2020 and will be applied on a modified retrospective basis, with the option to elect certain practical expedients. Early adoption is permitted. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements. In May 2014, the FASB issued new authoritative guidance on revenue from contracts with customers. The new standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires significantly expanded disclosures about revenue recognition. The FASB subsequently delayed the effective date of the standard by one year and as a result, the standard is now effective for us for our first quarter of fiscal 2019 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the guidance; or (ii) retrospective with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures as defined per the guidance. Early adoption as of the original effective date is permitted. We do not plan to early adopt, and accordingly, we will adopt the new standard in our first quarter of fiscal 2019. We are continuing to evaluate the impact of the new standard on our accounting policies, processes, and system requirements, and have assigned cross-functional internal resources and engaged third-party service providers to assist in our evaluation and system implementation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. We are also continuing to evaluate adoption methods and the potential impact that the implementation of this standard will have on our condensed consolidated financial statements, but have not yet determined whether the effect will be material. However, we believe this new standard will impact our accounting for revenue arrangements in the following areas: • removal of the current limitation on contingent revenue may result in revenue being recognized earlier for certain contracts; • term license revenue associated with our virtual firewalls will be recognized upfront; • allocation of revenue related to software due to the removal of the residual method of revenue recognition; and • amortization period for deferred commissions. We will continue to assess the new standard along with industry trends and additional interpretive guidance, and may adjust our implementation plan accordingly. We expect to finalize our adoption method and assessment of the impact that the implementation of this standard will have on our condensed consolidated financial statements by the end of fiscal 2017. |
Fair Value Measurements | Fair Value Measurements We categorize assets and liabilities recorded at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows: • Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. • Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. |
Derivative Instruments | Derivative Instruments As a global business, we are exposed to currency exchange rate risk. Substantially all of our revenue is transacted in U.S. dollars, however, a portion of our operating expenditures are incurred outside of the United States and are denominated in foreign currencies, making them subject to fluctuations in foreign currency exchange rates. We enter into foreign currency derivative contracts with maturities of 12 months or less which we designate as cash flow hedges to manage the foreign currency exchange rate risk associated with these expenditures. These derivative contracts expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We mitigate this credit risk by transacting with major financial institutions with high credit ratings and also enter into master netting arrangements, which permit net settlement of transactions with the same counterparty. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments. We do not enter into derivative contracts for trading or speculative purposes. Our derivative financial instruments are recorded at fair value, on a gross basis, as either assets or liabilities in our condensed consolidated balance sheets. Gains or losses related to the effective portion of our cash flow hedges are recorded as a component of accumulated other comprehensive income (“AOCI”) in our condensed consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction in our condensed consolidated statements of operations when the underlying hedged transaction is recognized in earnings. Any gains or losses related to the ineffective portion of our cash flow hedges are recorded immediately in other income (expense), net in our condensed consolidated statements of operations. If it becomes probable that the hedged transaction will not occur, the cumulative unrealized gain or loss is reclassified immediately from AOCI into other income (expense), net. Gains or losses related to non-designated derivative instruments are recognized in other income (expense), net each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Derivatives designated as cash flow hedges are classified in our condensed consolidated statements of cash flows in the same manner as the underlying hedged transaction, primarily within cash flows from operating activities. |
Description of Business and S20
Description of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of change in accounting policy for sales commissions | The following tables present the changes to financial statement line items as a result of the accounting policy change for the periods presented in our condensed consolidated financial statements (in millions, except per share data): April 30, 2017 July 31, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Balance Sheets Prepaid expenses and other current assets $ 99.4 $ 59.7 $ 159.1 $ 84.8 $ 54.9 $ 139.7 Other assets 91.7 56.5 148.2 64.6 50.1 114.7 Other long-term liabilities 136.7 0.4 137.1 79.4 — 79.4 Accumulated deficit $ (914.3 ) $ 115.8 $ (798.5 ) $ (726.6 ) $ 105.0 $ (621.6 ) Three Months Ended April 30, 2017 Three Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 234.6 $ (7.7 ) $ 226.9 $ 202.0 $ (6.1 ) $ 195.9 Operating loss (56.8 ) 7.7 (49.1 ) (58.6 ) 6.1 (52.5 ) Provision for income taxes 7.3 0.4 7.7 6.8 — 6.8 Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Net loss per share, basic and diluted $ (0.75 ) $ 0.08 $ (0.67 ) $ (0.80 ) $ 0.07 $ (0.73 ) Weighted-average shares used to compute net loss per share, basic and diluted 91.0 — 91.0 87.8 — 87.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (68.2 ) $ 7.3 $ (60.9 ) $ (70.2 ) $ 6.1 $ (64.1 ) Comprehensive loss $ (67.3 ) $ 7.3 $ (60.0 ) $ (68.9 ) $ 6.1 $ (62.8 ) Nine Months Ended April 30, 2017 (1) Nine Months Ended April 30, 2016 Computed under Prior Method Impact of Commission Adjustment As Reported As Previously Reported Impact of Commission Adjustment As Adjusted Condensed Consolidated Statements of Operations Sales and marketing $ 684.8 $ (11.1 ) $ 673.7 $ 547.9 $ (10.1 ) $ 537.8 Operating loss (163.6 ) 11.1 (152.5 ) (144.7 ) 10.1 (134.6 ) Provision for income taxes 14.6 0.3 14.9 15.0 — 15.0 Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Net loss per share, basic and diluted $ (2.09 ) $ 0.12 $ (1.97 ) $ (1.98 ) $ 0.12 $ (1.86 ) Weighted-average shares used to compute net loss per share, basic and diluted 90.5 — 90.5 86.5 — 86.5 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (189.2 ) $ 10.8 $ (178.4 ) $ (171.4 ) $ 10.1 $ (161.3 ) Comprehensive loss $ (194.4 ) $ 10.8 $ (183.6 ) $ (170.7 ) $ 10.1 $ (160.6 ) ______________ (1) Amounts reflect an adjustment for the three months ended October 31, 2016, due to our early adoption of new share-based payment accounting guidance in our second quarter of fiscal 2017. Refer to “Recent Accounting Pronouncements” below for more information. |
New share-based payment accounting guidance, early adoption | The adoption of the standard also impacted our previously reported results for the three months ended October 31, 2016, as presented in the following tables (in millions, except per share data): October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Balance Sheets Other assets $ 102.0 $ 1.7 $ 103.7 Other long-term liabilities 85.8 (5.6 ) 80.2 Common stock and additional paid-in capital 1,542.2 0.9 1,543.1 Accumulated deficit $ (683.4 ) $ 6.4 $ (677.0 ) Three Months Ended October 31, 2016 As Previously Reported Impact of Adoption As Adjusted Condensed Consolidated Statements of Operations Total cost of revenue (1) $ 101.3 $ (0.1 ) $ 101.2 Total operating expenses (1) 346.7 (0.8 ) 345.9 Provision for income taxes 8.4 (4.0 ) 4.4 Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Net loss per share, basic and diluted $ (0.69 ) $ 0.06 $ (0.63 ) Weighted-average shares used to compute net loss per share, basic and diluted 89.8 — 89.8 Condensed Consolidated Statements of Comprehensive Loss Net loss $ (61.8 ) $ 4.9 $ (56.9 ) Comprehensive loss $ (64.7 ) $ 4.9 $ (59.8 ) Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities $ 203.3 $ 0.2 $ 203.5 Net cash used in financing activities $ (27.1 ) $ (0.2 ) $ (27.3 ) ______________ (1) Adjustments consist of share-based compensation, which was impacted by our policy election to account for forfeitures when they occur. The impact of adoption on each cost and expense line item within these subtotals was not significant. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets and liabilities | The following table presents the fair value of our financial assets and liabilities using the above input categories as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents: U.S. government and agency securities $ — $ 19.0 $ — $ 19.0 $ — $ — $ — $ — Total cash equivalents — 19.0 — 19.0 — — — — Short-term investments: Commercial paper — 15.0 — 15.0 — 3.0 — 3.0 Corporate debt securities — 160.1 — 160.1 — 121.4 — 121.4 U.S. government and agency securities — 504.9 — 504.9 — 426.8 — 426.8 Total short-term investments — 680.0 — 680.0 — 551.2 — 551.2 Long-term investments: Certificates of deposit — 5.4 — 5.4 — 5.4 — 5.4 Corporate debt securities — 176.1 — 176.1 — 166.1 — 166.1 U.S. government and agency securities — 537.6 — 537.6 — 481.3 — 481.3 Total long-term investments — 719.1 — 719.1 — 652.8 — 652.8 Total assets measured at fair value $ — $ 1,418.1 $ — $ 1,418.1 $ — $ 1,204.0 $ — $ 1,204.0 Accrued and other liabilities: Foreign currency forward contracts $ — $ 1.2 $ — $ 1.2 $ — $ — $ — $ — Total accrued and other liabilities — 1.2 — 1.2 — — — — Total liabilities measured at fair value $ — $ 1.2 $ — $ 1.2 $ — $ — $ — $ — |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available-for-sale investments | The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale investments as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Certificates of deposit $ 5.4 $ — $ — $ 5.4 Commercial paper 15.0 — — 15.0 Corporate debt securities 336.6 0.2 (0.6 ) 336.2 U.S. government and agency securities 1,064.2 0.1 (2.8 ) 1,061.5 Total $ 1,421.2 $ 0.3 $ (3.4 ) $ 1,418.1 July 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Certificates of deposit $ 5.4 $ — $ — $ 5.4 Commercial paper 3.0 — — 3.0 Corporate debt securities 286.7 0.8 — 287.5 U.S. government and agency securities 907.3 0.9 (0.1 ) 908.1 Total $ 1,202.4 $ 1.7 $ (0.1 ) $ 1,204.0 |
Schedule of contractual maturities of available-for-sale investments | The following table summarizes the amortized cost and fair value of our available-for-sale investments as of April 30, 2017 , by contractual years-to-maturity (in millions): Amortized Cost Fair Value Due within one year $ 699.7 $ 699.0 Due between one and three years 721.5 719.1 Total $ 1,421.2 $ 1,418.1 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on their preliminary estimated fair values, as presented in the following table (in millions): Amount Cash $ 12.4 Goodwill 75.3 Identified intangible assets 19.5 Net liabilities assumed (4.1 ) Total $ 103.1 |
Finite-lived intangible assets acquired as part of business combination | The following table presents details of the identified intangible assets acquired (in millions, except years): Fair Value Estimated Useful Life Developed technology $ 16.6 8 years Customer relationships 2.9 8 years Total $ 19.5 |
Goodwill and Intangible Asset24
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table presents details of our goodwill during the nine months ended April 30, 2017 (in millions): Amount Balance as of July 31, 2016 $ 163.5 Goodwill acquired 75.3 Balance as of April 30, 2017 $ 238.8 |
Schedule of intangible assets by major class | The following table presents details of our purchased intangible assets as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 69.7 $ (21.3 ) $ 48.4 $ 53.1 $ (15.4 ) $ 37.7 Acquired intellectual property 8.9 (3.6 ) 5.3 8.9 (2.9 ) 6.0 Customer relationships 2.9 (0.1 ) 2.8 — — — In-process research and development held for defensive purposes 1.9 (1.9 ) — 1.9 (1.6 ) 0.3 Other 0.5 (0.5 ) — 0.5 (0.5 ) — Total purchased intangible assets $ 83.9 $ (27.4 ) $ 56.5 $ 64.4 $ (20.4 ) $ 44.0 |
Future amortization expense of intangible assets | The following table summarizes our estimated future amortization expense of intangible assets as of April 30, 2017 (in millions): Amount Fiscal years ending July 31: Remaining 2017 $ 2.7 2018 10.7 2019 10.6 2020 10.6 2021 8.9 2022 and thereafter 13.0 Total future amortization expense $ 56.5 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of Convertible Senior Notes | The following table sets forth the components of the Notes as of April 30, 2017 and July 31, 2016 (in millions): April 30, 2017 July 31, 2016 Liability: Principal $ 575.0 $ 575.0 Less: debt discount and debt issuance costs, net of amortization 56.6 74.8 Net carrying amount $ 518.4 $ 500.2 Equity $ 109.8 $ 109.8 |
Interest expense recognized related to the Notes | The following table sets forth interest expense recognized related to the Notes (dollars in millions): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 2016 Amortization of debt discount $ 5.5 $ 5.3 $ 16.4 $ 15.7 Amortization of debt issuance costs 0.7 0.6 1.9 1.7 Total interest expense recognized $ 6.2 $ 5.9 $ 18.3 $ 17.4 Effective interest rate of the liability component 4.8 % 4.8 % 4.8 % 4.8 % |
Commitments and Contingencies26
Commitments and Contingencies (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future non-cancelable minimum rental payments for operating leases | The following table presents details of the aggregate future non-cancelable minimum rental payments under our operating leases as of April 30, 2017 (in millions): Amount Fiscal years ending July 31: Remaining 2017 $ 7.2 2018 29.7 2019 48.8 2020 52.2 2021 56.5 2022 and thereafter 318.5 Committed gross lease payments 512.9 Less: proceeds from sublease rental 2.9 Net operating lease obligation $ 510.0 |
Equity Award Plans (Tables)
Equity Award Plans (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activities | The following table summarizes the stock option activity under our stock plans during the reporting period (in millions, except per share amounts): Options Outstanding Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—July 31, 2016 2.1 $ 13.42 5.2 $ 244.9 Options granted — — Options forfeited — — Options exercised (0.5 ) 14.23 Balance—April 30, 2017 1.6 $ 13.20 4.5 $ 156.7 Options exercisable—April 30, 2017 1.6 $ 13.20 4.5 $ 156.7 |
Schedule of restricted stock unit (“RSU”), restricted stock award (“RSA”), and performance-based stock award (“PSA”) activities | The following table summarizes the RSU , RSA , and PSA activity under our stock plans during the reporting period (in millions, except per share amounts): RSAs and PSAs Outstanding RSUs Outstanding Number of Shares Weighted-Average Grant-Date Fair Value Per Share Number of Shares Weighted-Average Grant-Date Fair Value Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—July 31, 2016 1.1 $ 170.97 6.5 $ 130.14 1.1 $ 852.7 Granted (1) 0.3 148.54 2.8 143.28 Vested (0.3 ) 170.97 (2.6 ) 118.53 Forfeited — — (0.4 ) 137.88 Balance—April 30, 2017 1.1 $ 164.24 6.3 $ 140.29 1.3 $ 687.1 ______________ (1) The number of PSA s granted represents the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms. |
Schedule of allocation of share based compensation expense | The following table summarizes share-based compensation included in costs and expenses (in millions): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 (1) 2016 Cost of product revenue $ 1.8 $ 1.6 $ 5.5 $ 4.5 Cost of subscription and support revenue 14.0 11.5 41.3 29.0 Research and development 37.1 36.0 116.4 95.9 Sales and marketing 46.2 43.8 139.7 110.4 General and administrative 18.3 15.6 55.1 43.5 Total share-based compensation $ 117.4 $ 108.5 $ 358.0 $ 283.3 ______________ (1) Amounts reflect an adjustment for the three months ended October 31, 2016, due to our early adoption of new share-based payment accounting guidance. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies for more information. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Apr. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net income (loss) per share of common stock | The following table presents the computation of basic and diluted net loss per share of common stock (in millions, except per share data): Three Months Ended Nine Months Ended April 30, April 30, 2017 2016 2017 2016 Net loss $ (60.9 ) $ (64.1 ) $ (178.4 ) $ (161.3 ) Weighted-average shares used to compute net loss per share, basic and diluted 91.0 87.8 90.5 86.5 Net loss per share, basic and diluted $ (0.67 ) $ (0.73 ) $ (1.97 ) $ (1.86 ) |
Schedule of antidilutive securities excluded from the computation of net income (loss) per share | The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been antidilutive (in millions): Three and Nine Months Ended April 30, 2017 2016 RSUs 6.3 7.0 Convertible senior notes 5.2 5.2 Warrants related to the issuance of convertible senior notes 5.2 5.2 Options to purchase common stock 1.6 2.3 RSAs and PSAs 1.1 1.1 Total 19.4 20.8 |
Description of Business and S29
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2017 | Oct. 31, 2016 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | Aug. 01, 2016 | Jul. 31, 2016 | Aug. 01, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Prepaid expenses and other current assets | $ 159.1 | $ 159.1 | $ 139.7 | |||||
Other assets | 148.2 | 148.2 | 106.7 | |||||
Other long-term liabilities | 137.1 | 137.1 | 79.4 | |||||
Common stock and additional paid-in capital | 1,615.8 | 1,615.8 | 1,515.5 | |||||
Accumulated deficit | (798.5) | (798.5) | (621.6) | |||||
Total cost of revenue | 123.7 | $ 94.9 | 338.1 | $ 268.3 | ||||
Sales and marketing | 226.9 | 195.9 | 673.7 | 537.8 | ||||
Total operating expenses | 357.2 | 303.4 | 1,066.9 | 844 | ||||
Operating loss | (49.1) | (52.5) | (152.5) | (134.6) | ||||
Provision for income taxes | 7.7 | 6.8 | 14.9 | 15 | ||||
Net loss | $ (60.9) | $ (64.1) | $ (178.4) | $ (161.3) | ||||
Net loss per share, basic and diluted | $ (0.67) | $ (0.73) | $ (1.97) | $ (1.86) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 91 | 87.8 | 90.5 | 86.5 | ||||
Comprehensive loss | $ (60) | $ (62.8) | $ (183.6) | $ (160.6) | ||||
Convertible senior notes, net | 518.4 | 518.4 | 500.2 | |||||
Net cash provided by operating activities | 629 | 471.3 | ||||||
Net cash provided by (used in) financing activities | (260.3) | 42.2 | ||||||
New accounting pronouncement - accounting for employee share-based payment transaction | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Other assets | $ 103.7 | |||||||
Other long-term liabilities | 80.2 | |||||||
Common stock and additional paid-in capital | 1,543.1 | |||||||
Accumulated deficit | (677) | |||||||
Total cost of revenue | 101.2 | |||||||
Total operating expenses | 345.9 | |||||||
Provision for income taxes | 4.4 | |||||||
Net loss | $ (56.9) | |||||||
Net loss per share, basic and diluted | $ (0.63) | |||||||
Weighted-average shares used to compute net loss per share, basic and diluted | 89.8 | |||||||
Comprehensive loss | $ (59.8) | |||||||
Net cash provided by operating activities | 203.5 | |||||||
Net cash provided by (used in) financing activities | (27.3) | |||||||
New accounting pronouncement - accounting for employee share-based payment transaction | As previously reported | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Other assets | 102 | |||||||
Other long-term liabilities | 85.8 | |||||||
Common stock and additional paid-in capital | 1,542.2 | |||||||
Accumulated deficit | (683.4) | |||||||
Total cost of revenue | 101.3 | |||||||
Total operating expenses | 346.7 | |||||||
Provision for income taxes | 8.4 | |||||||
Net loss | $ (61.8) | |||||||
Net loss per share, basic and diluted | $ (0.69) | |||||||
Weighted-average shares used to compute net loss per share, basic and diluted | 89.8 | |||||||
Comprehensive loss | $ (64.7) | |||||||
Net cash provided by operating activities | 203.3 | |||||||
Net cash provided by (used in) financing activities | (27.1) | |||||||
New accounting pronouncement - accounting for employee share-based payment transaction | Impact of change in accounting principle | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Other assets | 1.7 | |||||||
Other long-term liabilities | (5.6) | |||||||
Common stock and additional paid-in capital | 0.9 | |||||||
Accumulated deficit | 6.4 | |||||||
Total cost of revenue | (0.1) | |||||||
Total operating expenses | (0.8) | |||||||
Provision for income taxes | (4) | |||||||
Net loss | $ 4.9 | |||||||
Net loss per share, basic and diluted | $ 0.06 | |||||||
Weighted-average shares used to compute net loss per share, basic and diluted | 0 | |||||||
Comprehensive loss | $ 4.9 | |||||||
Net cash provided by operating activities | 0.2 | 0.7 | ||||||
Net cash provided by (used in) financing activities | $ (0.2) | (0.7) | ||||||
New accounting pronouncement - accounting for employee share-based payment transaction_income tax accounting | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Cumulative effect of new accounting principle in period of adoption | $ (3.5) | |||||||
New accounting pronouncement - accounting for employee share-based payment transaction_forfeitures | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Cumulative effect of new accounting principle in period of adoption | $ 2 | |||||||
New accounting pronouncement - presentation of debt issuance costs | Impact of change in accounting principle | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Other assets | (8) | |||||||
Convertible senior notes, net | (8) | |||||||
Accounting policy for sales commission | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Change in accounting principle, cumulative effect of change on accumulated deficit as of the beginning of the earliest period presented | $ 71.8 | |||||||
Prepaid expenses and other current assets | 159.1 | 159.1 | 139.7 | |||||
Other assets | 148.2 | 148.2 | 114.7 | |||||
Other long-term liabilities | 137.1 | 137.1 | 79.4 | |||||
Accumulated deficit | (798.5) | (798.5) | (621.6) | |||||
Sales and marketing | 226.9 | 195.9 | 673.7 | 537.8 | ||||
Operating loss | (49.1) | (52.5) | (152.5) | (134.6) | ||||
Provision for income taxes | 7.7 | 6.8 | 14.9 | 15 | ||||
Net loss | $ (60.9) | $ (64.1) | $ (178.4) | $ (161.3) | ||||
Net loss per share, basic and diluted | $ (0.67) | $ (0.73) | $ (1.97) | $ (1.86) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 91 | 87.8 | 90.5 | 86.5 | ||||
Comprehensive loss | $ (60) | $ (62.8) | $ (183.6) | $ (160.6) | ||||
Accounting policy for sales commission | As previously reported | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Prepaid expenses and other current assets | 99.4 | 99.4 | 84.8 | |||||
Other assets | 91.7 | 91.7 | 64.6 | |||||
Other long-term liabilities | 136.7 | 136.7 | 79.4 | |||||
Accumulated deficit | (914.3) | (914.3) | (726.6) | |||||
Sales and marketing | 234.6 | 202 | 684.8 | 547.9 | ||||
Operating loss | (56.8) | (58.6) | (163.6) | (144.7) | ||||
Provision for income taxes | 7.3 | 6.8 | 14.6 | 15 | ||||
Net loss | $ (68.2) | $ (70.2) | $ (189.2) | $ (171.4) | ||||
Net loss per share, basic and diluted | $ (0.75) | $ (0.80) | $ (2.09) | $ (1.98) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 91 | 87.8 | 90.5 | 86.5 | ||||
Comprehensive loss | $ (67.3) | $ (68.9) | $ (194.4) | $ (170.7) | ||||
Accounting policy for sales commission | Impact of change in accounting principle | ||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||
Prepaid expenses and other current assets | 59.7 | 59.7 | 54.9 | |||||
Other assets | 56.5 | 56.5 | 50.1 | |||||
Other long-term liabilities | 0.4 | 0.4 | 0 | |||||
Accumulated deficit | 115.8 | 115.8 | $ 105 | |||||
Sales and marketing | (7.7) | (6.1) | (11.1) | (10.1) | ||||
Operating loss | 7.7 | 6.1 | 11.1 | 10.1 | ||||
Provision for income taxes | 0.4 | 0 | 0.3 | 0 | ||||
Net loss | $ 7.3 | $ 6.1 | $ 10.8 | $ 10.1 | ||||
Net loss per share, basic and diluted | $ 0.08 | $ 0.07 | $ 0.12 | $ 0.12 | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 0 | 0 | 0 | 0 | ||||
Comprehensive loss | $ 7.3 | $ 6.1 | $ 10.8 | $ 10.1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | $ 19 | $ 0 |
Short-term investments | 680 | 551.2 |
Long-term investments | 719.1 | 652.8 |
Total assets measured at fair value | 1,418.1 | 1,204 |
Accrued and other liabilities | 1.2 | 0 |
Total liabilities measured at fair value | 1.2 | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Accrued and other liabilities | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 19 | 0 |
Short-term investments | 680 | 551.2 |
Long-term investments | 719.1 | 652.8 |
Total assets measured at fair value | 1,418.1 | 1,204 |
Accrued and other liabilities | 1.2 | 0 |
Total liabilities measured at fair value | 1.2 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Accrued and other liabilities | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 19 | 0 |
Short-term investments | 504.9 | 426.8 |
Long-term investments | 537.6 | 481.3 |
U.S. government and agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
U.S. government and agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 19 | 0 |
Short-term investments | 504.9 | 426.8 |
Long-term investments | 537.6 | 481.3 |
U.S. government and agency securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 15 | 3 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 15 | 3 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 160.1 | 121.4 |
Long-term investments | 176.1 | 166.1 |
Corporate debt securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Corporate debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 160.1 | 121.4 |
Long-term investments | 176.1 | 166.1 |
Corporate debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term investments | 5.4 | 5.4 |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term investments | 0 | 0 |
Certificates of deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term investments | 5.4 | 5.4 |
Certificates of deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term investments | 0 | 0 |
Foreign currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Accrued and other liabilities | 1.2 | 0 |
Foreign currency forward contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Accrued and other liabilities | 0 | 0 |
Foreign currency forward contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Accrued and other liabilities | 1.2 | 0 |
Foreign currency forward contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Accrued and other liabilities | $ 0 | $ 0 |
Investments (Available-for-Sale
Investments (Available-for-Sale Investments) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Schedule of Available-for-sale Securities | ||
Amortized cost | $ 1,421.2 | $ 1,202.4 |
Unrealized gains | 0.3 | 1.7 |
Unrealized losses | (3.4) | (0.1) |
Estimated fair value | 1,418.1 | 1,204 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities | ||
Amortized cost | 5.4 | 5.4 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Estimated fair value | 5.4 | 5.4 |
Commercial paper | ||
Schedule of Available-for-sale Securities | ||
Amortized cost | 15 | 3 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Estimated fair value | 15 | 3 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities | ||
Amortized cost | 336.6 | 286.7 |
Unrealized gains | 0.2 | 0.8 |
Unrealized losses | (0.6) | 0 |
Estimated fair value | 336.2 | 287.5 |
U.S. government and agency securities | ||
Schedule of Available-for-sale Securities | ||
Amortized cost | 1,064.2 | 907.3 |
Unrealized gains | 0.1 | 0.9 |
Unrealized losses | (2.8) | (0.1) |
Estimated fair value | $ 1,061.5 | $ 908.1 |
Investments (Available-for-Sa32
Investments (Available-for-Sale Investments, Contractual Maturities) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Amortized Cost | ||
Due within one year | $ 699.7 | |
Due between one and three years | 721.5 | |
Total | 1,421.2 | |
Fair Value | ||
Due within one year | 699 | |
Due between one and three years | 719.1 | |
Total | $ 1,418.1 | $ 1,204 |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Millions | 9 Months Ended |
Apr. 30, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Maximum contract term of cash flow hedge (in months) | 12 months |
Notional amount of derivatives | $ 37.5 |
Acquisitions (Consideration Tra
Acquisitions (Consideration Transferred) (Details) $ in Millions | Feb. 27, 2017USD ($) |
LightCyber Ltd. | |
Business Acquisition | |
Cash consideration transferred | $ 103.1 |
Acquisitions (Purchase Price Al
Acquisitions (Purchase Price Allocation) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Feb. 27, 2017 | Jul. 31, 2016 |
Business Acquisition | |||
Goodwill | $ 238.8 | $ 163.5 | |
LightCyber Ltd. | |||
Business Acquisition | |||
Cash | $ 12.4 | ||
Goodwill | 75.3 | ||
Identified intangible assets | 19.5 | ||
Net liabilities assumed | (4.1) | ||
Total | $ 103.1 |
Acquisitions (Intangible assets
Acquisitions (Intangible assets acquired as part of business combination) (Details) - LightCyber Ltd. $ in Millions | Feb. 27, 2017USD ($) |
Finite-Lived Intangible Assets | |
Fair value of identified intangible assets acquired | $ 19.5 |
Developed technology | |
Finite-Lived Intangible Assets | |
Fair value of identified intangible assets acquired | $ 16.6 |
Estimated useful life (in years) | 8 years |
Customer relationships | |
Finite-Lived Intangible Assets | |
Fair value of identified intangible assets acquired | $ 2.9 |
Estimated useful life (in years) | 8 years |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets (Goodwill) (Details) $ in Millions | 9 Months Ended |
Apr. 30, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance as of July 31, 2016 | $ 163.5 |
Goodwill acquired | 75.3 |
Balance as of April 30, 2017 | $ 238.8 |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets (Purchased Intangible Assets by Major Class) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 83.9 | $ 64.4 |
Accumulated amortization | (27.4) | (20.4) |
Net carrying amount | 56.5 | 44 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 69.7 | 53.1 |
Accumulated amortization | (21.3) | (15.4) |
Net carrying amount | 48.4 | 37.7 |
Acquired intellectual property | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 8.9 | 8.9 |
Accumulated amortization | (3.6) | (2.9) |
Net carrying amount | 5.3 | 6 |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 2.9 | 0 |
Accumulated amortization | (0.1) | 0 |
Net carrying amount | 2.8 | 0 |
In-process research and development held for defensive purposes | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 1.9 | 1.9 |
Accumulated amortization | (1.9) | (1.6) |
Net carrying amount | 0 | 0.3 |
Other | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 0.5 | 0.5 |
Accumulated amortization | (0.5) | (0.5) |
Net carrying amount | $ 0 | $ 0 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2.5 | $ 2.3 | $ 7.1 | $ 7.1 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Future Amortization Expense of Intangible Assets) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining 2,017 | $ 2.7 | |
2,018 | 10.7 | |
2,019 | 10.6 | |
2,020 | 10.6 | |
2,021 | 8.9 | |
2022 and thereafter | 13 | |
Net carrying amount | $ 56.5 | $ 44 |
Convertible Senior Notes (Addit
Convertible Senior Notes (Additional Information) (Details) $ / shares in Units, shares in Millions, $ in Millions | Apr. 30, 2017USD ($) | Jun. 30, 2014USD ($)shares$ / shares | Jul. 31, 2016USD ($) |
Debt Instrument | |||
Aggregate principal amount | $ | $ 575 | ||
Contractual interest rate (in percentage) | 0.00% | ||
Number of common stock convertible at initial conversion rate (in shares) | shares | 5.2 | ||
Initial conversion price (in usd per share) | $ / shares | $ 110.28 | ||
Convertible Senior Notes, threshold trading days (in days) | 20 | ||
Convertible Senior Notes, threshold consecutive trading days (in days) | 30 days | ||
Convertible Senior Notes, threshold percentage of stock price trigger (in percentage) | 130.00% | ||
Convertible Senior Notes, threshold business days, per $1,000 principal (in days) | 5 | ||
Convertible Senior Notes, threshold consecutive trading days, per $1,000 principal (in days) | 5 days | ||
Convertible Senior Notes, threshold percentage of Note price trigger, per $1,000 principal (in percentage) | 98.00% | ||
If-converted value in excess of principal | $ | $ 7.7 | ||
Shares of common stock covered by Note Hedges (in shares) | shares | 5.2 | ||
Warrants sold, shares authorized to sell to counterparties (in shares) | shares | 5.2 | ||
Strike price of warrants (in usd per share) | $ / shares | $ 137.85 | ||
Level 2 | |||
Debt Instrument | |||
Fair value of Convertible Senior Notes | $ | $ 671.3 | $ 761.9 |
Convertible Senior Notes (Compo
Convertible Senior Notes (Components of Convertible Senior Notes) (Details) - USD ($) $ in Millions | Apr. 30, 2017 | Jul. 31, 2016 |
Debt Instruments [Abstract] | ||
Principal | $ 575 | $ 575 |
Less: debt discount and debt issuance costs, net of amortization | 56.6 | 74.8 |
Net carrying amount | 518.4 | 500.2 |
Equity | $ 109.8 | $ 109.8 |
Convertible Senior Notes (Sched
Convertible Senior Notes (Schedule of Interest Expense Recognized) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Amortization of debt discount | $ 5.5 | $ 5.3 | $ 16.4 | $ 15.7 |
Amortization of debt issuance costs | 0.7 | 0.6 | 1.9 | 1.7 |
Total interest expense recognized | $ 6.2 | $ 5.9 | $ 18.3 | $ 17.4 |
Effective interest rate of the liability component (in percentage) | 4.80% | 4.80% | 4.80% | 4.80% |
Commitments and Contingencies44
Commitments and Contingencies (Lease Commitment) (Details) $ in Millions | Apr. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining 2,017 | $ 7.2 |
2,018 | 29.7 |
2,019 | 48.8 |
2,020 | 52.2 |
2,021 | 56.5 |
2022 and thereafter | 318.5 |
Committed gross lease payments | 512.9 |
Less: proceeds from sublease rental | 2.9 |
Net operating lease obligation | $ 510 |
Commitments and Contingencies45
Commitments and Contingencies (Manufacturing Purchase Commitments) (Details) $ in Millions | Apr. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Manufacturing purchase commitments | $ 104.3 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Millions, $ in Millions | Feb. 24, 2017 | Aug. 26, 2016 | Apr. 30, 2017 | Apr. 30, 2017 |
Equity [Abstract] | ||||
Share repurchase, authorized amount | $ 500 | $ 500 | ||
Share repurchase, total authorized amount | $ 1,000 | $ 1,000 | ||
Shares repurchased and retired during the period (in shares) | 1.1 | 2.4 | ||
Shares repurchased and retired during period, value | $ 125 | $ 295.1 | ||
Share repurchase, remaining authorized repurchase amount | $ 704.9 | $ 704.9 |
Equity Award Plans (Stock Optio
Equity Award Plans (Stock Option Activities) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended |
Apr. 30, 2017 | Jul. 31, 2016 | |
Options, Outstanding Roll Forward | ||
Balance, beginning (in shares) | 2.1 | |
Options granted (in shares) | 0 | |
Options forfeited (in shares) | 0 | |
Options exercised (in shares) | (0.5) | |
Balance, ending (in shares) | 1.6 | 2.1 |
Options, Outstanding, Weighted Average Exercise Price Roll Forward | ||
Balance, beginning (in usd per share) | $ 13.42 | |
Options granted (in usd per share) | 0 | |
Options forfeited (in usd per share) | 0 | |
Options exercised (in usd per share) | 14.23 | |
Balance, ending (in usd per share) | $ 13.20 | $ 13.42 |
Options, Additional Disclosures | ||
Weighted-average remaining contractual life (in years) | 4 years 6 months | 5 years 2 months |
Aggregate intrinsic value | $ 156.7 | $ 244.9 |
Options exercisable (in shares) | 1.6 | |
Options exercisable, weighted-average exercise price (in usd per share) | $ 13.20 | |
Options exercisable, weighted-average remaining contractual term (in years) | 4 years 6 months | |
Options exercisable, aggregate intrinsic value | $ 156.7 |
Equity Award Plans (Restricted
Equity Award Plans (Restricted Stock Unit, Restricted Stock Award, and Performance-Based Stock Award Activities) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 31, 2016 | Apr. 30, 2017 | Jul. 31, 2016 | |
Performance-based stock awards (PSAs) | |||
Restricted Stock Unit (RSU), Restricted Stock Award (RSA), and Performance-Based Stock Award (PSA), Outstanding Roll Forward | |||
Granted (in shares) | 0.2 | ||
Restricted stock awards (RSAs) and performance-based stock awards (PSAs) | |||
Restricted Stock Unit (RSU), Restricted Stock Award (RSA), and Performance-Based Stock Award (PSA), Outstanding Roll Forward | |||
Balance, beginning (in shares) | 1.1 | ||
Granted (in shares) | 0.3 | ||
Vested (in shares) | (0.3) | ||
Forfeited (in shares) | 0 | ||
Balance, ending (in shares) | 1.1 | 1.1 | |
RSUs, RSAs, and PSAs, Outstanding, Weighted Average Grant-Date Fair Value Per Share Roll Forward | |||
Balance, beginning (in usd per share) | $ 170.97 | ||
Granted (in usd per share) | 148.54 | ||
Vested (in usd per share) | 170.97 | ||
Forfeited (in usd per share) | 0 | ||
Balance, ending (in usd per share) | $ 164.24 | $ 170.97 | |
Restricted stock units (RSUs) | |||
Restricted Stock Unit (RSU), Restricted Stock Award (RSA), and Performance-Based Stock Award (PSA), Outstanding Roll Forward | |||
Balance, beginning (in shares) | 6.5 | ||
Granted (in shares) | 2.8 | ||
Vested (in shares) | (2.6) | ||
Forfeited (in shares) | (0.4) | ||
Balance, ending (in shares) | 6.3 | 6.5 | |
RSUs, RSAs, and PSAs, Outstanding, Weighted Average Grant-Date Fair Value Per Share Roll Forward | |||
Balance, beginning (in usd per share) | $ 130.14 | ||
Granted (in usd per share) | 143.28 | ||
Vested (in usd per share) | 118.53 | ||
Forfeited (in usd per share) | 137.88 | ||
Balance, ending (in usd per share) | $ 140.29 | $ 130.14 | |
RSUs, RSAs, and PSAs, Additional Disclosures | |||
Weighted-average remaining contractual term (in years) | 1 year 3 months | 1 year 1 month | |
Aggregate intrinsic value | $ 687.1 | $ 852.7 |
Equity Award Plans (Allocation
Equity Award Plans (Allocation of Share Based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 117.4 | $ 108.5 | $ 358 | $ 283.3 |
Total compensation cost not yet recognized, unvested awards | 913 | $ 913 | ||
Period for recognition of total compensation cost not yet recognized (in years) | 2 years 6 months | |||
Cost of product revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 1.8 | 1.6 | $ 5.5 | 4.5 |
Cost of subscription and support revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 14 | 11.5 | 41.3 | 29 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 37.1 | 36 | 116.4 | 95.9 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 46.2 | 43.8 | 139.7 | 110.4 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 18.3 | $ 15.6 | $ 55.1 | $ 43.5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (in percentage) | (14.50%) | (11.90%) | (9.10%) | (10.30%) | |
Unrecognized tax benefits | $ 289.1 | $ 289.1 | $ 127.7 | ||
Unrecognized tax benefits that would affect income tax expense | $ 29.2 | $ 29.2 | $ 21.9 |
Net Income (Loss) Per Share (Co
Net Income (Loss) Per Share (Computation of Basic and Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Apr. 30, 2016 | Apr. 30, 2017 | Apr. 30, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ||||
Net loss | $ (60.9) | $ (64.1) | $ (178.4) | $ (161.3) |
Weighted-average shares used to compute net loss per share, basic and diluted (in shares) | 91 | 87.8 | 90.5 | 86.5 |
Net loss per share, basic and diluted (in usd per share) | $ (0.67) | $ (0.73) | $ (1.97) | $ (1.86) |
Net Income (Loss) Per Share (Sc
Net Income (Loss) Per Share (Schedule of Antidilutive Securities Excluded from Computation) (Details) - shares shares in Millions | 9 Months Ended | |
Apr. 30, 2017 | Apr. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 19.4 | 20.8 |
Restricted stock units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 6.3 | 7 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 5.2 | 5.2 |
Warrants related to the issuance of convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 5.2 | 5.2 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 1.6 | 2.3 |
Restricted stock awards (RSAs) and performance-based stock awards (PSAs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities (in shares) | 1.1 | 1.1 |