Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Jul. 31, 2021 | Aug. 31, 2021 | Jan. 31, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jul. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-37883 | ||
Entity Registrant Name | NUTANIX, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-0989767 | ||
Entity Address, Address Line One | 1740 Technology Drive, Suite 150 | ||
Entity Address, City or Town | San Jose | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95110 | ||
City Area Code | 408 | ||
Local Phone Number | 216-8360 | ||
Title of 12(b) Security | Class A Common Stock, $0.000025 par value per share | ||
Trading Symbol | NTNX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5.9 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE As noted herein, certain information called for by Parts II and III is incorporated by reference to specified portions of the registrant’s definitive proxy statement to be filed in conjunction with the registrant’s 2021 annual meeting of stockholders, which is expected to be filed not later than 120 days after the registrant's fiscal year ended July 31, 2021 . | ||
Entity Central Index Key | 0001618732 | ||
Current Fiscal Year End Date | --07-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 208,597,261 | ||
Common Class B | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 5,622,877 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 285,723 | $ 318,737 |
Short-term investments | 928,006 | 401,041 |
Accounts receivable, net of allowances of $804 and $892, respectively | 180,781 | 242,516 |
Deferred commissions—current | 110,935 | 68,694 |
Prepaid expenses and other current assets | 56,816 | 63,032 |
Total current assets | 1,562,261 | 1,094,020 |
Property and equipment, net | 131,621 | 143,172 |
Operating lease right-of-use assets | 105,903 | 127,326 |
Deferred commissions—non-current | 232,485 | 146,834 |
Intangible assets—net | 32,012 | 49,392 |
Goodwill | 185,260 | 185,260 |
Other assets—non-current | 27,954 | 22,543 |
Total assets | 2,277,496 | 1,768,547 |
Current liabilities: | ||
Accounts payable | 47,056 | 54,029 |
Accrued compensation and benefits | 162,337 | 109,109 |
Accrued expenses and other current liabilities | 39,404 | 25,924 |
Deferred revenue—current | 636,421 | 534,572 |
Operating lease liabilities—current | 42,670 | 36,569 |
Total current liabilities | 927,888 | 760,203 |
Deferred revenue—non-current | 676,502 | 648,869 |
Operating lease liabilities—non-current | 86,599 | 116,794 |
Convertible senior notes, net | 1,055,694 | 490,222 |
Derivative Liability | 500,175 | 230,910 |
Other liabilities-non-current | 42,679 | 27,436 |
Total liabilities | 3,289,537 | 2,043,524 |
Commitments and contingencies (Note 7) | ||
Stockholders’ (deficit) equity: | ||
Preferred stock, par value of $0.000025 per share - 200,000 shares authorized as of July 31, 2020 and 2021; no shares issued and outstanding as of July 31, 2020 and 2021 | ||
Common stock, par value of $0.000025 per share -1,200,000 (1,000,000 Class A, 200,000 Class B) shares authorized as of July 31, 2020 and 2021; 201,949 (186,846 Class A and 15,103 Class B) and 214,210 (208,579 Class A and 5,631 Class B) shares issued and outstanding as of July 31, 2020 and 2021 | 5 | 5 |
Additional paid-in capital | 2,615,317 | 2,245,180 |
Accumulated other comprehensive income (loss) | 8 | 2,030 |
Accumulated deficit | (3,627,355) | (2,522,192) |
Total stockholders' deficit | (1,012,041) | (274,977) |
Total liabilities and stockholders' deficit | $ 2,277,496 | $ 1,768,547 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Accounts receivable, allowance | $ 892 | $ 804 |
Preferred stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Common stock, shares authorized (in shares) | 1,200,000 | 1,200,000 |
Common stock, shares issued (in shares) | 214,210 | 201,949 |
Common stock, shares outstanding (in shares) | 214,210 | 201,949 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 208,579 | 186,846 |
Common stock, shares outstanding (in shares) | 208,579 | 186,846 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Common stock, shares authorized (in shares) | 200,000 | 200,000 |
Common stock, shares issued (in shares) | 5,631 | 15,103 |
Common stock, shares outstanding (in shares) | 5,631 | 15,103 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenue: | |||
Total revenue | $ 1,394,364 | $ 1,307,682 | $ 1,236,143 |
Cost of revenue: | |||
Total cost of revenue | 291,906 | 286,689 | 304,128 |
Gross profit | 1,102,458 | 1,020,993 | 932,015 |
Operating expenses: | |||
Sales and marketing | 1,052,508 | 1,160,389 | 909,750 |
Research and development | 556,950 | 553,978 | 500,719 |
General and administrative | 153,782 | 135,547 | 119,587 |
Total operating expenses | 1,763,240 | 1,849,914 | 1,530,056 |
Loss from operations | (660,782) | (828,921) | (598,041) |
Other expense, net | (354,991) | (26,300) | (15,019) |
Loss before provision for income taxes | (1,015,773) | (855,221) | (613,060) |
Provision for income taxes | 18,487 | 17,662 | 8,119 |
Net loss | $ (1,034,260) | $ (872,883) | $ (621,179) |
Net loss per share attributable to Class A and Class B Common stockholders -basic and diluted | $ (5.01) | $ (4.48) | $ (3.43) |
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders - basic and diluted | 206,475 | 194,719 | 181,031 |
Product | |||
Revenue: | |||
Total revenue | $ 705,804 | $ 765,822 | $ 832,419 |
Cost of revenue: | |||
Total cost of revenue | 55,287 | 71,312 | 143,078 |
Support, Entitlements and Other Services | |||
Revenue: | |||
Total revenue | 688,560 | 541,860 | 403,724 |
Cost of revenue: | |||
Total cost of revenue | $ 236,619 | $ 215,377 | $ 161,050 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (1,034,260) | $ (872,883) | $ (621,179) |
Other comprehensive loss, net of tax: | |||
Change in unrealized gain (loss) on available-for-sale securities, net of tax | (2,038) | 1,361 | 1,671 |
Comprehensive loss | $ (1,036,298) | $ (871,522) | $ (619,508) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Stockholders' (deficit) equity, beginning balance at Jul. 31, 2018 | $ 326,779 | $ 4 | $ 1,355,907 | $ (1,002) | $ (1,028,130) |
Stockholders' equity, beginning balance (in shares) at Jul. 31, 2018 | 172,858 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock through employee equity incentive plans | 12,187 | 12,187 | |||
Issuance of common stock for stock awards, net of repurchases (in shares) | 11,272 | ||||
Issuance of common stock from ESPP purchase | 57,218 | $ 1 | 57,217 | ||
Issuance of common stock from ESPP purchase (in shares) | 2,008 | ||||
Issuance of common stock in connection with business combinations | 103,305 | 103,305 | |||
Issuance of common stock for acquisitions (in shares) | 2,457 | ||||
Vesting of early exercised stock options | 183 | 183 | |||
Stock-based compensation | 306,729 | 306,729 | |||
Other comprehensive income (loss) | 1,671 | 1,671 | |||
Net loss | (621,179) | (621,179) | |||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2019 | 186,893 | $ 5 | 1,835,528 | 669 | (1,649,309) |
Stockholders' equity, ending balance (in shares) at Jul. 31, 2019 | 188,595 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock through employee equity incentive plans | 7,024 | 7,024 | |||
Issuance of common stock for stock awards, net of repurchases (in shares) | 10,034 | ||||
Issuance of common stock from ESPP purchase | 50,630 | 50,630 | |||
Issuance of common stock from ESPP purchase (in shares) | 3,320 | ||||
Stock-based compensation | 351,998 | 351,998 | |||
Other comprehensive income (loss) | 1,361 | 1,361 | |||
Net loss | (872,883) | (872,883) | |||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2020 | $ (274,977) | $ 5 | 2,245,180 | 2,030 | (2,522,192) |
Stockholders' equity, ending balance (in shares) at Jul. 31, 2020 | 201,949,000 | 201,949 | |||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock through employee equity incentive plans | $ 15,601 | 15,601 | |||
Issuance of common stock for stock awards, net of repurchases (in shares) | 13,457,000 | ||||
Issuance of common stock from ESPP purchase | $ 50,167 | 50,167 | |||
Issuance of common stock from ESPP purchase (in shares) | 4,000,000 | 3,980 | |||
Repurchase and retirement of common stock | $ (125,079) | (54,176) | (70,903) | ||
Repurchase and retirement of common stock (in shares) | (5,176) | ||||
Stock-based compensation | 358,545 | 358,545 | |||
Other comprehensive income (loss) | (2,038) | (2,038) | |||
Net loss | (1,034,260) | (1,034,260) | |||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2021 | $ (1,012,041) | $ 5 | $ 2,615,317 | $ (8) | $ (3,627,355) |
Stockholders' equity, ending balance (in shares) at Jul. 31, 2021 | 214,210,000 | 214,210,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | ||
Cash flows from operating activities: | ||||
Net loss | $ (1,034,260) | $ (872,883) | $ (621,179) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 94,373 | 93,773 | 77,612 | |
Stock-based compensation | 358,545 | 351,998 | 306,729 | |
Change in fair value of derivative liability | 269,265 | |||
Change in fair value of contingent consideration | (832) | |||
Amortization of debt discount and issuance cost | 63,859 | 31,313 | 29,313 | |
Operating lease cost, net of accretion | 34,757 | 30,374 | ||
Impairment of lease-related assets | 1,420 | 3,002 | ||
Non-cash interest expense | 16,074 | |||
Other | 6,380 | 324 | (2,786) | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | 64,483 | 4,334 | 15,704 | |
Deferred commissions | (127,891) | (61,816) | (39,333) | |
Prepaid expenses and other assets | 4,057 | 10,089 | (12,037) | |
Accounts payable | (5,762) | (16,574) | 13,508 | |
Accrued compensation and benefits | (50,916) | 18,765 | 14,406 | |
Accrued expenses and other liabilities | 14,824 | 3,400 | (17,454) | |
Operating leases, net | (37,582) | (28,394) | ||
Deferred revenue | 126,732 | 272,410 | 278,517 | |
Net cash provided by operating activities | (99,810) | (159,885) | 42,168 | |
Cash flows from investing activities: | ||||
Maturities of investments | 784,176 | 645,828 | 588,763 | |
Purchases of investments | (1,392,737) | (607,194) | (468,144) | |
Sales of investments | 70,055 | 75,413 | ||
Payments for acquisitions, net of cash acquired | (19,017) | |||
Purchases of property and equipment | (58,647) | (89,488) | (118,452) | |
Net cash (used in) provided by investing activities | (597,153) | 24,559 | (16,850) | |
Cash flows from financing activities: | ||||
Payment of debt in conjunction with acquisitions | (991) | |||
Payment of contingent consideration associated with an acquisitions | (1,040) | |||
Proceeds from sales of shares through employee equity incentive plans | 65,766 | 57,797 | 69,210 | |
Proceeds from the issuance of convertible notes, net of issuance costs | 723,617 | (75) | ||
Repurchases of common stock | (125,079) | |||
Payment Of Finance Lease Obligations | (459) | |||
Net cash provided by financing activities | 663,845 | 57,797 | 67,104 | |
Net increase in cash, cash equivalents and restricted cash | (33,118) | (77,529) | 92,422 | |
Cash, cash equivalents and restricted cash—beginning of period | 321,991 | 399,520 | 307,098 | |
Cash, cash equivalents and restricted cash—end of period | 288,873 | 321,991 | 399,520 | |
Restricted cash | [1] | 3,150 | 3,254 | 2,842 |
Cash and cash equivalents—end of period | 285,723 | 318,737 | 396,678 | |
Supplemental disclosures of cash flow information: | ||||
Cash paid for income taxes | 16,639 | 16,625 | 28,999 | |
Supplemental disclosures of non-cash investing and financing information: | ||||
Purchases of property and equipment included in accounts payable and accrued liabilities | 12,832 | $ 4,630 | 8,074 | |
Finance lease liabilities arising from obtaining right-of-use assets | $ 8,299 | |||
Vesting of early exercised stock options | 183 | |||
Issuance of common stock for business combinations | $ 103,305 | |||
[1] | Included within other assets—non-current in the consolidated balance sheets. |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Overview and Summary of Significant Accounting Policies | NOTE 1. OVER VIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business Nutanix, Inc. was incorporated in the state of Delaware in September 2009. Nutanix, Inc. is headquartered in San Jose, California, and together with its wholly-owned subsidiaries (collectively, "we," "us," "our" or "Nutanix"), has operations throughout North America, Europe, Asia Pacific, the Middle East, Latin America and Africa. We provide a leading enterprise cloud platform, which we call the Nutanix Cloud Platform, that consists of software solutions and cloud services that power our customers' enterprise infrastructure. Our solutions run across private-, hybrid- and multicloud environments, and allow organizations to seamlessly "lift and shift" their workloads, including enterprise applications, high-performance databases, end-user computing and virtual desktop infrastructure ("VDI") services, cloud native workloads, and analytics applications, between different cloud environments. Our solutions are primarily sold through channel partners, including distributors, resellers and original equipment manufacturers ("OEMs") (collectively, "Partners"), and delivered directly to our end customers. Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of Nutanix, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such management estimates and assumptions include, but are not limited to, the best estimate of selling prices for products and related support; useful lives and recoverability of intangible assets and property and equipment; allowance for credit losses; determination of fair value of stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; purchase commitment liabilities to our OEMs; sales commissions expense and the period of benefit for deferred commissions; whether an arrangement is or contains a lease; the incremental borrowing rate to measure the present value of right-of-use assets and lease liabilities; the inputs used to determine the fair value of the contingent liability associated with the conversion feature of the 2.50% convertible senior notes due 2026; and contingencies and litigation. Management evaluates these estimates and assumptions on an ongoing basis using historical experience and other factors and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions. In response to the ongoing and rapidly evolving COVID-19 pandemic, we considered the impact of the estimated economic implications on our critical and significant accounting estimates, including assessment of collectibility of customer contracts, valuation of accounts receivable, provision for purchase commitments to our OEMs and impairment of long-lived assets, right-of-use assets, and deferred commissions. Concentration of Risk Credit Risk —Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. We invest only in high-quality credit instruments and maintain our cash and cash equivalents and available-for-sale investments in fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Our deposits are with multiple institutions, however such deposits may exceed federally insured limits. We provide credit, in the normal course of business, to a number of companies and perform credit evaluations of our customers. Concentration of Revenue and Accounts Receivable — We sell our products primarily through our Partners and occasionally directly to end customers. For the fiscal years ended July 31, 2019, 2020 and 2021, no end customer accounted for more than 10% of total revenue or accounts receivable. For each significant Partner, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable Fiscal Year Ended July 31, as of July 31, Partners 2019 2020 2021 2020 2021 Partner A 24 % 29 % 32 % 33 % 35 % Partner B 13 % 14 % 15 % 16 % 23 % Partner C 10 % (1) 10 % (1) (1) Partner D 10 % (1) (1) (1) (1) (1) Less than 10% Summary of Significant Accounting Policies Cash, Cash Equivalents and Short-Term Investments We classify all highly liquid investments with original maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate such designation as of each balance sheet date. We classify and account for our marketable securities as available-for-sale securities. We classify our marketable securities with stated maturities greater than twelve months as short-term investments due to our intent and ability to use these securities to support our current operations. Our marketable securities are recorded at their estimated fair value. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income (loss). We periodically review whether our securities may be other-than-temporarily impaired, including whether or not (i) we have the intent to sell the security or (ii) it is more likely than not that we will be required to sell the security before its anticipated recovery. If one of these factors is met, we will record an impairment loss associated with our impaired investment. The impairment loss will be recorded as a write-down of investments in the consolidated balance sheets and a realized loss within other expense in the consolidated statements of operations. Fair Value Measurement We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which to transact and the market-based risk. We apply fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The fair value of the 0 % convertible senior notes, due 2023, (the "2023 Notes") is determined based on the closing trading price per $ 100 of the 2023 Notes as of the last day of trading for the period. The fair value of the 2.50 % convertible senior notes, due 2026, (the "2026 Notes") is determined based on a binomial model. Derivative Liability We evaluate convertible notes or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity. The result of this accounting guidance could result in the fair value of a financial instrument being classified as a derivative instrument and recorded at fair market value at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statements of operations as other income or other expense. Once the criteria for conversion is fixed, the derivative instrument is marked to fair value and reclassified to equity. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. Credit is extended to customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for credit losses. The allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. We assess credit losses on accounts receivable by taking into consideration past collection experience, the credit quality of the customer, the age of the receivable balance, current and future economic conditions, and forecasts that may affect the collectibility of the reported amount. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record an allowance for credit losses in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we record an allowance for credit losses based on the length of time the receivable is past due and our historical experience of collections and write-offs. The changes in the allowance for credit losses are as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Allowance for credit losses—beginning balance $ 815 $ 379 $ 804 Charged to allowance for credit losses 437 822 655 Recoveries ( 290 ) ( 22 ) ( 286 ) Write-offs ( 583 ) ( 375 ) ( 281 ) Allowance for credit losses—ending balance $ 379 $ 804 $ 892 Property and Equipment Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. We include the cost to acquire demonstration units and the related accumulated depreciation in property and equipment as such units are generally not available for sale. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. Leases We determine if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date when the leased assets are made available for our use. Operating leases are included in operating lease right-of-use assets, operating lease liabilities—current and operating lease liabilities—non-current in our consolidated balance sheet as of July 31, 2021. Finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other liabilities—non-current in our consolidated balance sheet as of July 31, 2021. Right-of-use assets ("ROU assets") represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of fixed payments under the arrangement, less any lease incentives, such as rent holidays. Variable lease payments not dependent on an index or a rate are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance, property taxes and utilities. We use an estimate of our incremental borrowing rate ("IBR") based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, we consider information including, but not limited to, our credit rating, the lease term and the currency in which the arrangement is denominated. For leases which commenced prior to our adoption of Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842"), we used the IBR as of August 1, 2019. Our lease terms may include renewal options, which are not included in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Lease costs are recognized on a straight-line basis as operating expenses within our consolidated statements of operations. We present lease payments within cash flows from operations within the consolidated statements of cash flows. For our operating leases, we elected to account for lease and non-lease components as a single lease component. Additionally, we do not record leases on the consolidated balance sheet that have a lease term of 12 months or less at the lease commencement date. Business Combinations We account for our acquisitions using the acquisition method. Goodwill is measured at the acquisition date as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. Significant estimates and assumptions are made by management to value such assets and liabilities. Although we believe that those estimates and assumptions are reasonable and appropriate, they are inherently uncertain and subject to refinement. Additional information related to the acquisition date fair value of acquired assets and assumed liabilities obtained during the measurement period, not to exceed one year, may result in changes to the recorded values of such assets and liabilities, resulting in an offsetting adjustment to the goodwill associated with the business acquired. Uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly. We will record any adjustments to our preliminary estimates to goodwill, provided that it is within the one-year measurement period. Any contingent consideration payable is recognized at fair value at the acquisition date. Liability-classified contingent consideration is remeasured each reporting period, with changes in fair value recognized in earnings until the contingent consideration is settled. Acquisition related costs incurred in connection with a business combination, other than those associated with the issuance of debt or equity securities, are expensed as incurred. Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that are not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, customer relationships and trade names, resulting from business combinations. Finite-lived intangible assets are recorded at fair value, net of accumulated amortization. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense is included as a component of cost of product revenue and sales and marketing expense in the accompanying consolidated statements of operations. Amounts included in sales and marketing expense relate to customer relationships. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually, as of May 1 of each year. Such goodwill and other intangible assets may also be tested for impairment between annual tests in the presence of impairment indicators such as, but not limited to: (i) a significant adverse change in legal factors or in the business climate; (ii) a substantial decline in our market capitalization; (iii) an adverse action or assessment by a regulator; (iv) unanticipated competition; (v) loss of key personnel; (vi) a more likely-than-not expectation of the sale or disposal of a reporting unit or a significant portion thereof; (vii) a realignment of our resources or restructuring of our existing businesses in response to changes to industry and market conditions; (viii) testing for recoverability of a significant asset group within a reporting unit; or (ix) a higher discount rate used in the impairment analysis as impacted by an increase in interest rates. Goodwill is tested for impairment by comparing the reporting unit's carrying value, including goodwill, to the fair value of the reporting unit. We operate under one reporting unit and for our annual goodwill impairment test, we determine the fair value of our reporting unit based on our enterprise value. We may elect to utilize a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying value, an impairment analysis will be performed. We compare the fair value of our reporting unit with its carrying amount and if the carrying value of the reporting unit exceeds its fair value, an impairment loss will be recognized. Long-lived assets, such as property and equipment and finite-lived intangible assets subject to depreciation and amortization, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Among the factors and circumstances we consider in determining recoverability are: (i) a significant decrease in the market price of a long-lived asset; (ii) a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition; and (v) current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. There have been no indicators of impairment of goodwill, intangible assets or other long-lived assets and we did not record any material impairment losses during fiscal 2019, 2020 or 2021 . Revenue Recognition The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach: • Identification of the contract, or contracts, with a customer — A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. • Identification of the performance obligations in the contract — Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or services either on their own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. • Determination of the transaction price — The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. • Allocation of the transaction price to the performance obligations in the contract — If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP"). We determine SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, we estimate the SSP, taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. • Recognition of revenue when, or as, performance obligations are satisfied — We satisfy performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied with the transfer of a promised good or service to a customer. For additional details on revenue recognition, refer to Note 2 of Notes to Consolidated Financial Statements. Contracts with multiple performance obligations — The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price SSP basis. For deliverables that we routinely sell separately, such as software entitlement and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months. For those that are not sold routinely, we determine SSP based on our overall pricing trends and objectives, taking into consideration market conditions and other factors, including the value of our contracts, the products sold and geographic locations. Contract balances — The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period we deliver goods or provide services, or when our right to consideration is unconditional. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. Unbilled accounts receivable, included in accounts receivable, net on the consolidated balance sheets, was not material for any of the periods presented. Payment terms on invoiced amounts are typically 30-45 days. The balance of accounts receivable, net of allowance for credit losses, as of July 31, 2020 and 2021 is presented in the accompanying consolidated balance sheets. Costs to obtain and fulfill a contract — We capitalize commissions paid to sales personnel and the related payroll taxes when customer contracts are signed. These costs are recorded as deferred commissions in the consolidated balance sheets, current and non-current. We determine whether costs should be deferred based on our sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Commissions paid upon the initial acquisition of a contract are recognized over the estimated period of benefit, which may exceed the term of the initial contract if the commissions expected to be paid upon renewal are not commensurate with that of the initial contract. Accordingly, deferred costs are recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation over the entire period of benefit and included in sales and marketing expense in the consolidated statements of operations. We determine the estimated period of benefit by evaluating the expected renewals of customer contracts, the duration of relationships with our customers, customer retention data, our technology development lifecycle and other factors. Deferred costs are periodically reviewed for impairment. Effective August 1, 2020, we changed our sales compensation plans such that commissions paid on subscription software license renewals are not commensurate with commissions paid on the initial contract. Accordingly, commissions paid on initial sales of subscription software licenses are now being recognized in a pattern consistent with the revenue recognition for each performance obligation, including those we expect upon renewal, over the entire period of benefit, rather than only the term of the initial contract, thus resulting in less expense being recognized in the initial contract period. Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our consolidated statements of operations. Deferred revenue — Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and primarily pertain to software entitlement and support subscriptions and professional services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date. Cost of Revenue Cost of revenue consists of cost of product revenue and cost of support, entitlements and other services revenue. Personnel costs associated with our operations and global customer support organizations consist of salaries, benefits and stock-based compensation. Allocated costs consist of certain facilities, depreciation and amortization, recruiting and information technology costs allocated based on headcount. Warranties We generally provide a one-year warranty on hardware sold by us and a 90-day warranty on software licenses. The hardware warranty provides for parts replacement for defective components and the software warranty provides for bug fixes. With respect to the hardware warranty obligation, we have a warranty agreement with our contract manufacturers under which the OEMs are generally required to replace defective hardware within three years of shipment. Furthermore, our post-contract customer support ("PCS") agreements provide for the same parts replacement that customers are entitled to under the warranty program, except that replacement parts are delivered according to targeted response times to minimize disruption to the customers’ critical business applications. Substantially all customers purchase PCS agreements. Given the warranty agreement with our OEMs and considering that substantially all products are sold together with PCS agreements, we generally have very limited exposure related to warranty costs and therefore no warranty reserve has been recognized. Research and Development Our research and development expense consists primarily of product development personnel costs, including salaries and benefits, stock-based compensation and allocated facilities costs. Research and development costs are expensed as incurred. Currently, we expense the software development costs incurred in the research and development of new products and enhancements to existing products as incurred, as from the inception of the product development, our software products are primarily intended to be marketed and sold to customers on-premises, either standalone and/or with other product offerings. Stock-Based Compensation Stock-based compensation expense is measured based on the grant date fair value of share-based awards. The fair value of the purchase rights under our 2016 Employee Stock Purchase Plan ("2016 ESPP") is estimated using the Black-Scholes-Merton ("Black-Scholes") option pricing model, which is impacted by the fair value of our common stock, as well as changes in assumptions regarding a number of subjective variables. These variables include the expected common stock price volatility over the term of the awards, the expected term of the awards, risk-free interest rates and expected dividend yield. The fair value of restricted stock units ("RSUs") is determined using the fair value of our common stock on the date of grant. We grant stock awards with service conditions only and with both service and performance or market-based conditions. We recognize stock-based compensation expense for employee stock awards with a service condition only using the straight-line method over the requisite service period of the awards, which is generally the vesting period. We use the graded vesting attribution method to recognize stock-based compensation expense related to employee stock awards that contain both service and performance or market-based conditions. The fair value of the 2016 ESPP purchase rights is recognized as expense on a straight-line basis over the offering period. We account for forfeitures of all share-based awards when they occur. Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Transactions denominated in currencies other than the functional currency are remeasured at the average exchange rate in effect during the reporting period. At the end of each reporting period all monetary assets and liabilities of our subsidiaries are remeasured at the current U.S. dollar exchange rate at the end of the reporting period. Remeasurement gains and losses are included within other expense, net in the accompanying consolidated statements of operations. During the fiscal years ended July 31, 2019, 2020 and 2021 , we recognized foreign currency losses of $ 2.5 million, $ 9.4 million and $ 8.9 million, respectively. To date, we have not undertaken any hedging transactions related to foreign currency exposure. Segments Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. Income Taxes We account for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance on amounts that are more likely than n |
Revenue, Deferred Revenue and D
Revenue, Deferred Revenue and Deferred Commissions | 12 Months Ended |
Jul. 31, 2021 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue, Deferred Revenue and Deferred Commissions | NOTE 2. REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS Disaggregation of Revenue and Revenue Recognition We generate revenue primarily from the sale of our enterprise cloud platform, which can be delivered pre-installed on an appliance that is configured to order or delivered separately to be utilized on a variety of certified hardware platforms. When the software license is not portable to other appliances, it can be used over the life of the associated appliance, while subscription term-based licenses typically have a term of one to five years . Configured-to-order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our OEMs or in limited cases, directly from Nutanix. Our enterprise cloud platform typically includes one or more years of support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support. A substantial portion of sales are made through channel partners and OEM relationships. The following table depicts the disaggregation of revenue by revenue type, consistent with how we evaluate our financial performance: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Subscription $ 648,415 $ 1,030,180 $ 1,243,621 Non-portable software 449,131 208,158 71,390 Hardware 105,321 23,455 6,259 Professional services 33,276 45,889 73,094 Total revenue $ 1,236,143 $ 1,307,682 $ 1,394,364 Subscription revenue — Subscription revenue includes any performance obligation which has a defined term and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based software as a service ("SaaS") offerings. • Ratable — We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions. These offerings represented approximately $ 376.4 million, $ 508.8 million and $ 639.3 million of our subscription revenue for fiscal 2019, 2020 and 2021, respectively. • Upfront — Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer. These subscription software licenses represented approximately $ 272.0 million, $ 521.3 million and $ 604.3 million of our subscription revenue for fiscal 2019, 2020 and 2021, respectively. Non-portable software revenue — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and can be used over the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer. Hardware revenue — In transactions where the hardware appliance is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer. Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed. Significant changes in the balance of deferred revenue (contract liability) and deferred commissions (contract asset) for the periods presented are as follows: Deferred Deferred (in thousands) Balance as of July 31, 2019 $ 910,044 $ 153,712 Additions 815,257 233,917 Revenue/commissions recognized ( 541,860 ) ( 172,101 ) Balance as of July 31, 2020 1,183,441 215,528 Additions 818,042 310,966 Revenue/commissions recognized ( 688,560 ) ( 183,074 ) Balance as of July 31, 2021 $ 1,312,923 $ 343,420 During the fiscal year ended July 31, 2020 , we recognized revenue of approximately $ 371.8 million pertaining to amounts deferred as of July 31, 2019. During the fiscal year ended July 31, 2021 , we recognized revenue of approximately $ 488.2 million pertaining to amounts deferred as of July 31, 2020. Many of our contracted but not invoiced performance obligations are subject to cancellation terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized ("contracted not recognized"), which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods and excludes performance obligations that are subject to cancellation terms. Contracted not recognized revenue was approximately $ 1.4 billion as of July 31, 2021 , of which we expect to recognize approximately 50 % over the next 12 months, and the remainder thereafter. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jul. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 3. FAIR VALUE MEASUREMENTS The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value as follows: • Level I — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; • Level II — Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and • Level III — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. Assets and Liabilities Measured at Fair Value on a Recurring Basis Cash equivalents and short-term investments Our money market funds are classified within Level I due to the highly liquid nature of these assets and have unadjusted inputs, quoted prices in active markets for these assets at the measurement date from the financial institution that carries these investment securities. Our investments in available-for-sale debt securities such as commercial paper, corporate bonds and U.S. government securities are classified within Level II. The fair value of these securities is priced by using inputs based on non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The fair value of our financial assets and liabilities measured on a recurring basis is as follows: As of July 31, 2020 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 142,936 $ — $ — $ 142,936 Commercial paper — 8,999 — 8,999 Short-term investments: Corporate bonds — 345,265 — 345,265 Commercial paper — 29,702 — 29,702 U.S. government securities — 26,074 — 26,074 Total measured at fair value $ 142,936 $ 410,040 $ — $ 552,976 Cash 166,802 Total cash, cash equivalents and short-term $ 719,778 As of July 31, 2021 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 72,583 $ — $ — $ 72,583 Commercial paper — 29,997 — 29,997 Corporate bonds — 2,002 — 2,002 Short-term investments: Corporate bonds — 513,688 — 513,688 Commercial paper — 347,088 — 347,088 U.S. Government securities — 67,230 — 67,230 Total measured at fair value $ 72,583 $ 960,005 $ — $ 1,032,588 Cash 181,141 Total cash, cash equivalents and short-term $ 1,213,729 Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value, with the exception of the 2023 Notes and the 2026 Notes (collectively, the "Notes"). Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows: As of July 31, 2020 As of July 31, 2021 Carrying Estimated Carrying Estimated (in thousands) 2023 Notes $ 490,222 $ 529,385 $ 523,671 $ 602,272 2026 Notes — — 532,023 1,128,953 Total $ 490,222 $ 529,385 $ 1,055,694 $ 1,731,225 The carrying value of the 2023 Notes as of July 31, 2020 and 2021 was net of the unamortized debt discount of $ 80.3 million and $ 48.6 million, respectively, and unamortized debt issuance costs of $ 4.5 million and $ 2.7 million, respectively. The carrying value of the 2026 Notes as of July 31, 2021 includes $ 8.9 million of non-cash interest expense that was converted to the principal balance, net of the unamortized debt discount of $ 203.6 million and unamortized debt issuance costs of $ 23.3 million. The total estimated fair value of the 2023 Notes was determined based on the closing trading price per $ 100 of the 2023 Notes as of the last day of trading for the period. We consider the fair value of the 2023 Notes to be a Level 2 valuation due to the limited trading activity. The total estimated fair value of the 2026 Notes is based on a binomial model. We consider the fair value of the 2026 Notes to be a Level 3 valuation, as the 2026 Notes are not publicly traded. The Level 3 inputs used are the same as those used to determine the estimated fair value of the associated derivative liability, as detailed below. Derivative Liability The conversion feature of the 2026 Notes represents an embedded derivative. The 2026 Notes are not considered to be conventional debt and we determined that the embedded conversion feature was required to be bifurcated from the host debt and accounted for as a derivative liability, as the 2026 Notes were convertible into a variable number of shares until the conversion price became fixed in September 2021, based on the level of achievement of the associated financial performance metric. As such, the initial fair value of the derivative instrument was recorded as a liability in the consolidated balance sheet with the corresponding amount recorded as a discount to the 2026 Notes upon issuance. The derivative liability is considered a Level 3 valuation and is recorded at its estimated fair value at the end of each reporting period, with the change in fair value recognized within other expense, net in the consolidated statements of operations. The following table shows the estimated fair value of the derivative liability as of the issuance of the 2026 Notes and the change in fair value from issuance through July 31, 2021: Fiscal Year Ended (in thousands) Derivative liability at issuance of the 2026 Notes $ 230,910 Change in fair value 269,265 Derivative liability, end of period $ 500,175 We estimated the fair value of the derivative liability using a binomial model, with the following valuation inputs: As of September 24, 2020 July 31, 2021 Conversion ratio (1) Conversion price of $ 26.63 with a 37.552 conversion rate per $1,000 Conversion price of $ 27.75 with a 36.036 conversion rate per $1,000 Risk-free rate 0.4 % 0.7 % Discount rate (2) 9.0 % 6.5 % Volatility 42.7 % 40.0 % Stock price $ 21.26 $ 36.02 (1) The conversion ratio was estimated based on the latest forecast of the associated financial performance metric. (2) The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Jul. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | NOTE 4. BALANCE SHEET COMPONENTS Short-Term Investments The amortized cost of our short-term investments approximates their fair value. Unrealized losses related to our short-term investments are generally due to interest rate fluctuations, as opposed to credit quality. However, we review individual securities that are in an unrealized loss position in order to evaluate whether or not they have experienced or are expected to experience credit losses that would result in a decline in fair value. As of July 31, 2020 and 2021, unrealized gains and losses from our short-term investments were not material and were not the result of a decline in credit quality. As a result, at July 31, 2020 and 2021, we did not record any credit losses for these investments. The following table summarizes the estimated fair value of our investments in marketable debt securities by their contractual maturity dates: As of (in thousands) Due within one year $ 772,853 Due in one to two years 155,153 Total $ 928,006 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following: As of July 31, 2020 2021 (in thousands) Prepaid operating expenses $ 31,690 $ 36,455 VAT receivables 8,381 8,290 Tenant improvement allowance receivables 8,557 — Other current assets 14,404 12,071 Total prepaid expenses and other current assets $ 63,032 $ 56,816 Property and Equipment, Net Property and equipment, net consists of the following: Estimated As of July 31, Useful Life 2020 2021 (in months) (in thousands) Computer, production, engineering and other equipment 36 $ 245,245 $ 300,583 Demonstration units 12 66,569 68,992 Leasehold improvements (1) 65,557 62,676 Furniture and fixtures 60 17,026 16,518 Total property and equipment, gross 394,397 448,769 Less: accumulated depreciation (2) ( 251,225 ) ( 317,148 ) Total property and equipment, net $ 143,172 $ 131,621 (1) Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. (2) Includes a $ 1.2 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2020 and a $ 0.9 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2021. For additional information on these lease-related impairments, refer to Note 6. Depreciation expense related to our property and equipment was $ 60.8 million, $ 76.4 million and $ 76.5 million for the fiscal years ended July 31, 2019, 2020 and 2021, respectively. Intangible Assets, Net Intangible assets, net consists of the following: As of July 31, 2020 2021 (in thousands) Developed technology $ 79,300 $ 79,300 Customer relationships 8,860 8,860 Trade name 4,170 4,170 Total intangible assets, gross 92,330 92,330 Less: Accumulated amortization of developed technology ( 35,987 ) ( 50,764 ) Accumulated amortization of customer relationships ( 4,953 ) ( 6,513 ) Accumulated amortization of trade name ( 1,998 ) ( 3,041 ) Total accumulated amortization ( 42,938 ) ( 60,318 ) Total intangible assets, net $ 49,392 $ 32,012 Amortization expense related to our intangible assets is being recognized in the consolidated statements of operations within product cost of revenue for developed technology and sales and marketing expense for customer relationships and trade name. The changes in the net book value of intangible assets, net are as follows: As of July 31, 2020 2021 (in thousands) Intangible assets, net—beginning balance $ 66,773 $ 49,392 Amortization of intangible assets (1) ( 17,381 ) ( 17,380 ) Intangible assets, net—ending balance $ 49,392 $ 32,012 (1) Represents amortization expense related to intangible assets recognized during the year in the consolidated statements of operations, within product cost of revenue and sales and marketing expense . The estimated future amortization expense of our intangible assets is as follows: Fiscal Year Ending July 31: Amount (in thousands) 2022 $ 16,183 2023 10,856 2024 3,210 2025 1,763 Total $ 32,012 Goodwill The changes in the carrying amount of goodwill are as follows: Carrying Amount (in thousands) Balance at July 31, 2019 $ 185,180 Other 80 Balance at July 31, 2020 185,260 Balance at July 31, 2021 $ 185,260 Accrued Compensation and Benefits Accrued compensation and benefits consists of the following: As of July 31, 2020 2021 (in thousands) Accrued commissions $ 33,503 $ 48,321 Accrued vacation 24,006 26,961 Contributions to ESPP withheld 16,563 26,735 Payroll taxes payable 10,742 21,603 Accrued bonus 5,568 14,878 Accrued benefits 8,426 10,243 Other 10,301 13,596 Total accrued compensation and benefits $ 109,109 $ 162,337 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consists of the following: As of July 31, 2020 2021 (in thousands) Income taxes payable $ 9,703 $ 13,309 Accrued professional services 3,006 3,541 Other 13,215 22,554 Total accrued expenses and other current liabilities $ 25,924 $ 39,404 |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | NOTE 5. CONVERTIBLE SENIOR NOTES 2023 Notes In January 2018, we issued the 2023 Notes with a 0 % interest rate for an aggregate principal amount of $ 575.0 million, due in 2023, in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act. This included $ 75.0 million in aggregate principal amount of the 2023 Notes that we issued resulting from initial purchasers fully exercising their option to purchase additional notes. There are no required principal payments prior to the maturity of the 2023 Notes. The total net proceeds from the 2023 Notes are as follows: Amount (in thousands) Principal amount $ 575,000 Less: initial purchasers' discount ( 10,781 ) Less: cost of the bond hedges ( 143,175 ) Add: proceeds from the sale of warrants 87,975 Less: other issuance costs ( 707 ) Net proceeds $ 508,312 The 2023 Notes do not bear any interest and will mature on January 15, 2023, unless earlier converted or repurchased in accordance with their terms. The 2023 Notes are unsecured and do not contain any financial covenants or any restrictions on the payment of dividends, or the issuance or repurchase of securities by us. Each $ 1,000 of principal of the 2023 Notes will initially be convertible into 20.4705 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $ 48.85 per share, subject to adjustment upon the occurrence of specified events. Holders of these Notes may convert their Notes at their option at any time prior to the close of the business day immediately preceding October 15, 2022, only under the following circumstances: 1) during any fiscal quarter commencing after the fiscal quarter ending on April 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130 % of the conversion price on each applicable trading day; 2) during the five business day period after any five consecutive trading day period (the "measurement 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 Class A common stock and the conversion rate for the 2023 Notes on each such trading day; or 3) upon the occurrence of certain specified corporate events. Based on the closing price of our Class A common stock of $ 36.02 on July 31, 2021 , the if-converted value of the 2023 Notes was lower than the principal amount. The price of our Class A common stock was not greater than or equal to 130 % of the conversion price for 20 or more trading days during the 30 consecutive trading days ending on the last trading day of the quarter ended July 31, 2021. As such, the 2023 Notes are not convertible for the fiscal quarter commencing after July 31, 2021. On or after October 15, 2022, 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 of the 2023 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election. We intend to settle the principal of the 2023 Notes in cash. The conversion rate will be subject to adjustment in some events, but will not be adjusted for any accrued or unpaid interest. A holder who converts their 2023 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" per the indenture governing the 2023 Notes are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a fundamental change prior to the maturity date, holders may require us to repurchase for cash all or a portion of their 2023 Notes at a repurchase price equal to 100 % of the principal amount of the repurchased 2023 Notes, plus accrued and unpaid interest. We may not redeem the 2023 Notes prior to the maturity date, and no sinking fund is provided for the 2023 Notes. In accounting for the issuance of the 2023 Notes, we separated the 2023 Notes into liability and equity components. The carrying amount of the liability component of approximately $ 423.4 million was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component of approximately $ 151.6 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The difference between the principal amount of the 2023 Notes and the liability component (the "debt discount") is amortized to interest expense using the effective interest method over the term of the 2023 Notes. The equity component of the 2023 Notes is included in additional paid-in capital in the consolidated balance sheets and is not remeasured as long as it continues to meet the conditions for equity classification. We incurred transaction costs related to the issuance of the 2023 Notes of approximately $ 11.5 million, consisting of an initial purchasers' discount of $ 10.8 million and other issuance costs of approximately $ 0.7 million. In accounting for the transaction costs, we allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the 2023 Notes. Transaction costs attributable to the liability component were approximately $ 8.5 million, recorded as debt issuance costs (presented as contra debt in the consolidated balance sheets), and are being amortized to interest expense over the term of the 2023 Notes. The transaction costs attributable to the equity component were approximately $ 3.0 million and were net with the equity component within stockholders’ equity. The 2023 Notes consisted of the following: As of July 31, 2020 2021 (in thousands) Principal amounts: Principal $ 575,000 $ 575,000 Unamortized debt discount (1) ( 80,298 ) ( 48,616 ) Unamortized debt issuance costs (1) ( 4,480 ) ( 2,713 ) Net carrying amount $ 490,222 $ 523,671 Carrying amount of equity component (2) $ 148,598 $ 148,598 (1) Included in the consolidated balance sheets within "convertible senior notes, net" and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62 %. (2) Included in the consolidated balance sheets within additional paid-in capital, net of $ 3.0 million in equity issuance costs. As of July 31, 2021 , the remaining life of the 2023 Notes was approximately 17 months . The following table sets forth the total interest expense recognized related to the 2023 Notes: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Interest expense related to amortization of debt discount $ 27,764 $ 29,658 $ 31,682 Interest expense related to amortization of debt issuance 1,549 1,654 1,767 Total interest expense $ 29,313 $ 31,312 $ 33,449 Note Hedges and Warrants Concurrently with the offering of the 2023 Notes in January 2018, we entered into convertible note hedge transactions with certain bank counterparties, whereby we have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a conversion price of approximately $ 48.85 per share, subject to adjustment for certain specified events. The total cost of the convertible note hedge transactions was approximately $ 143.2 million. In addition, we sold warrants to certain bank counterparties, whereby the holders of the warrants have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a price of $ 73.46 per share, subject to adjustment for certain specified events. We received approximately $ 88.0 million in cash proceeds from the sale of these warrants. Taken together, the purchase of the convertible note hedges and the sale of warrants are intended to offset any actual dilution from the conversion of the 2023 Notes and to effectively increase the overall conversion price from $ 48.85 to $ 73.46 per share. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded within stockholders’ equity and are not accounted for as derivatives. The net cost incurred in connection with the convertible note hedge and warrant transactions of approximately $ 55.2 million was recorded as a reduction to additional paid-in capital in the consolidated balance sheets as of July 31, 2020 and 2021. The fair value of the note hedges and warrants are not remeasured each reporting period. The amounts paid for the note hedges were tax deductible expenses, while the proceeds received from the warrants were not taxable. Impact to Earnings per Share The 2023 Notes will have no impact on diluted earnings per share ("EPS") until they meet the criteria for conversion, as discussed above, as we intend to settle the principal amount of the 2023 Notes in cash upon conversion. Under the treasury stock method, in periods when we report net income, we are required to include the effect of additional shares that may be issued under the 2023 Notes when the price of our Class A common stock exceeds the conversion price. Under this method, the cumulative dilutive effect of the 2023 Notes would be approximately 3.9 million shares if the average price of our Class A common stock was $ 73.46 . However, upon conversion, there will be no economic dilution from the 2023 Notes, as exercise of the note hedges eliminate any dilution that would have otherwise occurred. The note hedges are required to be excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method. The warrants will have a dilutive effect when the average share price exceeds the warrant strike price of $ 73.46 per share. As the price of our Class A common stock continues to increase above the warrant strike price, additional dilution would occur at a declining rate so that a $10 increase from the warrant strike price would yield a cumulative dilution of approximately 4.9 million diluted shares for EPS purposes. However, upon conversion, the note hedges would neutralize the dilution from the 2023 Notes so that there would only be dilution from the warrants, which would result in an actual dilution of approximately 1.4 million shares at a common stock price of $ 83.46 . 2026 Notes In August 2020, we entered into an investment agreement (the "Investment Agreement") with BCPE Nucleon (DE) SVP, LP, an entity affiliated with Bain Capital, LP ("Bain") relating to the issuance and sale to Bain of $ 750.0 million in aggregate principal amount of the 2026 Notes. The total net proceeds from this offering were approximately $ 723.7 million, after deducting $ 26.3 million of debt issuance costs. The 2026 Notes bear interest at a rate of 2.5 % per annum, with such interest to be paid in kind ("PIK") on the 2026 Notes held by Bain through an increase in the principal amount of the 2026 Notes, and paid in cash on any 2026 Notes transferred to entities that are not affiliated with Bain. Interest on the 2026 Notes will accrue from the date of issuance (September 24, 2020) and be added to the principal amount on a semi-annual basis (March 15 and September 15 of each year, beginning on March 15, 2021). The 2026 Notes mature on September 15, 2026, subject to earlier conversion, redemption or repurchase. Pursuant to the Investment Agreement, and subject to certain exceptions, Bain will be restricted from transferring or entering into an agreement that transfers the economic consequences of ownership of the 2026 Notes or converting the 2026 Notes prior to the earlier of (i) the one-year anniversary of the original issue date of the 2026 Notes or (ii) immediately prior to the consummation of a change of control or entry into a definitive agreement for a transaction that, if consummated, would result in a change of control or fundamental change, as defined in the indenture governing the 2026 Notes. Exceptions to such restrictions on transfer include, among others: (a) transfers to affiliates of Bain, (b) transfers to us or any of our subsidiaries, (c) transfers to a third party where the net proceeds of such sale are solely used to satisfy a margin call or repay a permitted loan, or (d) transfers in connection with certain merger and acquisition events. The 2026 Notes will be convertible into our shares of Class A common stock based on an initial conversion rate of 36.036 shares of common stock per $ 1,000 principal amount of the 2026 Notes, which is equal to an initial conversion price of $ 27.75 per share, subject to customary anti-dilution and other adjustments, including in connection with any make-whole adjustments as a result of certain extraordinary transactions. In September 2021, the one-year anniversary of the 2026 Notes, the conversion price was subject to a one-time adjustment, on a sliding scale in the range of $ 25.25 to $ 27.75 per share based on the level of achievement of certain financial milestones. As a result, in September 2021, the conversion price became fixed at $ 27.75 per share. On or after September 15, 2025, the 2026 Notes will be redeemable by us in the event that the closing sale price of our Class A common stock has been at least 150 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice, for cash, at a redemption price of 100 % of the principal amount of such 2026 Notes, plus any accrued and unpaid interest to, but excluding, the redemption date. With certain exceptions, upon a change of control or a fundamental change, the holders of the 2026 Notes may require us to repurchase all or part of the principal amount of the 2026 Notes at a repurchase price equal to 100 % of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, we will, in certain circumstances, increase the conversion rate for any 2026 Notes converted in connection with a change of control or a fundamental change. In accordance with accounting guidance on embedded conversion features, we valued and bifurcated the conversion option associated with the 2026 Notes from the respective host debt instrument, which is treated as a debt discount, and initially recorded the conversion option of $ 230.9 million as a derivative liability in our consolidated balance sheet, with the corresponding amount recorded as a discount to the 2026 Notes to be amortized over the term of the 2026 Notes using the effective interest method. The 2026 Notes consisted of the following: As of July 31, 2021 (in thousands) Principal amounts: Principal $ 750,000 Non-cash interest expense converted to principal 8,906 Unamortized debt discount (conversion feature) (1) ( 203,619 ) Unamortized debt issuance costs (1) ( 23,264 ) Net carrying amount $ 532,023 (1) Included in the consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05 % . As of July 31, 2021 , the remaining life of the 2026 Notes was approximately 5.1 years. The following table sets forth the total interest expense recognized related to the 2026 Notes: Fiscal Year Ended July 31, 2021 (in thousands) Interest expense related to amortization of debt discount $ 27,291 Interest expense related to amortization of debt issuance costs 3,119 Non-cash interest expense 16,074 Total interest expense $ 46,484 Non-cash interest expense is related to the 2.5 % PIK interest that we accrued from the issuance of the 2026 Notes through July 31, 2021 and was recognized within other expense, net in the consolidated statement of operations and other liabilities–non-current in the consolidated balance sheet. The accrued PIK interest will be converted to the principal balance of the 2026 Notes at each payment date and will be convertible to shares at maturity or when converted. Impact to Earnings per Share The 2026 Notes will have no impact on diluted EPS until the average price of our Class A common stock is greater than the conversion price, discussed above, as we intend to settle the principal amount of the 2026 Notes in cash upon conversion. Under the treasury stock method, in periods when we report net income, we are required to include the effect of additional shares that may be issued under the 2026 Notes when the price of our Class A common stock exceeds the conversion price. During the fiscal year ended July 31, 2021 , the average price of our Class A common stock exceeded the conversion price of the 2026 Notes. However, in periods during which we report a net loss, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive, and the potential impact of the 2026 Notes is therefore excluded. |
Leases
Leases | 12 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Leases | NOTE 6. LEASES We have operating leases for offices, research and development facilities and datacenters and finance leases for certain datacenter equipment. Our leases have remaining lease terms of one year to approximately eight years , some of which include options to renew or terminate. We do not include renewal options in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Our lease agreements do not contain any residual value guarantees or restrictive covenants. Total operating lease cost was $ 39.1 million and $ 42.6 million for the fiscal years ended July 31, 2020 and 2021 , respectively, excluding short-term lease costs, variable lease costs and sublease income, each of which were not material. Variable lease costs primarily include common area maintenance charges. Total lease expense recognized prior to our adoption of ASC 842 was $ 37.0 million for the fiscal year ended July 31, 2019. Total finance lease cost was $ 0.7 million for the fiscal year ended July 31, 2021. We had no finance leases during the fiscal year ended July 31, 2020. During fiscal 2020, we ceased using certain office spaces internationally. As the carrying value of the related right-of-use assets exceeded fair value, we recorded a $ 3.0 million impairment in our consolidated statements of operations for the fiscal year ended July 31, 2020. Of the $ 3.0 million impairment, approximately $ 1.8 million relates to the impairment of our operating lease right-of-use assets and approximately $ 1.2 million relates to the impairment of leasehold improvements. During fiscal 2021, we recorded additional impairment charges related to certain of our international office spaces, as well as an impairment charge related to an office space in the United States. We recorded a $ 1.4 million net impairment in our consolidated statement of operations for the fiscal year ended July 31, 2021. Of the $ 1.4 million impairment, approximately $ 0.5 million relates to the impairment of our operating lease right-of-use assets and approximately $ 0.9 million relates to the impairment of leasehold improvements. Additional charges related to asset impairments may be recorded in the future. Supplemental balance sheet information related to leases is as follows: As of July 31, 2020 2021 (in thousands) Operating leases: Operating lease right-of-use assets, gross $ 159,292 $ 170,277 Accumulated amortization ( 31,966 ) ( 64,374 ) Operating lease right-of-use assets, net $ 127,326 $ 105,903 Operating lease liabilities—current $ 36,569 $ 42,670 Operating lease liabilities—non-current 116,794 86,599 Total operating lease liabilities $ 153,363 $ 129,269 Weighted average remaining lease term (in years): 3.7 3.1 Weighted average discount rate: 5.3 % 5.5 % As of July 31, 2021 (in thousands) Finance leases: Finance lease right-of-use assets, gross (1) $ 8,972 Accumulated amortization (1) ( 687 ) Finance lease right-of-use assets, net (1) $ 8,285 Finance lease liabilities—current (2) $ 1,772 Finance lease liabilities—non-current (3) 6,527 Total finance lease liabilities $ 8,299 Weighted average remaining lease term (in years): 4.7 Weighted average discount rate: 6.7 % (1) Included in the consolidated balance sheets within property and equipment, net. (2) Included in the consolidated balance sheets within accrued expenses and other current liabilities. (3) Included in the consolidated balance sheets within other liabilities—non-current. Supplemental cash flow and other information related to leases is as follows: Fiscal Year Ended July 31, 2020 2021 (in thousands) Cash paid for amounts included in the measurement of Operating cash flows from operating leases $ 42,231 $ 46,216 Financing cash flows from finance leases $ — $ 459 Lease liabilities arising from obtaining right-of-use assets: Operating leases $ 45,278 $ 16,174 Finance leases $ — $ 9,622 The undiscounted cash flows for our operating lease liabilities as of July 31, 2021 were as follows: Fiscal Year Ending July 31: Operating Finance Total (in thousands) 2022 $ 48,701 $ 1,832 $ 50,533 2023 47,131 1,832 48,963 2024 33,265 1,832 35,097 2025 7,603 1,832 9,435 2026 2,542 1,128 3,670 Thereafter 2,616 — 2,616 Total lease payments 141,858 8,456 150,314 Less: imputed interest ( 12,589 ) ( 157 ) ( 12,746 ) Total lease obligation 129,269 8,299 137,568 Less: current lease obligations ( 42,670 ) ( 1,772 ) ( 44,442 ) Long-term lease obligations $ 86,599 $ 6,527 $ 93,126 As of July 31, 2021 , we had additional operating lease commitments of approximately $ 2.5 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during fiscal 2022, with lease terms of approximately two to three years . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7. COMMITMENTS AND CONTINGENCIES Purchase Commitments In the normal course of business, we make commitments with our OEMs to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on performance targets or on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge related to these items when we determine that it is probable a loss will be incurred and we are able to estimate the amount of the loss. Our historical charges have not been material. As of July 31, 2021 , we had up to approximately $ 72.7 million of non-cancelable purchase obligations and other commitments pertaining to our daily business operations, and up to approximately $ 48.0 million in the form of guarantees to certain of our OEMs. Guarantees and Indemnifications We have entered into agreements with some of our Partners and customers that contain indemnification provisions in the event of claims alleging that our products infringe the intellectual property rights of a third party. The scope of such indemnification varies, and may include, in certain cases, the ability to cure the indemnification by modifying or replacing the product at our own expense, requiring the return and refund of the infringing product, procuring the right for the partner and/or customer to continue to use or distribute the product, as applicable, and/or defending the partner or customer against and paying any damages from third-party actions based upon claims of infringement. Other guarantees or indemnification arrangements include guarantees of product and service performance. We have also agreed to indemnify our directors, executive officers and certain other officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair value of liabilities related to indemnifications and guarantee provisions are not material and have not had any material impact on the consolidated financial statements to date. Legal Proceedings Securities Class Actions . Beginning on March 29, 2019, several purported securities class actions were filed in the United States District Court for the Northern District of California against us and two of our officers. The initial complaints generally alleged that the defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. In July 2019, the court consolidated the actions into a single action, and appointed a lead plaintiff, who then filed a consolidated amended complaint (the "Original Complaint"). The action was brought on behalf of those who purchased or otherwise acquired our stock between November 30, 2017 and May 30, 2019, inclusive. The defendants subsequently filed a motion to dismiss the Original Complaint, which the court granted on March 9, 2020, while providing the lead plaintiff leave to amend. On April 17, 2020, the lead plaintiff filed a second amended complaint (the "Current Complaint"), again naming us and two of our officers as defendants. The Current Complaint alleges the same class period, includes many of the same factual allegations as the Original Complaint, and again alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act, as well as SEC Rule 10b-5. The Current Complaint seeks monetary damages in an unspecified amount. On September 11, 2020, the court denied our motion to dismiss the Current Complaint and held that the lead plaintiff adequately stated a claim with respect to certain statements regarding our new customer growth and sales productivity. On January 27, 2021, lead plaintiff, Shimon Hedvat, filed a motion to (i) withdraw as lead plaintiff and (ii) substitute proposed new lead plaintiffs and approve their appointment of a new co-lead counsel. On March 1, 2021, the court granted the lead plaintiff’s motion to withdraw as lead plaintiff but denied without prejudice his motion to substitute proposed new lead plaintiffs. The court also reopened the lead plaintiff selection process, allowing any putative class member interested in serving as the new lead plaintiff to file a lead plaintiff application. Following the lead plaintiff selection hearing on April 28, 2021, on June 10, 2021 the court appointed California Ironworkers Field Pension Trust as lead plaintiff and approved its appointment of counsel. On May 28, 2021, one of the movants for lead plaintiff, John P. Norton on behalf of the Norton Family Living Trust UAD 11/15/2002, filed a separate class action complaint in the Northern District of California on behalf of a class of persons or entities who transacted in publicly traded call options and/or put options on Nutanix stock during the period from November 30, 2017 and May 30, 2019, containing allegations substantively the same as those alleged in the Current Complaint (the "Options Class Action"). On September 8, 2021, the court appointed the Norton Family Living Trust UAD 11/15/2002 as the lead plaintiff in the Options Class Action. The litigation is still in the early stages, and we plan to continue to vigorously defend against the allegations and we are not able to determine what, if any, liabilities will attach to the Current Complaint or the Options Class Action. Shareholder Derivative Actions. Beginning on July 1, 2019, several shareholder derivative complaints were filed in each of the U.S. District Court for the Northern District of California, the Superior Court of California for the County of San Mateo and the Superior Court of California for the County of Santa Clara, naming (i) fourteen of Nutanix’s current and former officers and directors as defendants and (ii) the Company as a nominal defendant. The complaints generally alleged claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment, all based on the same general underlying allegations that are contained in the securities class actions described above. The Superior Court complaints additionally alleged insider trading and violation of California Corporations Code Section 25402, and the Santa Clara County Superior Court complaints further included additional claims for "abuse of control" and "gross mismanagement." In August 2019, the Superior Court of California for the County of Santa Clara consolidated the Santa Clara derivative actions into a single action and, in January 2020, the court stayed the consolidated Santa Clara action in deference to the federal derivative actions described above. On March 8, 2021, pursuant to the parties’ stipulation, the matter was dismissed, and with prejudice with respect to plaintiffs’ standing to pursue derivative claims based on allegations of demand futility. On September 17, 2019, the Superior Court of California for the County of San Mateo granted the plaintiff’s request for voluntary dismissal without prejudice. On January 7, 2020, the U.S. District Court for the Northern District of California consolidated the federal actions and, on March 6, 2020, the plaintiffs filed a stipulation designating a lead plaintiff and deeming the lead plaintiff’s original complaint as the designated complaint in the matter. On April 22, 2020, (i) the individual defendants filed a motion to dismiss the designated complaint on the grounds that it fails to state a claim, and (ii) we filed a motion to dismiss the designated complaint on the grounds that the plaintiffs failed to make a demand on our Board of Directors before filing the designated complaint. In response, the plaintiffs filed an amended complaint on June 17, 2020, which defendants moved to dismiss. On October 5, 2020, the court granted the motions to dismiss the amended complaint, while providing the plaintiffs leave to amend their complaint. In lieu of filing an amended complaint, the stockholders in the federal derivative actions have made a demand on our Board of Directors to investigate the allegations underlying the securities class action matters, and the parties subsequently filed a stipulation with the court to have the federal derivative lawsuit dismissed. On December 22, 2020, pursuant to the parties’ stipulation, the matter was dismissed in toto and with prejudice with respect to plaintiffs’ standing to pursue derivative claims based on allegations of demand futility. We are not currently a party to any other legal proceedings that we believe to be material to our business or financial condition. From time to time, we may become party to various litigation matters and subject to claims that arise in the ordinary course of business. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jul. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 8. STOCKHOLDERS’ EQUITY We have two classes of authorized common stock, Class A common stock and Class B common stock. As of July 31, 2021 , we had one billion shares of Class A common stock authorized, with a par value of $ 0.000025 per share, and 200 million shares of Class B common stock authorized, with a par value of $ 0.000025 per share. As of July 31, 2021 , we had 208.6 million shares of Class A common stock issued and outstanding and 5.6 million shares of Class B common stock issued and outstanding. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Holders of Class B common stock are entitled to 10 votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of our Class A common stock upon a sale or transfer. Shares issued in connection with exercises of stock options, vesting of restricted stock units, or shares purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Shares issued in connection with an exercise of common stock warrants are converted into shares of our Class B common stock. Share Repurchase In August 2020, our Board of Directors authorized the repurchase of up to $ 125.0 million of our Class A common stock. Repurchases were made through open market purchases or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program did not obligate us to acquire any particular amount of our common stock and could have been suspended at any time at our discretion. During the fiscal year ended July 31, 2021 , we repurchased 5.2 million shares of common stock in open market transactions at an average price of $ 24.15 per share, for an aggregate purchase price of $ 125.0 million. As of July 31, 2021 , there is no remaining authorization and the program has expired. Common Stock Reserved for Issuance As of July 31, 2021, we had reserved shares of common stock for future issuance as follows: As of July 31, 2021 (in thousands) Shares reserved for future equity grants 14,501 Shares underlying outstanding stock options 3,334 Shares underlying outstanding restricted stock units 21,708 Shares reserved for future employee stock purchase plan awards 5,189 Total 44,732 |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Jul. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plans | NOTE 9. EQUITY INCENTIVE PLANS Stock Plans We have three equity incentive plans, the 2010 Stock Plan ("2010 Plan"), 2011 Stock Plan ("2011 Plan") and 2016 Equity Incentive Plan ("2016 Plan"). Our stockholders approved the 2016 Plan in March 2016 and it became effective in connection with our initial public offering ("IPO"). As a result, at the time of the IPO, we ceased granting additional stock awards under the 2010 Plan and 2011 Plan and both plans were terminated. Any outstanding stock awards under the 2010 Plan and 2011 Plan will remain outstanding, subject to the terms of the applicable plan and award agreements, until such shares are issued under those stock awards, by exercise of stock options or settlement of RSUs, or until those stock awards become vested or expired by their terms. Under the 2016 Plan, we may grant incentive stock options, non-statutory stock options, restricted stock, RSUs and stock appreciation rights to employees, directors and consultants. We initially reserved 22.4 million shares of our Class A common stock for issuance under the 2016 Plan. The number of shares of Class A common stock available for issuance under the 2016 Plan will also include an annual increase on the first day of each fiscal year, beginning in fiscal 2018, equal to the lesser of: 18.0 million shares, 5 % of the outstanding shares of all classes of common stock as of the last day of our immediately preceding fiscal year, or such other amount as may be determined by the Board. Accordingly, on August 1, 2019 and 2020, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 9.4 million and 10.1 million shares, respectively, pursuant to these provisions. As of July 31, 2021 , we had reserved a total of 39.5 million shares for the issuance of equity awards under the Stock Plans, of which 14.5 million shares were still available for grant. On August 1, 2021, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 10.7 million shares pursuant to the automatic increase provisions. Restricted Stock Units Performance RSUs — We have granted RSUs that have both service and performance conditions to our executives and employees ("Performance RSUs"). Vesting of Performance RSUs is subject to continuous service and the satisfaction of certain performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which both the service condition has been satisfied and it is probable that the performance conditions will be met, the actual vesting and settlement of Performance RSUs are subject to the performance conditions actually being met. Market Stock Units — Due to the departure of our former Chief Executive Officer (“CEO”) in December 2020, the 300,000 RSUs subject to certain market conditions ("MSUs") that were previously granted in October 2018 and December 2019 were forfeited. In connection with his hiring, in December 2020, the Compensation Committee of our Board of Directors approved the grant of 703,117 MSUs to our new CEO. These MSUs have a weighted average grant date fair value per unit of $ 35.69 and will vest up to 133 % based upon the achievement of certain stock price targets over a performance period of approximately 4.0 years, subject to his continuous service on each vesting date. In order to align with the MSUs granted to our new CEO, in December 2020, the Compensation Committee of our Board of Directors modified the vesting conditions for the 75,000 MSUs previously granted to another of our executives. These modified MSUs have a weighted average grant date fair value per unit of $ 27.54 and will vest based upon the achievement of a modified stock price target over the original performance period of approximately 3.9 year s, subject to continuous service on each vesting date. The incremental compensation cost resulting from this modification was not material. We used Monte Carlo simulations to calculate the fair value of these awards on the grant date, or modification date, as applicable. A Monte Carlo simulation requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date corresponding to the length of time remaining in the performance period and expected dividend yield. We recognize stock-based compensation expense related to these MSUs using the graded vesting attribution method over the respective performance periods. As of July 31, 2021 , 423,915 MSUs remained outstanding. Below is a summary of RSU activity, including MSUs, under the Stock Plans: Fiscal Year Ended July 31, 2020 2021 Number of Weighted Number of Weighted (in thousands) (in thousands) Outstanding at beginning of period 22,136 $ 36.72 22,632 $ 32.70 Granted 13,502 $ 27.31 13,732 $ 29.60 Released ( 8,807 ) $ 33.86 ( 9,744 ) $ 32.58 Forfeited ( 4,199 ) $ 34.82 ( 4,912 ) $ 31.87 Outstanding at end of period 22,632 $ 32.70 21,708 $ 30.98 The aggregate grant date fair value of RSUs, including MSUs, vested was $ 262.8 million, $ 298.2 million and $ 317.4 million for the fiscal years ended July 31, 2019, 2020 and 2021, respectively. Stock Options The Board determines the period over which stock options become exercisable and stock options generally vest over a four-year period. Stock options generally expire 10 year s from the date of grant. The term of an ISO grant to a 10% stockholder will not exceed five year s from the date of the grant. The exercise price of an ISO will not be less than 100 % of the estimated fair value of the shares of common stock underlying the stock option (or 110 % of the estimated fair value in the case of an ISO granted to a 10% stockholder) on the date of grant. The exercise price of an NSO is determined by the Board at the time of grant and is generally not less than 100 % of the estimated fair value of the shares of common stock underlying the stock option on the date of grant. Below is a summary of stock option activity under the Stock Plans: Fiscal Year Ended July 31, 2020 2021 Number of Weighted Weighted Aggregate Number of Weighted Weighted Aggregate (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) Outstanding at beginning of period 8,740 $ 5.20 4.6 $ 153,000 7,546 $ 5.10 3.6 $ 129,010 Options granted — $ — — $ — Options exercised ( 1,192 ) $ 5.83 ( 3,712 ) $ 4.07 Options canceled/forfeited ( 2 ) $ 26.21 ( 500 ) $ 12.00 Outstanding at end of period 7,546 $ 5.10 3.6 $ 129,010 3,334 $ 5.20 2.8 $ 102,740 Exercisable at end of period 7,545 $ 5.09 3.7 $ 129,004 3,334 $ 5.20 2.8 $ 102,739 Stock options exercisable as of July 31, 2020 includes 7.0 million vested options and 0.5 million unvested options with an early exercise provision. As of July 31, 2021, there were no unvested options with an early exercise provision. There were no options granted during fiscal 2020 or 2021. The aggregate intrinsic value of stock options exercised during the fiscal years ended July 31, 2019, 2020 and 2021 was $ 90.3 million, $ 23.4 million and $ 90.5 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of our common stock. Cash received from option exercises was $ 12.2 million, $ 6.9 million and $ 15.1 million for the fiscal years ended July 31, 2019, 2020 and 2021 , respectively. The total grant date fair value of stock options vested was $ 4.4 million, $ 1.0 million and $ 0.2 million for the fiscal years ended July 31, 2019, 2020 and 2021, respectively. Employee Stock Purchase Plan In December 2015, the Board adopted the 2016 Employee Stock Purchase Plan, which was subsequently amended in January 2016 and September 2016 and approved by our stockholders in March 2016 ("Original 2016 ESPP"). The Original 2016 ESPP became effective in connection with our IPO. On December 13, 2019, during our 2019 Annual Meeting of Stockholders, our stockholders approved certain amendments to the Original 2016 ESPP. Under the amended and restated 2016 ESPP, the maximum number of shares of Class A common stock available for sale is 11.5 million shares, representing an increase of 9.2 million shares. The 2016 ESPP allows eligible employees to purchase shares of our Class A common stock at a discount through payroll deductions of up to 15 % of eligible compensation, subject to caps of $ 25,000 in any calendar year and 1,000 shares on any purchase date. The 2016 ESPP provides for 1 2-month offering periods, generally beginning in March and September of each year, and each offering period consists of two six-month purchase periods. On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85 % of the lesser of the fair market value of our Class A common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of our Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period. During the fiscal year ended July 31, 2021 , 4.0 million shares of common stock were purchased under the 2016 ESPP for an aggregate amount of $ 50.2 million. As of July 31, 2021 , 5.2 million shares were available for future issuance under the 2016 ESPP. We use the Black-Scholes option pricing model to determine the fair value of shares purchased under the 2016 ESPP with the following weighted average assumptions on the date of grant: Fiscal Year Ended July 31, 2019 2020 2021 Expected term (in years) 0.84 0.92 0.77 Risk-free interest rate 2.5 % 0.1 % 0.1 % Volatility 69.0 % 73.4 % 56.9 % Dividend yield — % — % — % Stock-Based Compensation Total stock-based compensation expense recognized in the consolidated statements of operations is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Cost of revenue: Product $ 3,535 $ 5,334 $ 6,023 Support, entitlements and other services 15,326 22,014 24,460 Sales and marketing 107,751 126,015 122,815 Research and development 140,519 153,252 150,856 General and administrative 39,598 45,383 54,391 Total stock-based compensation expense $ 306,729 $ 351,998 $ 358,545 As of July 31, 2021 , unrecognized stock-based compensation expense related to outstanding stock awards was approximately $ 610.1 million and is expected to be recognized over a weighted average period of approximately 2.5 years . |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Jul. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 10. NET LOSS PER SHARE Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Our Convertible Preferred Stock is considered a participating security. Participating securities do not have a contractual obligation to share in our losses. As such, for the periods we incur net losses, there is no impact on the calculated net loss per share attributable to common stockholders in applying the two-class method. Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to potentially dilutive common stock equivalents outstanding during the period, as their effect would be dilutive. Potentially dilutive common shares include participating securities and shares issuable upon the exercise of stock options, the exercise of common stock warrants, the exercise of convertible preferred stock warrants, the vesting of RSUs and each purchase under the 2016 ESPP, under the treasury stock method. In loss periods, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive and therefore excluded. The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, our undistributed earnings or losses are allocated on a proportionate basis among the holders of both Class A and Class B common stock. As a result, the net income (loss) per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis. The computation of basic and diluted net loss per share attributable to Class A and Class B common stockholders is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands, except per share data) Numerator: Net loss $ ( 621,179 ) $ ( 872,883 ) $ ( 1,034,260 ) Denominator: Weighted average shares—basic and diluted 181,031 194,719 206,475 Net loss per share attributable to common stockholders— $ ( 3.43 ) $ ( 4.48 ) $ ( 5.01 ) The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the fiscal years presented because including them would have been antidilutive are as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Outstanding stock options and RSUs 30,876 30,178 25,042 Employee stock purchase plan 1,659 4,368 2,838 Common stock issuable upon the conversion of convertible debt — — 1,529 Contingently issuable shares pursuant to acquisitions 749 506 253 Common stock warrants 34 — — Total 33,318 35,052 29,662 Shares that will be issued in connection with our stock awards and shares that will be purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Shares issued in connection with an exercise of the common stock warrants are converted into shares of our Class B common stock and are voluntarily convertible into shares of Class A common stock at the option of the holder. Common stock issuable upon the conversion of convertible debt represents the antidilutive impact of the conversion of the 2026 Notes, as the average price of our common stock during the fiscal year ended July 31, 2021 was higher than the conversion price of $ 27.75 . |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11. INCOME TAXES Income Taxes Loss before provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Domestic $ ( 658,938 ) $ ( 905,840 ) $ ( 1,066,307 ) Foreign 45,878 50,619 50,534 Loss before provision for income taxes $ ( 613,060 ) $ ( 855,221 ) $ ( 1,015,773 ) Provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Current: U.S. federal $ ( 1,998 ) $ 175 $ 9 State and local 312 79 99 Foreign 17,270 18,033 21,801 Total current taxes 15,584 18,287 21,909 Deferred: U.S. federal ( 4,949 ) 80 24 State and local ( 770 ) — — Foreign ( 1,746 ) ( 705 ) ( 3,446 ) Total deferred taxes ( 7,465 ) ( 625 ) ( 3,422 ) Provision for income taxes $ 8,119 $ 17,662 $ 18,487 The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory income tax rate of 21 % to pre-tax loss. The reconciliation of the statutory federal income tax and our effective income tax is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) U.S. federal income tax at statutory rate $ ( 128,680 ) $ ( 179,514 ) $ ( 213,391 ) Change in valuation allowance 142,273 145,244 156,576 Non-deductible item on fair value remeasurement of — — 56,546 Stock-based compensation ( 23,378 ) 30,913 4,663 Effect of foreign operations 14,305 12,676 9,851 Non-deductible expenses 4,651 5,393 1,739 Change in unrecognized tax benefit 727 1,709 2,550 State income taxes ( 458 ) 79 99 Transfer pricing adjustments ( 3 ) 7 — Intangible asset migration ( 2,027 ) — — Other 709 1,155 ( 146 ) Total $ 8,119 $ 17,662 $ 18,487 During the fiscal year ended July 31, 2019, our provision for income taxes was primarily attributable to foreign tax provisions in certain foreign jurisdictions in which we conduct business, partially offset by a partial valuation release in the U.S. due to an acquisition completed during fiscal 2019 and a tax benefit related to the change in tax law. During the fiscal years ended July 31, 2020 and 2021, our provision for income taxes was primarily attributable to foreign tax provisions in certain foreign jurisdictions in which we conduct business. The temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of July 31, 2020 2021 (in thousands) Deferred tax assets: Net operating loss carryforward $ 412,110 $ 573,944 Deferred revenue 122,236 168,417 Tax credit carryforward 152,330 164,984 Leases 48,270 40,011 Intangible assets 31,119 28,557 Accruals and reserves 13,401 21,727 Stock-based compensation 24,177 18,957 Property and equipment 2,234 3,385 Other assets 29,022 41,886 Total deferred tax assets 834,899 1,061,868 Deferred tax liabilities: Deferred commission expense ( 50,344 ) ( 83,054 ) Leases ( 44,502 ) ( 38,368 ) Acquisition-related ( 8,003 ) ( 4,633 ) Property and equipment ( 5,629 ) ( 3,681 ) Prepaid expenses ( 2,140 ) ( 2,013 ) Foreign branch taxes ( 5,175 ) ( 1,806 ) Other ( 1,991 ) ( 1,204 ) Total deferred tax liabilities ( 117,784 ) ( 134,759 ) Valuation allowance ( 712,093 ) ( 918,689 ) Net deferred tax assets $ 5,022 $ 8,420 Management believes that based on available evidence, both positive and negative, it is more likely than not that the U.S. deferred tax assets will not be utilized and as such, a full valuation allowance has been recorded. The valuation allowance for deferred tax assets was $ 918.7 million as of July 31, 2021. The net increase in the total valuation allowance for the fiscal years ended July 31, 2020 and 2021 was $ 202.3 million and $ 206.6 million, respectively. As of July 31, 2021 , we had approximately $ 2.6 billion of federal net operating loss carryforwards and $ 1.7 billion of state net operating loss carryforwards available to reduce future taxable income, which will begin to expire in fiscal 2029. In addition, we had approximately $ 113.5 million of federal research credit carryforwards, $ 82.3 million of state research credit carryforwards and $ 12.1 million of foreign tax credit carryforwards. The federal credits will begin to expire in fiscal 2030 and the state credits can be carried forward indefinitely. The foreign credits will begin to expire in fiscal 2027. Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. Any annual limitation may result in the expiration of net operating losses and credits before utilization. If an ownership change occurred, utilization of the net operating loss and tax credit carryforwards could be significantly reduced. As of July 31, 2021 , we held an aggregate of $ 164.3 million in cash and cash equivalents in our foreign subsidiaries, of which $ 87.4 million was denominated in U.S. dollars. We attribute net revenue, costs and expenses to domestic and foreign components based on the terms of our agreements with our subsidiaries. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries, as such earnings are to be reinvested offshore indefinitely. The income tax liability would be insignificant if these earnings were to be repatriated. The income tax benefit and provision for the fiscal year ended July 31, 2021 are based on the assumption that foreign undistributed earnings are indefinitely reinvested. We will continue to evaluate whether or not to continue to assert indefinite reinvestment on part or all of our foreign undistributed earnings. In the event we determine not to continue to assert the permanent reinvestment of part or all of our foreign undistributed earnings, such a determination could result in the accrual and payment of additional foreign, state and local taxes. We recognize uncertain tax positions in our financial statements if that position will more likely than not be sustained on audit, based on the technical merits of the position. A reconciliation of our unrecognized tax benefits, excluding accrued interest and penalties, is as follows: Fiscal Year Ended July 31, 2020 2021 (in thousands) Balance at the beginning of the year $ 81,250 $ 85,257 Increases related to current year tax positions 3,897 4,335 Increases related to prior year tax positions 491 328 Decreases related to prior year tax positions ( 381 ) — Other — ( 145 ) Balance at the end of the year $ 85,257 $ 89,775 During the fiscal year ended July 31, 2021, the net increase in unrecognized tax positions was primarily attributable to federal and state research and development credits and intercompany charges. As of July 31, 2021 , if uncertain tax positions are fully recognized in the future, it would result in a $ 15.5 million impact to our effective tax rate, primarily relating to positions in foreign jurisdictions, and the remaining amount would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance. We recognize interest and/or penalties related to income tax matters as a component of income tax expense. As of July 31, 2021 , we had recognized $ 4.8 million of accrued interest and penalties related to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction as well as various U.S. states and foreign jurisdictions. The tax years 2009 and forward remain open to examination by the major jurisdictions in which we are subject to tax. These fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. We are subject to the continuous examination of income tax returns by various tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the provision for income taxes. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations. We do not anticipate a significant impact to the gross unrecognized tax benefits within the next 12 months related to these years. |
Segment Information
Segment Information | 12 Months Ended |
Jul. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12. SEGMENT INFORMATION Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we have a single reportable segment. The following table sets forth revenue by geographic location based on bill-to location: Fiscal Year Ended July 3 1 , 2019 2020 2021 (in thousands) U.S. $ 682,340 $ 706,110 $ 758,128 Europe, the Middle East and Africa 238,356 277,489 320,837 Asia Pacific 271,712 265,092 260,637 Other Americas 43,735 58,991 54,762 Total revenue $ 1,236,143 $ 1,307,682 $ 1,394,364 The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location: As of July 31, 2020 2021 (in thousands) United States $ 136,721 $ 86,468 International 55,808 45,152 Total long-lived assets $ 192,529 $ 131,620 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13. SUB SEQUENT EVENTS Exchange and Subscription Transactions for 0.25% Convertible Senior Notes Due 2027 On September 15, 2021, we announced that we entered into privately negotiated exchange and/or subscription agreements with certain holders of the 2023 Notes and certain new investors pursuant to which we will issue $ 575 million principal amount of 0.25% convertible senior notes due 2027 (the "2027 Notes") consisting of (i) approximately $ 477.3 million principal amount of 2027 Notes in exchange for approximately $ 416.5 million principal amount of the 2023 Notes (the "Exchange Transactions") and (ii) approximately $ 97.7 million principal amount of 2027 Notes for cash (the "Subscription Transactions"). We also entered into privately negotiated transactions with certain holders of the 2023 Notes pursuant to which we will repurchase approximately $ 12.8 million principal amount of the 2023 Notes for cash (the "Note Repurchases"). Following the closing of the Exchange Transactions and the Note Repurchases, approximately $ 145.7 million in aggregate principal amount of 2023 Notes will remain outstanding with terms unchanged. The Exchange Transactions, the Subscription Transactions and the Note Repurchases are expected to close concurrently on or about September 22, 2021, subject to customary closing conditions. We will not receive any cash proceeds from the Exchange Transactions. In exchange for issuing the balance of the 2027 Notes pursuant to the Exchange Transactions, we will receive and cancel the exchanged 2023 Notes. We estimate that net cash proceeds from the Subscription Transactions will be approximately $ 88.4 million after deducting estimated offering expenses for both the Exchange Transactions and the Subscription Transactions. We intend to use (i) approximately $ 14.7 million of the net cash proceeds from the Subscription Transactions for the Note Repurchases and (ii) approximately $ 58.5 million of the net cash proceeds from the Subscription Transactions to repurchase approximately 1.4 million shares of our Class A common stock. The exchange of $ 416.5 million in principal amount of the 2023 Notes is currently expected to result in the recognition of a loss on the extinguishment of debt instead of a debt modification. We are continuing to evaluate the accounting treatment of the exchange, which is expected to have a material impact on our consolidated financial statements. Bond Hedge and Warrant Unwind Transactions In connection with the Exchange Transactions and the Note Repurchases, we have agreed to terminate corresponding portions of the convertible note hedge and warrant transactions we previously entered into with certain financial institutions in connection with the issuance of the 2023 Notes. |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of Nutanix, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such management estimates and assumptions include, but are not limited to, the best estimate of selling prices for products and related support; useful lives and recoverability of intangible assets and property and equipment; allowance for credit losses; determination of fair value of stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; purchase commitment liabilities to our OEMs; sales commissions expense and the period of benefit for deferred commissions; whether an arrangement is or contains a lease; the incremental borrowing rate to measure the present value of right-of-use assets and lease liabilities; the inputs used to determine the fair value of the contingent liability associated with the conversion feature of the 2.50% convertible senior notes due 2026; and contingencies and litigation. Management evaluates these estimates and assumptions on an ongoing basis using historical experience and other factors and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions. In response to the ongoing and rapidly evolving COVID-19 pandemic, we considered the impact of the estimated economic implications on our critical and significant accounting estimates, including assessment of collectibility of customer contracts, valuation of accounts receivable, provision for purchase commitments to our OEMs and impairment of long-lived assets, right-of-use assets, and deferred commissions. |
Concentration of Risk | Concentration of Risk Credit Risk —Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. We invest only in high-quality credit instruments and maintain our cash and cash equivalents and available-for-sale investments in fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Our deposits are with multiple institutions, however such deposits may exceed federally insured limits. We provide credit, in the normal course of business, to a number of companies and perform credit evaluations of our customers. Concentration of Revenue and Accounts Receivable — We sell our products primarily through our Partners and occasionally directly to end customers. For the fiscal years ended July 31, 2019, 2020 and 2021, no end customer accounted for more than 10% of total revenue or accounts receivable. For each significant Partner, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable Fiscal Year Ended July 31, as of July 31, Partners 2019 2020 2021 2020 2021 Partner A 24 % 29 % 32 % 33 % 35 % Partner B 13 % 14 % 15 % 16 % 23 % Partner C 10 % (1) 10 % (1) (1) Partner D 10 % (1) (1) (1) (1) (1) Less than 10% |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments We classify all highly liquid investments with original maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate such designation as of each balance sheet date. We classify and account for our marketable securities as available-for-sale securities. We classify our marketable securities with stated maturities greater than twelve months as short-term investments due to our intent and ability to use these securities to support our current operations. Our marketable securities are recorded at their estimated fair value. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income (loss). We periodically review whether our securities may be other-than-temporarily impaired, including whether or not (i) we have the intent to sell the security or (ii) it is more likely than not that we will be required to sell the security before its anticipated recovery. If one of these factors is met, we will record an impairment loss associated with our impaired investment. The impairment loss will be recorded as a write-down of investments in the consolidated balance sheets and a realized loss within other expense in the consolidated statements of operations. |
Fair Value Measurement | Fair Value Measurement We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which to transact and the market-based risk. We apply fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The fair value of the 0 % convertible senior notes, due 2023, (the "2023 Notes") is determined based on the closing trading price per $ 100 of the 2023 Notes as of the last day of trading for the period. The fair value of the 2.50 % convertible senior notes, due 2026, (the "2026 Notes") is determined based on a binomial model. |
Derivative Liability | Derivative Liability We evaluate convertible notes or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity. The result of this accounting guidance could result in the fair value of a financial instrument being classified as a derivative instrument and recorded at fair market value at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statements of operations as other income or other expense. Once the criteria for conversion is fixed, the derivative instrument is marked to fair value and reclassified to equity. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. Credit is extended to customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for credit losses. The allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. We assess credit losses on accounts receivable by taking into consideration past collection experience, the credit quality of the customer, the age of the receivable balance, current and future economic conditions, and forecasts that may affect the collectibility of the reported amount. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record an allowance for credit losses in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we record an allowance for credit losses based on the length of time the receivable is past due and our historical experience of collections and write-offs. The changes in the allowance for credit losses are as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Allowance for credit losses—beginning balance $ 815 $ 379 $ 804 Charged to allowance for credit losses 437 822 655 Recoveries ( 290 ) ( 22 ) ( 286 ) Write-offs ( 583 ) ( 375 ) ( 281 ) Allowance for credit losses—ending balance $ 379 $ 804 $ 892 |
Property and Equipment | Property and Equipment Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. We include the cost to acquire demonstration units and the related accumulated depreciation in property and equipment as such units are generally not available for sale. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. |
Leases | Leases We determine if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date when the leased assets are made available for our use. Operating leases are included in operating lease right-of-use assets, operating lease liabilities—current and operating lease liabilities—non-current in our consolidated balance sheet as of July 31, 2021. Finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other liabilities—non-current in our consolidated balance sheet as of July 31, 2021. Right-of-use assets ("ROU assets") represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of fixed payments under the arrangement, less any lease incentives, such as rent holidays. Variable lease payments not dependent on an index or a rate are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance, property taxes and utilities. We use an estimate of our incremental borrowing rate ("IBR") based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, we consider information including, but not limited to, our credit rating, the lease term and the currency in which the arrangement is denominated. For leases which commenced prior to our adoption of Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842"), we used the IBR as of August 1, 2019. Our lease terms may include renewal options, which are not included in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Lease costs are recognized on a straight-line basis as operating expenses within our consolidated statements of operations. We present lease payments within cash flows from operations within the consolidated statements of cash flows. For our operating leases, we elected to account for lease and non-lease components as a single lease component. Additionally, we do not record leases on the consolidated balance sheet that have a lease term of 12 months or less at the lease commencement date. |
Business Combinations | Business Combinations We account for our acquisitions using the acquisition method. Goodwill is measured at the acquisition date as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. Significant estimates and assumptions are made by management to value such assets and liabilities. Although we believe that those estimates and assumptions are reasonable and appropriate, they are inherently uncertain and subject to refinement. Additional information related to the acquisition date fair value of acquired assets and assumed liabilities obtained during the measurement period, not to exceed one year, may result in changes to the recorded values of such assets and liabilities, resulting in an offsetting adjustment to the goodwill associated with the business acquired. Uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly. We will record any adjustments to our preliminary estimates to goodwill, provided that it is within the one-year measurement period. Any contingent consideration payable is recognized at fair value at the acquisition date. Liability-classified contingent consideration is remeasured each reporting period, with changes in fair value recognized in earnings until the contingent consideration is settled. Acquisition related costs incurred in connection with a business combination, other than those associated with the issuance of debt or equity securities, are expensed as incurred. |
Goodwill, Intangible Assets and Other Long-Lived Assets | Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that are not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, customer relationships and trade names, resulting from business combinations. Finite-lived intangible assets are recorded at fair value, net of accumulated amortization. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense is included as a component of cost of product revenue and sales and marketing expense in the accompanying consolidated statements of operations. Amounts included in sales and marketing expense relate to customer relationships. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually, as of May 1 of each year. Such goodwill and other intangible assets may also be tested for impairment between annual tests in the presence of impairment indicators such as, but not limited to: (i) a significant adverse change in legal factors or in the business climate; (ii) a substantial decline in our market capitalization; (iii) an adverse action or assessment by a regulator; (iv) unanticipated competition; (v) loss of key personnel; (vi) a more likely-than-not expectation of the sale or disposal of a reporting unit or a significant portion thereof; (vii) a realignment of our resources or restructuring of our existing businesses in response to changes to industry and market conditions; (viii) testing for recoverability of a significant asset group within a reporting unit; or (ix) a higher discount rate used in the impairment analysis as impacted by an increase in interest rates. Goodwill is tested for impairment by comparing the reporting unit's carrying value, including goodwill, to the fair value of the reporting unit. We operate under one reporting unit and for our annual goodwill impairment test, we determine the fair value of our reporting unit based on our enterprise value. We may elect to utilize a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying value, an impairment analysis will be performed. We compare the fair value of our reporting unit with its carrying amount and if the carrying value of the reporting unit exceeds its fair value, an impairment loss will be recognized. Long-lived assets, such as property and equipment and finite-lived intangible assets subject to depreciation and amortization, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Among the factors and circumstances we consider in determining recoverability are: (i) a significant decrease in the market price of a long-lived asset; (ii) a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition; and (v) current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. There have been no indicators of impairment of goodwill, intangible assets or other long-lived assets and we did not record any material impairment losses during fiscal 2019, 2020 or 2021 . |
Revenue Recognition | Revenue Recognition The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach: • Identification of the contract, or contracts, with a customer — A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. • Identification of the performance obligations in the contract — Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or services either on their own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. • Determination of the transaction price — The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. • Allocation of the transaction price to the performance obligations in the contract — If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP"). We determine SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, we estimate the SSP, taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. • Recognition of revenue when, or as, performance obligations are satisfied — We satisfy performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied with the transfer of a promised good or service to a customer. For additional details on revenue recognition, refer to Note 2 of Notes to Consolidated Financial Statements. Contracts with multiple performance obligations — The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price SSP basis. For deliverables that we routinely sell separately, such as software entitlement and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months. For those that are not sold routinely, we determine SSP based on our overall pricing trends and objectives, taking into consideration market conditions and other factors, including the value of our contracts, the products sold and geographic locations. Contract balances — The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period we deliver goods or provide services, or when our right to consideration is unconditional. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. Unbilled accounts receivable, included in accounts receivable, net on the consolidated balance sheets, was not material for any of the periods presented. Payment terms on invoiced amounts are typically 30-45 days. The balance of accounts receivable, net of allowance for credit losses, as of July 31, 2020 and 2021 is presented in the accompanying consolidated balance sheets. Costs to obtain and fulfill a contract — We capitalize commissions paid to sales personnel and the related payroll taxes when customer contracts are signed. These costs are recorded as deferred commissions in the consolidated balance sheets, current and non-current. We determine whether costs should be deferred based on our sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Commissions paid upon the initial acquisition of a contract are recognized over the estimated period of benefit, which may exceed the term of the initial contract if the commissions expected to be paid upon renewal are not commensurate with that of the initial contract. Accordingly, deferred costs are recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation over the entire period of benefit and included in sales and marketing expense in the consolidated statements of operations. We determine the estimated period of benefit by evaluating the expected renewals of customer contracts, the duration of relationships with our customers, customer retention data, our technology development lifecycle and other factors. Deferred costs are periodically reviewed for impairment. Effective August 1, 2020, we changed our sales compensation plans such that commissions paid on subscription software license renewals are not commensurate with commissions paid on the initial contract. Accordingly, commissions paid on initial sales of subscription software licenses are now being recognized in a pattern consistent with the revenue recognition for each performance obligation, including those we expect upon renewal, over the entire period of benefit, rather than only the term of the initial contract, thus resulting in less expense being recognized in the initial contract period. Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our consolidated statements of operations. Deferred revenue — Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and primarily pertain to software entitlement and support subscriptions and professional services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date. Cost of Revenue Cost of revenue consists of cost of product revenue and cost of support, entitlements and other services revenue. Personnel costs associated with our operations and global customer support organizations consist of salaries, benefits and stock-based compensation. Allocated costs consist of certain facilities, depreciation and amortization, recruiting and information technology costs allocated based on headcount. |
Warranties | Warranties We generally provide a one-year warranty on hardware sold by us and a 90-day warranty on software licenses. The hardware warranty provides for parts replacement for defective components and the software warranty provides for bug fixes. With respect to the hardware warranty obligation, we have a warranty agreement with our contract manufacturers under which the OEMs are generally required to replace defective hardware within three years of shipment. Furthermore, our post-contract customer support ("PCS") agreements provide for the same parts replacement that customers are entitled to under the warranty program, except that replacement parts are delivered according to targeted response times to minimize disruption to the customers’ critical business applications. Substantially all customers purchase PCS agreements. Given the warranty agreement with our OEMs and considering that substantially all products are sold together with PCS agreements, we generally have very limited exposure related to warranty costs and therefore no warranty reserve has been recognized. |
Research and Development | Research and Development Our research and development expense consists primarily of product development personnel costs, including salaries and benefits, stock-based compensation and allocated facilities costs. Research and development costs are expensed as incurred. Currently, we expense the software development costs incurred in the research and development of new products and enhancements to existing products as incurred, as from the inception of the product development, our software products are primarily intended to be marketed and sold to customers on-premises, either standalone and/or with other product offerings. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured based on the grant date fair value of share-based awards. The fair value of the purchase rights under our 2016 Employee Stock Purchase Plan ("2016 ESPP") is estimated using the Black-Scholes-Merton ("Black-Scholes") option pricing model, which is impacted by the fair value of our common stock, as well as changes in assumptions regarding a number of subjective variables. These variables include the expected common stock price volatility over the term of the awards, the expected term of the awards, risk-free interest rates and expected dividend yield. The fair value of restricted stock units ("RSUs") is determined using the fair value of our common stock on the date of grant. We grant stock awards with service conditions only and with both service and performance or market-based conditions. We recognize stock-based compensation expense for employee stock awards with a service condition only using the straight-line method over the requisite service period of the awards, which is generally the vesting period. We use the graded vesting attribution method to recognize stock-based compensation expense related to employee stock awards that contain both service and performance or market-based conditions. The fair value of the 2016 ESPP purchase rights is recognized as expense on a straight-line basis over the offering period. We account for forfeitures of all share-based awards when they occur. |
Foreign Currency | Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Transactions denominated in currencies other than the functional currency are remeasured at the average exchange rate in effect during the reporting period. At the end of each reporting period all monetary assets and liabilities of our subsidiaries are remeasured at the current U.S. dollar exchange rate at the end of the reporting period. Remeasurement gains and losses are included within other expense, net in the accompanying consolidated statements of operations. During the fiscal years ended July 31, 2019, 2020 and 2021 , we recognized foreign currency losses of $ 2.5 million, $ 9.4 million and $ 8.9 million, respectively. To date, we have not undertaken any hedging transactions related to foreign currency exposure. |
Segments | Segments Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance on amounts that are more likely than not to be realized. We record a liability for uncertain tax positions if it is not more likely than not to be sustained based solely on its technical merits as of the reporting date. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately anticipate actual outcomes. |
Advertising Costs | Advertising Costs Advertising costs are charged to sales and marketing expenses as incurred in the consolidated statements of operations. During the fiscal years ended July 31, 2019, 2020 and 2021 , advertising expense was $ 26.7 million, $ 38.7 million and $ 22.1 million, respectively. |
Recently Issued and Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. We adopted this new standard effective August 1, 2020 and the adoption did not have a material impact on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB's disclosure framework project. We adopted this new standard effective August 1, 2020 and the adoption did not have a material impact on our quarterly or annual disclosures. Recently Issued and Not Yet Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06 the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate. ASU 2020-06 also provides for certain disclosures with regard to convertible instruments and associated fair values. ASU 2020-06 is effective for us in the first quarter of fiscal 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. ASU 2020-06 provides companies with the option to adopt the new standard using either the full retrospective or modified retrospective method. We will early adopt this new guidance using the modified retrospective method as of August 1, 2021 . The adoption of this new guidance is estimated to result in an increase in the carrying value of the 2023 Notes by approximately $ 48.0 million to reflect the full principal amount of the convertible notes outstanding, net of issuance costs, a decrease in additional paid-in capital of approximately $ 148.6 million to remove the equity component separately recorded for the conversion feature associated with the 2023 Notes, and a cumulative-effect adjustment of approximately $ 100.6 million to the beginning balance of our accumulated deficit as of August 1, 2021 . The adoption of this new guidance is expected to reduce non-cash interest expense for the fiscal year ending July 31, 2022 and until the 2023 Notes have been settled. The remaining debt issuance costs will continue to be amortized. Additionally, as a result of our adoption of ASU 2020-06, upon the conversion price of the 2026 Notes becoming fixed in September 2021, the embedded conversion option for the 2026 Notes will no longer require bifurcation. At that time, the carrying amount of the derivative liability will be reclassified to shareholders’ deficit within the consolidated balance sheet. The remaining debt discount that arose from the original bifurcation will continue to be amortized over the term of the notes. |
Overview and Summary of Signi_3
Overview and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Revenue and Accounts Receivable | For each significant Partner, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable Fiscal Year Ended July 31, as of July 31, Partners 2019 2020 2021 2020 2021 Partner A 24 % 29 % 32 % 33 % 35 % Partner B 13 % 14 % 15 % 16 % 23 % Partner C 10 % (1) 10 % (1) (1) Partner D 10 % (1) (1) (1) (1) (1) Less than 10% |
Schedule of Changes in Allowance for Credit Losses | The changes in the allowance for credit losses are as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Allowance for credit losses—beginning balance $ 815 $ 379 $ 804 Charged to allowance for credit losses 437 822 655 Recoveries ( 290 ) ( 22 ) ( 286 ) Write-offs ( 583 ) ( 375 ) ( 281 ) Allowance for credit losses—ending balance $ 379 $ 804 $ 892 |
Revenue, Deferred Revenue and_2
Revenue, Deferred Revenue and Deferred Commissions (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue by Arrangement, Disclosure | The following table depicts the disaggregation of revenue by revenue type, consistent with how we evaluate our financial performance: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Subscription $ 648,415 $ 1,030,180 $ 1,243,621 Non-portable software 449,131 208,158 71,390 Hardware 105,321 23,455 6,259 Professional services 33,276 45,889 73,094 Total revenue $ 1,236,143 $ 1,307,682 $ 1,394,364 |
Deferred Revenue, by Arrangement, Disclosure | Significant changes in the balance of deferred revenue (contract liability) and deferred commissions (contract asset) for the periods presented are as follows: Deferred Deferred (in thousands) Balance as of July 31, 2019 $ 910,044 $ 153,712 Additions 815,257 233,917 Revenue/commissions recognized ( 541,860 ) ( 172,101 ) Balance as of July 31, 2020 1,183,441 215,528 Additions 818,042 310,966 Revenue/commissions recognized ( 688,560 ) ( 183,074 ) Balance as of July 31, 2021 $ 1,312,923 $ 343,420 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured on Recurring Basis | The fair value of our financial assets and liabilities measured on a recurring basis is as follows: As of July 31, 2020 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 142,936 $ — $ — $ 142,936 Commercial paper — 8,999 — 8,999 Short-term investments: Corporate bonds — 345,265 — 345,265 Commercial paper — 29,702 — 29,702 U.S. government securities — 26,074 — 26,074 Total measured at fair value $ 142,936 $ 410,040 $ — $ 552,976 Cash 166,802 Total cash, cash equivalents and short-term $ 719,778 As of July 31, 2021 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 72,583 $ — $ — $ 72,583 Commercial paper — 29,997 — 29,997 Corporate bonds — 2,002 — 2,002 Short-term investments: Corporate bonds — 513,688 — 513,688 Commercial paper — 347,088 — 347,088 U.S. Government securities — 67,230 — 67,230 Total measured at fair value $ 72,583 $ 960,005 $ — $ 1,032,588 Cash 181,141 Total cash, cash equivalents and short-term $ 1,213,729 The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows: As of July 31, 2020 As of July 31, 2021 Carrying Estimated Carrying Estimated (in thousands) 2023 Notes $ 490,222 $ 529,385 $ 523,671 $ 602,272 2026 Notes — — 532,023 1,128,953 Total $ 490,222 $ 529,385 $ 1,055,694 $ 1,731,225 |
Schedule of Derivative Liabilities at Fair Value | The following table shows the estimated fair value of the derivative liability as of the issuance of the 2026 Notes and the change in fair value from issuance through July 31, 2021: Fiscal Year Ended (in thousands) Derivative liability at issuance of the 2026 Notes $ 230,910 Change in fair value 269,265 Derivative liability, end of period $ 500,175 |
Fair Value Measurement Inputs and Valuation Techniques | We estimated the fair value of the derivative liability using a binomial model, with the following valuation inputs: As of September 24, 2020 July 31, 2021 Conversion ratio (1) Conversion price of $ 26.63 with a 37.552 conversion rate per $1,000 Conversion price of $ 27.75 with a 36.036 conversion rate per $1,000 Risk-free rate 0.4 % 0.7 % Discount rate (2) 9.0 % 6.5 % Volatility 42.7 % 40.0 % Stock price $ 21.26 $ 36.02 (1) The conversion ratio was estimated based on the latest forecast of the associated financial performance metric. (2) The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Investments in Marketable Debt Securities, by Contractual Maturity Date | The following table summarizes the estimated fair value of our investments in marketable debt securities by their contractual maturity dates: As of (in thousands) Due within one year $ 772,853 Due in one to two years 155,153 Total $ 928,006 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consists of the following: As of July 31, 2020 2021 (in thousands) Prepaid operating expenses $ 31,690 $ 36,455 VAT receivables 8,381 8,290 Tenant improvement allowance receivables 8,557 — Other current assets 14,404 12,071 Total prepaid expenses and other current assets $ 63,032 $ 56,816 |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following: Estimated As of July 31, Useful Life 2020 2021 (in months) (in thousands) Computer, production, engineering and other equipment 36 $ 245,245 $ 300,583 Demonstration units 12 66,569 68,992 Leasehold improvements (1) 65,557 62,676 Furniture and fixtures 60 17,026 16,518 Total property and equipment, gross 394,397 448,769 Less: accumulated depreciation (2) ( 251,225 ) ( 317,148 ) Total property and equipment, net $ 143,172 $ 131,621 (1) Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. (2) Includes a $ 1.2 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2020 and a $ 0.9 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2021. For additional information on these lease-related impairments, refer to Note 6. |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consists of the following: As of July 31, 2020 2021 (in thousands) Developed technology $ 79,300 $ 79,300 Customer relationships 8,860 8,860 Trade name 4,170 4,170 Total intangible assets, gross 92,330 92,330 Less: Accumulated amortization of developed technology ( 35,987 ) ( 50,764 ) Accumulated amortization of customer relationships ( 4,953 ) ( 6,513 ) Accumulated amortization of trade name ( 1,998 ) ( 3,041 ) Total accumulated amortization ( 42,938 ) ( 60,318 ) Total intangible assets, net $ 49,392 $ 32,012 Amortization expense related to our intangible assets is being recognized in the consolidated statements of operations within product cost of revenue for developed technology and sales and marketing expense for customer relationships and trade name. The changes in the net book value of intangible assets, net are as follows: As of July 31, 2020 2021 (in thousands) Intangible assets, net—beginning balance $ 66,773 $ 49,392 Amortization of intangible assets (1) ( 17,381 ) ( 17,380 ) Intangible assets, net—ending balance $ 49,392 $ 32,012 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense of our intangible assets is as follows: Fiscal Year Ending July 31: Amount (in thousands) 2022 $ 16,183 2023 10,856 2024 3,210 2025 1,763 Total $ 32,012 |
Schedule of Goodwill | The changes in the carrying amount of goodwill are as follows: Carrying Amount (in thousands) Balance at July 31, 2019 $ 185,180 Other 80 Balance at July 31, 2020 185,260 Balance at July 31, 2021 $ 185,260 |
Schedule of Accrued Liabilities | Accrued Compensation and Benefits Accrued compensation and benefits consists of the following: As of July 31, 2020 2021 (in thousands) Accrued commissions $ 33,503 $ 48,321 Accrued vacation 24,006 26,961 Contributions to ESPP withheld 16,563 26,735 Payroll taxes payable 10,742 21,603 Accrued bonus 5,568 14,878 Accrued benefits 8,426 10,243 Other 10,301 13,596 Total accrued compensation and benefits $ 109,109 $ 162,337 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consists of the following: As of July 31, 2020 2021 (in thousands) Income taxes payable $ 9,703 $ 13,309 Accrued professional services 3,006 3,541 Other 13,215 22,554 Total accrued expenses and other current liabilities $ 25,924 $ 39,404 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Debt Instrument [Line Items] | |
Net Proceeds from Notes | The total net proceeds from the 2023 Notes are as follows: Amount (in thousands) Principal amount $ 575,000 Less: initial purchasers' discount ( 10,781 ) Less: cost of the bond hedges ( 143,175 ) Add: proceeds from the sale of warrants 87,975 Less: other issuance costs ( 707 ) Net proceeds $ 508,312 |
2023 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Components of Notes | The 2023 Notes consisted of the following: As of July 31, 2020 2021 (in thousands) Principal amounts: Principal $ 575,000 $ 575,000 Unamortized debt discount (1) ( 80,298 ) ( 48,616 ) Unamortized debt issuance costs (1) ( 4,480 ) ( 2,713 ) Net carrying amount $ 490,222 $ 523,671 Carrying amount of equity component (2) $ 148,598 $ 148,598 (1) Included in the consolidated balance sheets within "convertible senior notes, net" and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62 %. (2) Included in the consolidated balance sheets within additional paid-in capital, net of $ 3.0 million in equity issuance costs. |
Interest Expense Recognized | The following table sets forth the total interest expense recognized related to the 2023 Notes: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Interest expense related to amortization of debt discount $ 27,764 $ 29,658 $ 31,682 Interest expense related to amortization of debt issuance 1,549 1,654 1,767 Total interest expense $ 29,313 $ 31,312 $ 33,449 |
2026 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Components of Notes | The 2026 Notes consisted of the following: As of July 31, 2021 (in thousands) Principal amounts: Principal $ 750,000 Non-cash interest expense converted to principal 8,906 Unamortized debt discount (conversion feature) (1) ( 203,619 ) Unamortized debt issuance costs (1) ( 23,264 ) Net carrying amount $ 532,023 (1) Included in the consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05 % . |
Interest Expense Recognized | The following table sets forth the total interest expense recognized related to the 2026 Notes: Fiscal Year Ended July 31, 2021 (in thousands) Interest expense related to amortization of debt discount $ 27,291 Interest expense related to amortization of debt issuance costs 3,119 Non-cash interest expense 16,074 Total interest expense $ 46,484 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases is as follows: As of July 31, 2020 2021 (in thousands) Operating leases: Operating lease right-of-use assets, gross $ 159,292 $ 170,277 Accumulated amortization ( 31,966 ) ( 64,374 ) Operating lease right-of-use assets, net $ 127,326 $ 105,903 Operating lease liabilities—current $ 36,569 $ 42,670 Operating lease liabilities—non-current 116,794 86,599 Total operating lease liabilities $ 153,363 $ 129,269 Weighted average remaining lease term (in years): 3.7 3.1 Weighted average discount rate: 5.3 % 5.5 % As of July 31, 2021 (in thousands) Finance leases: Finance lease right-of-use assets, gross (1) $ 8,972 Accumulated amortization (1) ( 687 ) Finance lease right-of-use assets, net (1) $ 8,285 Finance lease liabilities—current (2) $ 1,772 Finance lease liabilities—non-current (3) 6,527 Total finance lease liabilities $ 8,299 Weighted average remaining lease term (in years): 4.7 Weighted average discount rate: 6.7 % (1) Included in the consolidated balance sheets within property and equipment, net. (2) Included in the consolidated balance sheets within accrued expenses and other current liabilities. (3) Included in the consolidated balance sheets within other liabilities—non-current. |
Lease, Cost | Supplemental cash flow and other information related to leases is as follows: Fiscal Year Ended July 31, 2020 2021 (in thousands) Cash paid for amounts included in the measurement of Operating cash flows from operating leases $ 42,231 $ 46,216 Financing cash flows from finance leases $ — $ 459 Lease liabilities arising from obtaining right-of-use assets: Operating leases $ 45,278 $ 16,174 Finance leases $ — $ 9,622 |
Lessee, Operating Lease, Liability, Maturity | The undiscounted cash flows for our operating lease liabilities as of July 31, 2021 were as follows: Fiscal Year Ending July 31: Operating Finance Total (in thousands) 2022 $ 48,701 $ 1,832 $ 50,533 2023 47,131 1,832 48,963 2024 33,265 1,832 35,097 2025 7,603 1,832 9,435 2026 2,542 1,128 3,670 Thereafter 2,616 — 2,616 Total lease payments 141,858 8,456 150,314 Less: imputed interest ( 12,589 ) ( 157 ) ( 12,746 ) Total lease obligation 129,269 8,299 137,568 Less: current lease obligations ( 42,670 ) ( 1,772 ) ( 44,442 ) Long-term lease obligations $ 86,599 $ 6,527 $ 93,126 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Equity [Abstract] | |
Schedule of Stock by Class | As of July 31, 2021, we had reserved shares of common stock for future issuance as follows: As of July 31, 2021 (in thousands) Shares reserved for future equity grants 14,501 Shares underlying outstanding stock options 3,334 Shares underlying outstanding restricted stock units 21,708 Shares reserved for future employee stock purchase plan awards 5,189 Total 44,732 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of RSUs Activity | Below is a summary of RSU activity, including MSUs, under the Stock Plans: Fiscal Year Ended July 31, 2020 2021 Number of Weighted Number of Weighted (in thousands) (in thousands) Outstanding at beginning of period 22,136 $ 36.72 22,632 $ 32.70 Granted 13,502 $ 27.31 13,732 $ 29.60 Released ( 8,807 ) $ 33.86 ( 9,744 ) $ 32.58 Forfeited ( 4,199 ) $ 34.82 ( 4,912 ) $ 31.87 Outstanding at end of period 22,632 $ 32.70 21,708 $ 30.98 |
Schedule of Stock Option Activity | Below is a summary of stock option activity under the Stock Plans: Fiscal Year Ended July 31, 2020 2021 Number of Weighted Weighted Aggregate Number of Weighted Weighted Aggregate (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) Outstanding at beginning of period 8,740 $ 5.20 4.6 $ 153,000 7,546 $ 5.10 3.6 $ 129,010 Options granted — $ — — $ — Options exercised ( 1,192 ) $ 5.83 ( 3,712 ) $ 4.07 Options canceled/forfeited ( 2 ) $ 26.21 ( 500 ) $ 12.00 Outstanding at end of period 7,546 $ 5.10 3.6 $ 129,010 3,334 $ 5.20 2.8 $ 102,740 Exercisable at end of period 7,545 $ 5.09 3.7 $ 129,004 3,334 $ 5.20 2.8 $ 102,739 |
Schedule of ESPP Valuation Assumptions | We use the Black-Scholes option pricing model to determine the fair value of shares purchased under the 2016 ESPP with the following weighted average assumptions on the date of grant: Fiscal Year Ended July 31, 2019 2020 2021 Expected term (in years) 0.84 0.92 0.77 Risk-free interest rate 2.5 % 0.1 % 0.1 % Volatility 69.0 % 73.4 % 56.9 % Dividend yield — % — % — % |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Total stock-based compensation expense recognized in the consolidated statements of operations is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Cost of revenue: Product $ 3,535 $ 5,334 $ 6,023 Support, entitlements and other services 15,326 22,014 24,460 Sales and marketing 107,751 126,015 122,815 Research and development 140,519 153,252 150,856 General and administrative 39,598 45,383 54,391 Total stock-based compensation expense $ 306,729 $ 351,998 $ 358,545 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The computation of basic and diluted net loss per share attributable to Class A and Class B common stockholders is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands, except per share data) Numerator: Net loss $ ( 621,179 ) $ ( 872,883 ) $ ( 1,034,260 ) Denominator: Weighted average shares—basic and diluted 181,031 194,719 206,475 Net loss per share attributable to common stockholders— $ ( 3.43 ) $ ( 4.48 ) $ ( 5.01 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the fiscal years presented because including them would have been antidilutive are as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Outstanding stock options and RSUs 30,876 30,178 25,042 Employee stock purchase plan 1,659 4,368 2,838 Common stock issuable upon the conversion of convertible debt — — 1,529 Contingently issuable shares pursuant to acquisitions 749 506 253 Common stock warrants 34 — — Total 33,318 35,052 29,662 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Loss before provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Domestic $ ( 658,938 ) $ ( 905,840 ) $ ( 1,066,307 ) Foreign 45,878 50,619 50,534 Loss before provision for income taxes $ ( 613,060 ) $ ( 855,221 ) $ ( 1,015,773 ) |
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) Current: U.S. federal $ ( 1,998 ) $ 175 $ 9 State and local 312 79 99 Foreign 17,270 18,033 21,801 Total current taxes 15,584 18,287 21,909 Deferred: U.S. federal ( 4,949 ) 80 24 State and local ( 770 ) — — Foreign ( 1,746 ) ( 705 ) ( 3,446 ) Total deferred taxes ( 7,465 ) ( 625 ) ( 3,422 ) Provision for income taxes $ 8,119 $ 17,662 $ 18,487 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory income tax rate of 21 % to pre-tax loss. The reconciliation of the statutory federal income tax and our effective income tax is as follows: Fiscal Year Ended July 31, 2019 2020 2021 (in thousands) U.S. federal income tax at statutory rate $ ( 128,680 ) $ ( 179,514 ) $ ( 213,391 ) Change in valuation allowance 142,273 145,244 156,576 Non-deductible item on fair value remeasurement of — — 56,546 Stock-based compensation ( 23,378 ) 30,913 4,663 Effect of foreign operations 14,305 12,676 9,851 Non-deductible expenses 4,651 5,393 1,739 Change in unrecognized tax benefit 727 1,709 2,550 State income taxes ( 458 ) 79 99 Transfer pricing adjustments ( 3 ) 7 — Intangible asset migration ( 2,027 ) — — Other 709 1,155 ( 146 ) Total $ 8,119 $ 17,662 $ 18,487 |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of July 31, 2020 2021 (in thousands) Deferred tax assets: Net operating loss carryforward $ 412,110 $ 573,944 Deferred revenue 122,236 168,417 Tax credit carryforward 152,330 164,984 Leases 48,270 40,011 Intangible assets 31,119 28,557 Accruals and reserves 13,401 21,727 Stock-based compensation 24,177 18,957 Property and equipment 2,234 3,385 Other assets 29,022 41,886 Total deferred tax assets 834,899 1,061,868 Deferred tax liabilities: Deferred commission expense ( 50,344 ) ( 83,054 ) Leases ( 44,502 ) ( 38,368 ) Acquisition-related ( 8,003 ) ( 4,633 ) Property and equipment ( 5,629 ) ( 3,681 ) Prepaid expenses ( 2,140 ) ( 2,013 ) Foreign branch taxes ( 5,175 ) ( 1,806 ) Other ( 1,991 ) ( 1,204 ) Total deferred tax liabilities ( 117,784 ) ( 134,759 ) Valuation allowance ( 712,093 ) ( 918,689 ) Net deferred tax assets $ 5,022 $ 8,420 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of our unrecognized tax benefits, excluding accrued interest and penalties, is as follows: Fiscal Year Ended July 31, 2020 2021 (in thousands) Balance at the beginning of the year $ 81,250 $ 85,257 Increases related to current year tax positions 3,897 4,335 Increases related to prior year tax positions 491 328 Decreases related to prior year tax positions ( 381 ) — Other — ( 145 ) Balance at the end of the year $ 85,257 $ 89,775 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | The following table sets forth revenue by geographic location based on bill-to location: Fiscal Year Ended July 3 1 , 2019 2020 2021 (in thousands) U.S. $ 682,340 $ 706,110 $ 758,128 Europe, the Middle East and Africa 238,356 277,489 320,837 Asia Pacific 271,712 265,092 260,637 Other Americas 43,735 58,991 54,762 Total revenue $ 1,236,143 $ 1,307,682 $ 1,394,364 |
Schedule of Long-lived Assets by Geographical Location | The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location: As of July 31, 2020 2021 (in thousands) United States $ 136,721 $ 86,468 International 55,808 45,152 Total long-lived assets $ 192,529 $ 131,620 |
Overview and Summary of Signi_4
Overview and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Aug. 01, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Sep. 24, 2020 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Impairment losses | $ 0 | $ 0 | $ 0 | |||
Foreign currency transaction gain (loss), before tax | (8,900,000) | (9,400,000) | (2,500,000) | |||
Advertising expense | 22,100,000 | 38,700,000 | $ 26,700,000 | |||
Accumulated deficit | 3,627,355,000 | 2,522,192,000 | ||||
Derivative liability | $ 500,175,000 | $ 230,910,000 | ||||
2023 Convertible Senior Notes | Convertible Debt | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Closing trading price | $ 100 | |||||
Interest rate, stated percentage | 0.00% | |||||
2026 Convertible Senior Notes | Convertible Debt | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Interest rate, stated percentage | 2.50% | 2.50% | ||||
Derivative liability | $ 230,900,000 | |||||
ASU 2016-13 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted | true | |||||
Change in accounting principle, accounting standards update, adoption date | Aug. 1, 2020 | |||||
Change in accounting principle, accounting standards update, immaterial effect | true | |||||
ASU 2018-13 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted | true | |||||
Change in accounting principle, accounting standards update, adoption date | Aug. 1, 2020 | |||||
Change in accounting principle, accounting standards update, immaterial effect | true | |||||
ASU 2020-06 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adoption date | Aug. 1, 2021 | |||||
Hardware | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Warranty duration, hardware (in years) | 1 year | |||||
Product warranty replacement period (in years) | 3 years | |||||
Software | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Warranty duration, hardware (in years) | 90 days | |||||
Subsequent Event [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | $ (100,600,000) | |||||
Adjustments to Additional Paid in Capital, Other | 148,600,000 | |||||
Subsequent Event [Member] | Convertible Notes Payable [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Increase in carrying value of the notes outstanding | $ 48,000,000 |
Overview and Summary of Signi_5
Overview and Summary of Significant Accounting Policies - Schedules of Concentration of Revenue and Accounts Receivable (Details) - Partner Concentration Risk | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenue | Partner A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 32.00% | 29.00% | 24.00% |
Revenue | Partner B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 14.00% | 13.00% |
Revenue | Partner C | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | |
Revenue | Partner D | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable | Partner A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 35.00% | 33.00% | |
Accounts Receivable | Partner B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 23.00% | 16.00% |
Overview and Summary of Signi_6
Overview and Summary of Significant Accounting Policies - Schedule of Changes in Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses-beginning balance | $ 804 | $ 379 | $ 815 |
Charged to allowance for credit losses | 655 | 822 | 437 |
Recoveries | (286) | (22) | (290) |
Write-offs | (281) | (375) | (583) |
Allowance for credit losses-ending balance | $ 892 | $ 804 | $ 379 |
Business Combinations - Prelimi
Business Combinations - Preliminary Aggregate Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 185,260 | $ 185,260 | $ 185,180 |
Revenue, Deferred Revenue and_3
Revenue, Deferred Revenue and Deferred Commissions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Total revenue | $ 1,394,364 | $ 1,307,682 | $ 1,236,143 |
Amount deferred in prior period | 488,200 | 371,800 | |
Contracted revenue not recognized | $ 1,400,000 | ||
Percent expected to be recognized in next year | 50.00% | ||
Ratable | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Total revenue | $ 639,300 | 508,800 | 376,400 |
Upfront | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Total revenue | $ 604,300 | $ 521,300 | $ 272,000 |
Minimum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Software, license term | 1 year | ||
Maximum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Software, license term | 5 years |
Revenue, Deferred Revenue and_4
Revenue, Deferred Revenue and Deferred Commissions - Revenue by Arrangement, Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Condensed Income Statements, Captions [Line Items] | |||
Total revenue | $ 1,394,364 | $ 1,307,682 | $ 1,236,143 |
Subscription | |||
Condensed Income Statements, Captions [Line Items] | |||
Total revenue | 1,243,621 | 1,030,180 | 648,415 |
Non-portable software | |||
Condensed Income Statements, Captions [Line Items] | |||
Total revenue | 71,390 | 208,158 | 449,131 |
Hardware | |||
Condensed Income Statements, Captions [Line Items] | |||
Total revenue | 6,259 | 23,455 | 105,321 |
Professional services | |||
Condensed Income Statements, Captions [Line Items] | |||
Total revenue | $ 73,094 | $ 45,889 | $ 33,276 |
Revenue, Deferred Revenue and_5
Revenue, Deferred Revenue and Deferred Commissions - Deferred Revenue, by Arrangement, Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Movement in Deferred Commissions [Roll Forward] | ||
Deferred commissions, beginning balance | $ 1,183,441 | $ 910,044 |
Additions | 818,042 | 815,257 |
Revenue/commissions recognized | (688,560) | (541,860) |
Deferred commissions, ending balance | 1,312,923 | 1,183,441 |
Deferred revenue, beginning balance | 215,528 | 153,712 |
Additions | 310,966 | 233,917 |
Revenue/commissions recognized | (183,074) | (172,101) |
Deferred revenue, ending balance | $ 343,420 | $ 215,528 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Financial Assets: | ||
Short-term investments: | $ 928,006 | $ 401,041 |
Recurring | ||
Financial Assets: | ||
Total measured at fair value | 1,032,588 | 552,976 |
Cash | 181,141 | 166,802 |
Total cash, cash equivalents and short-term investments | 1,213,729 | 719,778 |
Recurring | Corporate bonds | ||
Financial Assets: | ||
Cash equivalents: | 2,002 | |
Short-term investments: | 513,688 | 345,265 |
Recurring | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 29,997 | 8,999 |
Short-term investments: | 347,088 | 29,702 |
Recurring | U.S. government securities | ||
Financial Assets: | ||
Short-term investments: | 67,230 | 26,074 |
Recurring | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 72,583 | 142,936 |
Recurring | Level I | ||
Financial Assets: | ||
Total measured at fair value | 72,583 | 142,936 |
Recurring | Level I | Corporate bonds | ||
Financial Assets: | ||
Cash equivalents: | 0 | |
Short-term investments: | 0 | 0 |
Recurring | Level I | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Short-term investments: | 0 | 0 |
Recurring | Level I | U.S. government securities | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level I | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 72,583 | 142,936 |
Recurring | Level II | ||
Financial Assets: | ||
Short-term investments: | 29,702 | |
Total measured at fair value | 960,005 | 410,040 |
Recurring | Level II | Corporate bonds | ||
Financial Assets: | ||
Cash equivalents: | 2,002 | |
Short-term investments: | 513,688 | 345,265 |
Recurring | Level II | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 29,997 | 8,999 |
Short-term investments: | 347,088 | |
Recurring | Level II | U.S. government securities | ||
Financial Assets: | ||
Short-term investments: | 67,230 | 26,074 |
Recurring | Level II | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level III | ||
Financial Assets: | ||
Total measured at fair value | 0 | 0 |
Recurring | Level III | Corporate bonds | ||
Financial Assets: | ||
Cash equivalents: | 0 | |
Short-term investments: | 0 | 0 |
Recurring | Level III | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Short-term investments: | 0 | 0 |
Recurring | Level III | U.S. government securities | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level III | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | $ 0 | $ 0 |
Fair Value Measurements - Non-r
Fair Value Measurements - Non-recurring Basis (Details) - Convertible Debt - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 | |
2023 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Unamortized Discount | [1] | $ (48,616) | $ (80,298) |
Unamortized Debt Issuance Expense | [1] | (2,713) | (4,480) |
2026 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Unamortized Discount | [2] | (203,619) | |
Unamortized Debt Issuance Expense | (23,264) | ||
Reported Value Measurement | Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 1,055,694 | 490,222 | |
Reported Value Measurement | Fair Value, Measurements, Nonrecurring | 2023 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 523,671 | 490,222 | |
Reported Value Measurement | Fair Value, Measurements, Nonrecurring | 2026 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 532,023 | 0 | |
Estimate of Fair Value Measurement | Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 1,731,225 | 529,385 | |
Estimate of Fair Value Measurement | Fair Value, Measurements, Nonrecurring | 2023 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 602,272 | 529,385 | |
Estimate of Fair Value Measurement | Fair Value, Measurements, Nonrecurring | 2026 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 1,128,953 | $ 0 | |
[1] | Included in the consolidated balance sheets within "convertible senior notes, net" and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62 %. | ||
[2] | Included in the consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05 % |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Convertible Debt - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | ||
2023 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unamortized discount | [1] | $ 48,616 | $ 80,298 |
Unamortized debt issuance cost | [1] | $ 2,713 | $ 4,480 |
Closing trading price | $ 100 | ||
2026 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unamortized discount | [2] | $ 203,619 | |
Unamortized debt issuance cost | 23,264 | ||
Non Cash Interest Expense Converted To Principal | $ 8,906 | ||
[1] | Included in the consolidated balance sheets within "convertible senior notes, net" and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62 %. | ||
[2] | Included in the consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05 % |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Changes in Derivative Liability (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2021USD ($) | |
Fair Value Disclosures [Abstract] | |
Derivative liability at issuance of the 2026 Notes | $ 230,910 |
Change in fair value of derivative liability | 269,265 |
Derivative liability, end of period | $ 500,175 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Derivative Liability Measurement Inputs and Valuation Techniques (Details) | Jul. 31, 2021USD ($) | Sep. 24, 2020USD ($) | |
Conversion Price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | [1] | 27.75 | 26.63 |
Conversion Ratio | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | [1] | 36.036 | 37.552 |
Risk Free Interest Rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 0.7 | 0.4 | |
Discount Rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | [2] | 6.5 | 9 |
Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 40 | 42.7 | |
Stock Price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 36.02 | 21.26 | |
[1] | The conversion ratio was estimated based on the latest forecast of the associated financial performance metric. | ||
[2] | The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis. |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Investments in Marketable Debt Securities, by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Debt Securities, Available-for-sale, Maturity, Fair Value, Rolling Maturity [Abstract] | ||
Due within one year | $ 772,853 | |
Due in one to two years | 155,153 | |
Total | $ 928,006 | $ 401,041 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid operating expenses | $ 36,455 | $ 31,690 |
VAT receivables | 8,290 | 8,381 |
Tenant improvement allowance receivables | 8,557 | |
Other current assets | 12,071 | 14,404 |
Total prepaid expenses and other current assets | $ 56,816 | $ 63,032 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | ||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | $ 448,769 | $ 394,397 | ||
Less: accumulated depreciation | [1] | 317,148 | 251,225 | |
Total property and equipment, net | 131,621 | 143,172 | ||
Impairment of Leasehold | 900 | 1,200 | ||
Depreciation and amortization | $ 94,373 | 93,773 | $ 77,612 | |
Computer, production, engineering and other equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 36 months | |||
Total property and equipment, gross | $ 300,583 | 245,245 | ||
Demonstration units | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 12 months | |||
Total property and equipment, gross | $ 68,992 | 66,569 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | [2] | $ 62,676 | 65,557 | |
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 60 months | |||
Total property and equipment, gross | $ 16,518 | $ 17,026 | ||
[1] | Includes a $ 1.2 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2020 and a $ 0.9 million write-off related to the impairment of certain leasehold improvements during the fiscal year ended July 31, 2021. For additional information on these lease-related impairments, refer to Note 6. | |||
[2] | Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Property and Equipment, Net (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Impairment of Leasehold | $ 0.9 | $ 1.2 |
Balance Sheet Components (Addit
Balance Sheet Components (Additional Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Property, Plant and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 76.5 | $ 76.4 | $ 60.8 |
Balance Sheet Components - Sc_5
Balance Sheet Components - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | ||
Finite-lived intangible assets: | |||
Total intangible assets, gross | $ 92,330 | $ 92,330 | |
Less: | |||
Accumulated amortization | (60,318) | (42,938) | |
Intangible assets, net | 32,012 | 49,392 | |
Intangible assets, net—beginning balance | 49,392 | 66,773 | |
Amortization of intangible assets | [1] | (17,380) | (17,381) |
Intangible assets, net—ending balance | 32,012 | 49,392 | |
Developed technology | |||
Finite-lived intangible assets: | |||
Finite-lived intangible assets, gross | 79,300 | 79,300 | |
Less: | |||
Accumulated amortization | (50,764) | 35,987 | |
Customer relationships | |||
Finite-lived intangible assets: | |||
Finite-lived intangible assets, gross | 8,860 | 8,860 | |
Less: | |||
Accumulated amortization | (6,513) | 4,953 | |
Trade Names | |||
Finite-lived intangible assets: | |||
Finite-lived intangible assets, gross | 4,170 | 4,170 | |
Less: | |||
Accumulated amortization | $ (3,041) | $ 1,998 | |
[1] | Represents amortization expense related to intangible assets recognized during the year in the consolidated statements of operations, within product cost of revenue and sales and marketing expense . |
Balance Sheet Components - Sc_6
Balance Sheet Components - Schedule of Finite-lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Jul. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 16,183 |
2023 | 10,856 |
2024 | 3,210 |
2025 | 1,763 |
Total | $ 32,012 |
Balance Sheet Components - Sc_7
Balance Sheet Components - Schedule of Changes in the Carrying Amount of Goodwill (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $ 185,180 |
Other | 80 |
Ending Balance | $ 185,260 |
Balance Sheet Components - Sc_8
Balance Sheet Components - Schedule of Accrued Compensation Benefits (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Employee-related Liabilities, Current [Abstract] | ||
Accrued commissions | $ 48,321 | $ 33,503 |
Accrued vacation | 26,961 | 24,006 |
Payroll taxes payable | 21,603 | 10,742 |
Contributions to ESPP withheld | 26,735 | 16,563 |
Accrued benefits | 10,243 | 8,426 |
Accrued bonus | 14,878 | 5,568 |
Other | 13,596 | 10,301 |
Total accrued compensation and benefits | $ 162,337 | $ 109,109 |
Balance Sheet Components - Sc_9
Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Income taxes payable | $ 13,309 | $ 9,703 |
Accrued professional services | 3,541 | 3,006 |
Other | 22,554 | 13,215 |
Total accrued expenses and other current liabilities | $ 39,404 | $ 25,924 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) $ / shares in Units, shares in Millions | Sep. 24, 2020USD ($)d$ / shares | Jan. 31, 2018USD ($)d$ / sharesshares | Jul. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021$ / shares | Jul. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||
Derivative liability | $ 500,175,000 | $ 230,910,000 | |||
2023 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Payments for convertible note hedges | $ 143,200,000 | ||||
Number of securities called by warrants or rights (in shares) | shares | 11.8 | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 73.46 | $ 73.46 | |||
Proceeds from issuance of warrants | $ 88,000,000 | ||||
Transaction cost | $ 55,200,000 | ||||
Dilutive effect of convertible securities (in shares) | shares | 3.9 | ||||
Share price threshold for dilutive effect of convertible debt (in dollars per share) | $ / shares | $ 73.46 | ||||
Dilutive effect of $10 increase in share price (in shares) | shares | 4.9 | ||||
Dilutive effect of warrants (in shares) | shares | 1.4 | ||||
Share price threshold for dilutive effect of warrants (in dollars per share) | $ / shares | $ 83.46 | ||||
Convertible Debt | 2023 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 0.00% | ||||
Face amount | $ 575,000,000 | ||||
Convertible debt | $ 75,000,000 | ||||
Conversion ratio | 20.4705 | ||||
Conversion price (in dollars per share) | $ / shares | $ 48.85 | ||||
Payments for convertible note hedges | $ 143,175,000 | ||||
Threshold trading days | d | 20 | ||||
Threshold consecutive trading days | d | 30 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Redemption price, percentage | 100.00% | ||||
Carrying amount of liability component | $ 423,400,000 | ||||
Carrying amount of equity component | 151,600,000 | ||||
Unamortized discount and debt issuance costs, net | 11,500,000 | ||||
Unamortized discount, net | 10,781,000 | ||||
Less: other issuance costs | (707,000) | ||||
Transaction costs attributable to liability component | 8,500,000 | ||||
Transaction costs attributable to equity component | 3,000,000 | $ 3,000,000 | |||
Debt instrument, term | 17 months | ||||
Proceeds from issuance of warrants | 87,975,000 | ||||
Debt instrument, principal amount for conversion into common stock | $ 1,000 | ||||
Convertible Debt | 2026 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 2.50% | 2.50% | |||
Face amount | $ 750,000,000 | ||||
Conversion ratio | 0.036036 | ||||
Conversion price (in dollars per share) | $ / shares | $ 27.75 | ||||
Threshold trading days | d | 20 | ||||
Threshold consecutive trading days | d | 30 | ||||
Threshold percentage of stock price trigger | 150.00% | ||||
Redemption price, percentage | 100.00% | ||||
Debt instrument, term | 5 years 1 month 6 days | ||||
Proceeds from the issuance of convertible notes, net of issuance costs | $ 723,700,000 | ||||
Payments of debt issuance costs | 26,300,000 | ||||
Debt instrument, principal amount for conversion into common stock | $ 1,000 | ||||
Derivative liability | $ 230,900,000 | ||||
Convertible Debt | 2026 Convertible Senior Notes | Forecast | |||||
Debt Instrument [Line Items] | |||||
Conversion price (in dollars per share) | $ / shares | $ 27.75 | ||||
Maximum | Convertible Debt | 2026 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, conversion price, price range | $ / shares | $ 27.75 | ||||
Minimum | Convertible Debt | 2026 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, conversion price, price range | $ / shares | $ 25.25 | ||||
Common Class A | 2023 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Share price (in dollars per share) | $ / shares | $ 36.02 | ||||
Fair value of common stock (in dollars per share) | $ / shares | $ 36.02 | ||||
Common Class A | Convertible Debt | 2023 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of stock price trigger | 98.00% |
Convertible Senior Notes - Net
Convertible Senior Notes - Net Proceeds from Notes (Details) - 2023 Convertible Senior Notes - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | |
Debt Instrument [Line Items] | |||
Less: cost of the bond hedges | $ (143,200) | ||
Add: proceeds from the sale of warrants | 88,000 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal amount | 575,000 | $ 575,000 | $ 575,000 |
Less: initial purchasers' discount | (10,781) | ||
Less: cost of the bond hedges | (143,175) | ||
Add: proceeds from the sale of warrants | 87,975 | ||
Less: other issuance costs | (707) | ||
Net proceeds | $ 508,312 |
Convertible Senior Notes - Comp
Convertible Senior Notes - Components of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 | Jan. 31, 2018 | |
2023 Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Net carrying amount | $ 523,671 | $ 490,222 | ||
Convertible Debt | 2023 Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 575,000 | 575,000 | $ 575,000 | |
Unamortized debt discount | [1] | (48,616) | (80,298) | |
Unamortized debt issuance costs | [1] | (2,713) | (4,480) | |
Carrying amount of equity component | [2] | $ 148,598 | $ 148,598 | |
Effective interest rate | 6.62% | |||
Convertible Debt | 2026 Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 750,000 | |||
Non-cash interest expense converted to principal | 8,906 | |||
Unamortized debt discount | [3] | (203,619) | ||
Unamortized debt issuance costs | (23,264) | |||
Net carrying amount | $ 532,023 | |||
Effective interest rate | 7.05% | |||
[1] | Included in the consolidated balance sheets within "convertible senior notes, net" and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62 %. | |||
[2] | Included in the consolidated balance sheets within additional paid-in capital, net of $ 3.0 million in equity issuance costs. | |||
[3] | Included in the consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05 % |
Convertible Senior Notes - Co_2
Convertible Senior Notes - Components of Notes (Parenthetical) (Details) - Convertible Debt - USD ($) $ in Millions | Jul. 31, 2021 | Jan. 31, 2018 |
2023 Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 6.62% | |
Payments of offering costs | $ (3) | $ (3) |
2026 Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 7.05% |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Debt Instrument [Line Items] | |||
Non-cash interest expense | $ 16,074 | ||
Convertible Debt | 2023 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Interest expense related to amortization of debt discount | 31,682 | $ 29,658 | $ 27,764 |
Interest expense related to amortization of debt issuance costs | 1,767 | 1,654 | 1,549 |
Total interest expense | 33,449 | $ 31,312 | $ 29,313 |
Convertible Debt | 2026 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Interest expense related to amortization of debt discount | 27,291 | ||
Interest expense related to amortization of debt issuance costs | 3,119 | ||
Non-cash interest expense | 16,074 | ||
Total interest expense | $ 46,484 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease, cost | $ 42,600 | $ 39,100 | |
Operating leases, rent expense | $ 37,000 | ||
Finance lease, cost | 700 | ||
Impairment loss | 1,420 | 3,002 | |
Right-of-use asset, impairment loss | 500 | 1,800 | |
Impairment of leasehold | 900 | $ 1,200 | |
Lease not yet commenced, undiscounted amount | $ 2,500 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Lease not yet commenced, term of contract | 2 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 8 years | ||
Lease not yet commenced, term of contract | 3 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Operating Lease, Liability [Abstract] | ||
Operating lease right-of-use assets, gross | $ 170,277 | $ 159,292 |
Accumulated amortization | (64,374) | (31,966) |
Operating lease right-of-use assets, net | 105,903 | 127,326 |
Operating lease liabilities—current | 42,670 | 36,569 |
Operating lease liabilities—non-current | 86,599 | 116,794 |
Total operating lease liabilities | $ 129,269 | $ 153,363 |
Weighted average remaining lease term (in years) | 3 years 1 month 6 days | 3 years 8 months 12 days |
Weighted average discount rate: | 5.50% | 5.30% |
Finance Lease Liability [Abstract] | ||
Finance lease right-of-use assets, gross | $ 8,972 | |
Accumulated amortization | (687) | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total | 8,285 | |
Finance Lease, Liability, Current | 1,772 | |
Finance Lease, Liability, Noncurrent | 6,527 | |
Finance Lease, Liability, Total | $ 8,299 | |
Weighted average remaining lease term (in years) | 4 years 8 months 12 days | |
Weighted average discount rate | 6.70% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 46,216 | $ 42,231 |
Financing cash flows from finance leases | 459 | 0 |
Lease liabilities arising from obtaining right-of-use assets from operating leases | 16,174 | 45,278 |
Lease liabilities arising from obtaining right-of-use assets from finance leases | $ 9,622 | $ 0 |
Leases - Remaining Maturity Und
Leases - Remaining Maturity Under Topic 842 (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Operating Lease, Liability [Abstract] | ||
2022 | $ 48,701 | |
2023 | 47,131 | |
2024 | 33,265 | |
2025 | 7,603 | |
2026 | 2,542 | |
Thereafter | 2,616 | |
Total lease payments | 141,858 | |
Less: imputed interest | (12,589) | |
Total operating lease liabilities | 129,269 | $ 153,363 |
Less: current lease obligations | (42,670) | (36,569) |
Long-term lease obligations | 86,599 | $ 116,794 |
Lessee Disclosure [Abstract] | ||
2022 | 50,533 | |
2023 | 48,963 | |
2024 | 35,097 | |
2025 | 9,435 | |
2026 | 3,670 | |
Thereafter | 2,616 | |
Total lease payments | 150,314 | |
Less: imputed interest | 12,746 | |
Total lease obligation | 137,568 | |
Less: current lease obligations | 44,442 | |
Long-term lease obligations | 93,126 | |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2022 | 1,832 | |
2023 | 1,832 | |
2024 | 1,832 | |
2025 | 1,832 | |
2026 | 1,128 | |
Thereafter | 0 | |
Finance Lease, Liability, Payment, Due, Total | 8,456 | |
Less: imputed interest | (157) | |
Finance Lease, Liability, Total | 8,299 | |
Less: current lease obligations | 1,772 | |
Long-term lease obligations | $ 6,527 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Jul. 31, 2021USD ($) |
Non-contract Vendors | |
Loss Contingencies [Line Items] | |
Purchase obligation | $ 72.7 |
Contract Manufacturer | |
Loss Contingencies [Line Items] | |
Purchase obligation | $ 48 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Jul. 31, 2021USD ($)VoteClass$ / sharesshares | Aug. 31, 2020USD ($) | Jul. 31, 2020$ / sharesshares | |
Class of Stock [Line Items] | |||
Common stock, number of classes of stock | Class | 2 | ||
Common stock, shares authorized (in shares) | 1,200,000 | 1,200,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.000025 | $ 0.000025 | |
Common stock, shares issued (in shares) | 214,210 | 201,949 | |
Common stock, shares outstanding (in shares) | 214,210 | 201,949 | |
Repurchase and retirement of common stock (in shares) | 5,200 | ||
Payments for repurchase of common stock | $ | $ 125,079,000 | ||
Stock repurchase program, remaining authorization amount | $ | $ 0 | ||
Common Class A [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.000025 | $ 0.000025 | |
Common stock, shares issued (in shares) | 208,579 | 186,846 | |
Common stock, shares outstanding (in shares) | 208,579 | 186,846 | |
Common stock number of votes per share | Vote | 1 | ||
Stock repurchase program, authorized amount | $ | $ 125,000,000 | ||
Stock repurchase price (in dollars per share) | $ / shares | $ 24.15 | ||
Payments for repurchase of common stock | $ | $ 125,000,000 | ||
Common Class B [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 200,000 | 200,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.000025 | $ 0.000025 | |
Common stock, shares issued (in shares) | 5,631 | 15,103 | |
Common stock, shares outstanding (in shares) | 5,631 | 15,103 | |
Common stock number of votes per share | Vote | 10 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Reserved Shares of Common Stock for Future Issuance (Details) | Jul. 31, 2021Classshares | Jul. 31, 2020shares | Dec. 13, 2019shares | Jul. 31, 2019shares | Sep. 30, 2016shares |
Class of Stock [Line Items] | |||||
Common stock, number of classes of stock | Class | 2 | ||||
Shares underlying outstanding stock options (in shares) | 3,334,000 | 7,546,000 | 8,740,000 | ||
Shares reserved for future issuance (in shares) | 44,732,000 | ||||
2016 Plan | |||||
Class of Stock [Line Items] | |||||
Share reserved for future equity grants (in shares) | 14,500,000 | ||||
Shares reserved for future issuance (in shares) | 39,500,000 | ||||
RSUs | |||||
Class of Stock [Line Items] | |||||
Shares underlying outstanding restricted stock units (in shares) | 21,708,000 | 22,632,000 | 22,136,000 | ||
Employee Stock Purchase Plan | |||||
Class of Stock [Line Items] | |||||
Shares reserved for future issuance (in shares) | 5,189,000 | 5,200,000 | |||
Common Class A | 2016 Plan | |||||
Class of Stock [Line Items] | |||||
Share reserved for future equity grants (in shares) | 14,501,000 | ||||
Shares reserved for future issuance (in shares) | 22,400,000 | ||||
Common Class A | Employee Stock Purchase Plan | |||||
Class of Stock [Line Items] | |||||
Shares reserved for future issuance (in shares) | 11,500,000 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) | Aug. 01, 2021shares | Aug. 01, 2020shares | Dec. 13, 2019USD ($)PurchasePeriodshares | Aug. 01, 2019shares | Dec. 31, 2020$ / sharesshares | Sep. 30, 2016shares | Jul. 31, 2021USD ($)Plan$ / sharesshares | Jul. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity incentive plans | Plan | 3 | ||||||||
Shares reserved for future issuance (in shares) | 44,732,000 | ||||||||
Vested (in shares) | 7,000,000 | ||||||||
Nonvested shares (in shares) | 0 | 500,000 | |||||||
Options granted (in shares) | 0 | 0 | |||||||
Exercises in period, intrinsic value | $ | $ 90,500,000 | $ 23,400,000 | $ 90,300,000 | ||||||
Proceeds from stock options exercised | $ | 15,100,000 | 6,900,000 | 12,200,000 | ||||||
Options vested in period, fair value | $ | $ 200,000 | 1,000,000 | 4,400,000 | ||||||
ESPP stock issued during period (in shares) | 4,000,000 | ||||||||
Proceeds from Stock Plans | $ | $ 65,766,000 | $ 57,797,000 | 69,210,000 | ||||||
Compensation not yet recognized | $ | $ 610,100,000 | ||||||||
Period for recognition (in years) | 2 years 6 months | ||||||||
2016 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for future issuance (in shares) | 39,500,000 | ||||||||
Number of shares available for grant (in shares) | 14,500,000 | ||||||||
Modified Market Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity instruments outstanding (in shares) | 423,915 | ||||||||
Employee stock purchase plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for future issuance (in shares) | 5,200,000 | 5,189,000 | |||||||
Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period (in years) | 4 years | ||||||||
Expiration period (in years) | 10 years | ||||||||
Incentive Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percent of estimated fair value | 100.00% | ||||||||
Non-qualified Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percent of estimated fair value | 100.00% | ||||||||
RSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 13,732,000 | 13,502,000 | |||||||
Granted (in dollars per share) | $ / shares | $ 29.60 | $ 27.31 | |||||||
Released (in dollars per share) | $ / shares | $ 32.58 | $ 33.86 | |||||||
RSUs | Market Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Forfeited (in shares) | 300,000 | ||||||||
Granted (in shares) | 703,117 | ||||||||
Granted (in dollars per share) | $ / shares | $ 35.69 | ||||||||
Vesting percentage | 133.00% | ||||||||
Award vesting period (in years) | 4 years | ||||||||
Options vested in period, fair value | $ | $ 317,400 | $ 298,200 | $ 262,800 | ||||||
RSUs | Modified Market Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 75,000 | ||||||||
Granted (in dollars per share) | $ / shares | $ 27.54 | ||||||||
Award vesting period (in years) | 3 years 10 months 24 days | ||||||||
Employee Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percent of eligible compensation (up to) | 15.00% | ||||||||
Monetary cap | $ | $ 25,000 | ||||||||
Share cap (in shares) | 1,000 | ||||||||
Offering period duration (in months) | 2 months | ||||||||
Number of six-month purchase periods | PurchasePeriod | 2 | ||||||||
Purchase price of common stock, percent | 85.00% | ||||||||
Proceeds from Stock Plans | $ | $ 50,200,000 | ||||||||
Common Class A | 2016 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for future issuance (in shares) | 22,400,000 | ||||||||
Annual increase (in shares) | 18,000,000 | ||||||||
Annual increase, percent of outstanding shares | 5.00% | ||||||||
Number of additional shares authorized (in shares) | 10,700,000 | 10,100,000 | 9,400,000 | ||||||
Number of shares available for grant (in shares) | 14,501,000 | ||||||||
Common Class A | Employee stock purchase plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for future issuance (in shares) | 11,500,000 | ||||||||
Number of additional shares authorized (in shares) | 9,200,000 | ||||||||
Principal Owner | Incentive Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period (in years) | 5 years | ||||||||
Exercise price, percent of estimated fair value | 110.00% |
Equity Incentive Plans - RSU (D
Equity Incentive Plans - RSU (Details) - RSUs - $ / shares | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 22,632,000 | 22,136,000 | |
Granted (in shares) | 13,732,000 | 13,502,000 | |
Released (in shares) | (9,744,000) | (8,807,000) | |
Canceled/forfeited (in shares) | (4,912,000) | (4,199,000) | |
Outstanding, ending balance (in shares) | 21,708,000 | 22,632,000 | |
Grant Date Fair Value per Share | |||
Outstanding (in dollars per share) | $ 30.98 | $ 32.70 | $ 36.72 |
Granted (in dollars per share) | 29.60 | 27.31 | |
Released (in dollars per share) | 32.58 | 33.86 | |
Canceled/forfeited (in dollars per share) | $ 31.87 | $ 34.82 |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Number of Shares | |||
Beginning balance (in shares) | 7,546,000 | 8,740,000 | |
Options granted (in shares) | 0 | 0 | |
Options exercised (in shares) | (3,712,000) | (1,192,000) | |
Options canceled/forfeited (in shares) | (500,000) | (2,000) | |
Ending balance (in shares) | 3,334,000 | 7,546,000 | 8,740,000 |
Exercisable (in shares) | 3,334,000 | 7,545,000 | |
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 5.10 | $ 5.20 | |
Options granted (in dollars per share) | 0 | 0 | |
Options exercised (in dollars per share) | 4.07 | 5.83 | |
Options canceled/forfeited (in dollars per share) | 12 | 26.21 | |
Ending balance (in dollars per share) | 5.20 | 5.10 | $ 5.20 |
Exercisable (in dollars per share) | $ 5.20 | $ 5.09 | |
Additional Disclosures | |||
Outstanding (in years) | 2 years 9 months 18 days | 3 years 7 months 6 days | 4 years 7 months 6 days |
Exercisable (in years) | 2 years 9 months 18 days | 3 years 8 months 12 days | |
Outstanding, intrinsic value | $ 102,740 | $ 129,010 | $ 153,000 |
Exercisable, intrinsic value | $ 102,739 | $ 129,004 |
Equity Incentive Plans - ESPP (
Equity Incentive Plans - ESPP (Details) - Employee stock purchase plan | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 9 months 7 days | 11 months 1 day | 10 months 2 days |
Risk-free interest rate | 0.10% | 0.10% | 2.50% |
Volatility | 56.90% | 73.40% | 69.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Equity Incentive Plans - Stoc_2
Equity Incentive Plans - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 358,545 | $ 351,998 | $ 306,729 |
Cost of product revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 6,023 | 5,334 | 3,535 |
Cost of revenue, support and other services | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 24,460 | 22,014 | 15,326 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 122,815 | 126,015 | 107,751 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 150,856 | 153,252 | 140,519 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 54,391 | $ 45,383 | $ 39,598 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (1,034,260) | $ (872,883) | $ (621,179) |
Weighted average shares-basic and diluted | 206,475 | 194,719 | 181,031 |
Net loss per share attributable to common stockholders-basic and diluted | $ (5.01) | $ (4.48) | $ (3.43) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 29,662 | 35,052 | 33,318 |
Outstanding stock options and RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 25,042 | 30,178 | 30,876 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,838 | 4,368 | 1,659 |
Common stock issuable upon the conversion of convertible debt | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,529 | ||
Contingently issuable shares pursuant to acquisitions | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 253 | 506 | 749 |
Common stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 34 |
Net Loss Per Share - Antidilu_2
Net Loss Per Share - Antidilutive Securities (Additional Information) (Details) | Jul. 31, 2021$ / shares |
Measurement Input, Conversion Price [Member] | Common Class A [Member] | The 2026 Notes [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Debt Instrument, Convertible, Conversion Price | $ 27.75 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Provision for Income Taxes, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (1,066,307) | $ (905,840) | $ (658,938) |
Foreign | 50,534 | 50,619 | 45,878 |
Loss before provision for income taxes | $ (1,015,773) | $ (855,221) | $ (613,060) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes, Current and Deferred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Current: | |||
U.S. federal | $ 9 | $ 175 | $ (1,998) |
State and local | 99 | 79 | 312 |
Foreign | 21,801 | 18,033 | 17,270 |
Total current taxes | 21,909 | 18,287 | 15,584 |
Deferred: | |||
U.S. federal | 24 | 80 | (4,949) |
State and local | (770) | ||
Foreign | (3,446) | (705) | (1,746) |
Total deferred taxes | (3,422) | (625) | (7,465) |
Total | $ 18,487 | $ 17,662 | $ 8,119 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory income tax rate | 21.00% | |
Valuation allowance for deferred tax assets | $ 918,689 | $ 712,093 |
Valuation allowance increase | 206,600 | $ 202,300 |
Unrecognized tax benefits that would impact effective tax rate | 15,500 | |
Cash and cash equivalents in foreign subsidiaries | 164,300 | |
Accounts payable and accrued liabilities | 4,800 | |
United States of America, Dollars | ||
Operating Loss Carryforwards [Line Items] | ||
Cash and cash equivalents in foreign subsidiaries | 87,400 | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 2,600,000 | |
Federal | Research Credit Carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Research credit carryforwards | 113,500 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 1,700,000 | |
State | Research Credit Carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Research credit carryforwards | 82,300 | |
Foreign Tax Authority | Research Credit Carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Research credit carryforwards | $ 12,100 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax at statutory rate | $ (213,391) | $ (179,514) | $ (128,680) |
Change in valuation allowance | 156,576 | 145,244 | 142,273 |
Non-deductible item on fair value remeasurement derivative liability | 56,546 | ||
Stock-based compensation | 4,663 | 30,913 | 23,378 |
Effect of foreign operations | 9,851 | 12,676 | 14,305 |
Non-deductible expenses | 1,739 | 5,393 | 4,651 |
Change in unrecognized tax benefit | 2,550 | 1,709 | 727 |
State income taxes | 99 | 79 | 458 |
Transfer pricing adjustments | 7 | 3 | |
U.S. tax reform impact | 2,027 | ||
Intangible asset migration | 146 | 1,155 | 709 |
Other | 18,487 | 17,662 | 8,119 |
Total | $ 18,487 | $ 17,662 | $ 8,119 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 573,944 | $ 412,110 |
Deferred revenue | 168,417 | 122,236 |
Tax credit carryforward | 164,984 | 152,330 |
Leases | 40,011 | 48,270 |
Intangible assets | 28,557 | 31,119 |
Accruals and reserves | 21,727 | 13,401 |
Stock-based compensation | 18,957 | 24,177 |
Property and equipment | 3,385 | 2,234 |
Other assets | 41,886 | 29,022 |
Total deferred tax assets | 1,061,868 | 834,899 |
Deferred tax liabilities: | ||
Deferred commission expense | (83,054) | (50,344) |
Leases | (38,368) | (44,502) |
Acquisition-related | (4,633) | (8,003) |
Property and equipment | (3,681) | (5,629) |
Prepaid expenses | (2,013) | (2,140) |
Foreign branch taxes | (1,806) | (5,175) |
Other | (1,204) | (1,991) |
Total deferred tax liabilities | (134,759) | (117,784) |
Valuation allowance | (918,689) | (712,093) |
Net deferred tax assets | $ 8,420 | $ 5,022 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning balance | $ 85,257 | $ 81,250 |
Increases related to current year tax positions | 4,335 | 3,897 |
Increases related to prior year tax positions | 328 | 491 |
Decreases related to prior year tax positions | (381) | |
Other | (145) | |
Balance, ending balance | $ 89,775 | $ 85,257 |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 1,394,364 | $ 1,307,682 | $ 1,236,143 |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 758,128 | 706,110 | 682,340 |
Europe, the Middle East and Africa | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 320,837 | 277,489 | 238,356 |
Asia Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 260,637 | 265,092 | 271,712 |
Other Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 54,762 | $ 58,991 | $ 43,735 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Jul. 31, 2021Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Information - Schedul_2
Segment Information - Schedule of Sets Forth Long-Lived Assets Include Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 131,620 | $ 192,529 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 86,468 | 136,721 |
Non-US [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 45,152 | $ 55,808 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event shares in Millions, $ in Millions | Sep. 15, 2021USD ($)shares |
0.25% Convertible Senior Notes Due 2027 | |
Subsequent Event [Line Items] | |
Face amount | $ 575 |
0.25% Convertible Senior Notes Due 2027 | Cash Transaction | |
Subsequent Event [Line Items] | |
Face amount | 97.7 |
0.25% Convertible Senior Notes Due 2027 | Exchange Transactions | |
Subsequent Event [Line Items] | |
Face amount | 477.3 |
2023 Convertible Senior Notes | |
Subsequent Event [Line Items] | |
Debt outstanding | 145.7 |
Proceeds from subscription transactions | 88.4 |
Loss on extinguishment of debt | 416.5 |
2023 Convertible Senior Notes | Cash Transaction | |
Subsequent Event [Line Items] | |
Debt repurchase amount | 12.8 |
2023 Convertible Senior Notes | Exchange Transactions | |
Subsequent Event [Line Items] | |
Face amount | 416.5 |
2023 Convertible Senior Notes | Notes Repurchase [Member] | |
Subsequent Event [Line Items] | |
Proceeds from subscription transactions | 14.7 |
Common Class A | 2023 Convertible Senior Notes | |
Subsequent Event [Line Items] | |
Proceeds from subscription transactions | $ 58.5 |
Stock repurchased during period | shares | 1.4 |