DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions | 12 Months Ended | ||
Jul. 31, 2018 | Aug. 31, 2018 | Jan. 31, 2018 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Nutanix, Inc. | ||
Entity Central Index Key | 1,618,732 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 3.6 | ||
Common Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 135,144,663 | ||
Common Class B | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 37,744,316 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 305,975 | $ 138,359 |
Short-term investments | 628,328 | 210,694 |
Accounts receivable—net | 258,289 | 178,876 |
Deferred commissions—current | 33,691 | 23,843 |
Prepaid expenses and other current assets | 36,818 | 28,362 |
Total current assets | 1,263,101 | 580,134 |
Property and equipment, net | 85,111 | 58,072 |
Deferred commissions—non-current | 80,688 | 49,684 |
Intangible assets—net | 45,366 | 26,001 |
Goodwill | 87,759 | 16,672 |
Other assets—non-current | 37,855 | 7,649 |
Total assets | 1,599,880 | 738,212 |
Current liabilities: | ||
Accounts payable | 65,503 | 73,725 |
Accrued compensation and benefits | 85,398 | 57,521 |
Accrued expenses and other current liabilities | 31,682 | 9,707 |
Deferred revenue—current | 275,648 | 170,123 |
Total current liabilities | 458,231 | 311,076 |
Deferred revenue—non-current | 355,559 | 198,933 |
Convertible senior notes, net | 429,598 | 0 |
Other liabilities—non-current | 29,713 | 11,140 |
Total liabilities | 1,273,101 | 521,149 |
Commitments and contingencies (Note 7) | ||
Stockholders’ (deficit) equity: | ||
Preferred stock | 0 | 0 |
Common stock | 4 | 4 |
Additional paid-in capital | 1,355,907 | 948,134 |
Accumulated other comprehensive loss | (1,002) | (106) |
Accumulated deficit | (1,028,130) | (730,969) |
Total stockholders’ equity | 326,779 | 217,063 |
Total liabilities and stockholders’ equity | $ 1,599,880 | $ 738,212 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Accounts receivable, allowance | $ 815 | $ 132 |
Preferred stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
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) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares issued (in shares) | 172,858,082 | 154,636,520 |
Common stock, shares outstanding (in shares) | 172,858,082 | 154,636,520 |
Common Class A | ||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 135,109,672 | 93,570,171 |
Common stock, shares outstanding (in shares) | 135,109,672 | 93,570,171 |
Common Class B | ||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 37,748,410 | 61,066,349 |
Common stock, shares outstanding (in shares) | 37,748,410 | 61,066,349 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Revenue: | |||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
Cost of revenue: | |||||||||||
Total cost of revenue | 73,265 | 95,615 | 108,528 | 108,622 | 97,517 | 83,206 | 76,846 | 69,762 | 386,030 | 327,331 | 170,787 |
Gross profit | 230,483 | 193,798 | 178,216 | 166,930 | 154,941 | 122,464 | 122,368 | 118,799 | 769,427 | 518,572 | 332,623 |
Operating expenses: | |||||||||||
Sales and marketing | 183,191 | 169,860 | 151,201 | 145,405 | 134,276 | 126,746 | 111,374 | 128,625 | 649,657 | 501,021 | 286,584 |
Research and development | 97,050 | 81,291 | 70,924 | 64,512 | 67,817 | 74,607 | 70,914 | 75,281 | 313,777 | 288,619 | 116,400 |
General and administrative | 29,472 | 24,929 | 15,948 | 16,052 | 16,878 | 15,610 | 15,481 | 29,372 | 86,401 | 77,341 | 34,265 |
Total operating expenses | 309,713 | 276,080 | 238,073 | 225,969 | 218,971 | 216,963 | 197,769 | 233,278 | 1,049,835 | 866,981 | 437,249 |
Loss from operations | (79,230) | (82,282) | (59,857) | (59,039) | (64,030) | (94,499) | (75,401) | (114,479) | (280,408) | (348,409) | (104,626) |
Other expense, net | (4,021) | (4,235) | (861) | (189) | (547) | 303 | (421) | (25,712) | (9,306) | (26,377) | (1,290) |
Loss before provision for income taxes | (83,251) | (86,517) | (60,718) | (59,228) | (64,577) | (94,196) | (75,822) | (140,191) | (289,714) | (374,786) | (105,916) |
Provision for income taxes | 4,118 | (843) | 1,913 | 2,259 | 1,555 | 2,639 | 547 | 111 | 7,447 | 4,852 | 2,317 |
Net loss | $ (87,369) | $ (85,674) | $ (62,631) | $ (61,487) | $ (66,132) | $ (96,835) | $ (76,369) | $ (140,302) | $ (297,161) | $ (379,638) | $ (108,233) |
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (0.51) | $ (0.51) | $ (0.39) | $ (0.39) | $ (0.43) | $ (0.67) | $ (0.54) | $ (1.89) | $ (1.81) | $ (2.96) | $ (2.46) |
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders—basic and diluted (in shares) | 164,091,302 | 128,295,563 | 43,970,381 | ||||||||
Product | |||||||||||
Revenue: | |||||||||||
Total revenue | $ 224,650 | $ 221,117 | $ 223,170 | $ 219,052 | $ 201,472 | $ 160,076 | $ 158,213 | $ 153,536 | $ 887,989 | $ 673,297 | $ 413,910 |
Cost of revenue: | |||||||||||
Total cost of revenue | 41,068 | 66,680 | 83,217 | 85,162 | 76,187 | 62,593 | 58,403 | 52,210 | 276,127 | 249,393 | 133,541 |
Support, entitlements and other services | |||||||||||
Revenue: | |||||||||||
Total revenue | 79,098 | 68,296 | 63,574 | 56,500 | 50,986 | 45,594 | 41,001 | 35,025 | 267,468 | 172,606 | 89,500 |
Cost of revenue: | |||||||||||
Total cost of revenue | $ 32,197 | $ 28,935 | $ 25,311 | $ 23,460 | $ 21,330 | $ 20,613 | $ 18,443 | $ 17,552 | $ 109,903 | $ 77,938 | $ 37,246 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (297,161) | $ (379,638) | $ (108,233) |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized gain (loss) on available-for-sale securities, net of tax | (896) | (94) | 2 |
Comprehensive loss | $ (298,057) | $ (379,732) | $ (108,231) |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Increase (Decrease) in Stockholders' Deficit | |||||
Cumulative effect adjustment from adoption of ASU | $ 30,222 | $ 30,222 | |||
Temporary equity, shares outstanding, beginning balance (in shares) at Jul. 31, 2015 | 76,319,511 | ||||
Temporary equity, beginning balance at Jul. 31, 2015 | $ 310,379 | ||||
Temporary equity, shares outstanding, ending balance (in shares) at Jul. 31, 2016 | 76,319,511 | ||||
Temporary equity, ending balance at Jul. 31, 2016 | $ 310,379 | ||||
Common stock, shares outstanding, beginning balance (in shares) at Jul. 31, 2015 | 44,797,201 | ||||
Stockholders' (deficit) equity, beginning balance at Jul. 31, 2015 | (234,734) | $ 1 | $ 38,713 | $ (14) | (273,434) |
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock upon exercise of stock options (in shares) | 1,573,577 | ||||
Issuance of common stock upon exercise of stock options | 2,675 | 2,675 | |||
Vesting of early exercised stock options | 3,205 | 3,205 | |||
Stock-based compensation | 20,056 | 20,056 | |||
Repurchase of common stock (in shares) | (287,127) | ||||
Excess tax benefit from stock-based compensation | 980 | 980 | |||
Other comprehensive loss | 2 | 2 | |||
Net loss | (108,233) | (108,233) | |||
Common stock, shares outstanding, ending balance (in shares) at Jul. 31, 2016 | 46,083,651 | ||||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2016 | (285,827) | $ 1 | 65,629 | (12) | (351,445) |
Increase (Decrease) in Stockholders' Deficit | |||||
Cumulative effect adjustment from adoption of ASU | $ 114 | 114 | |||
Temporary equity, conversion of convertible preferred stock to common stock upon IPO (in shares) | 76,319,511 | ||||
Temporary equity, conversion of convertible preferred stock to common stock upon IPO | $ 310,379 | ||||
Temporary equity, shares outstanding, ending balance (in shares) at Jul. 31, 2017 | 0 | ||||
Temporary equity, ending balance at Jul. 31, 2017 | $ 0 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Conversion of convertible preferred stock to common stock upon initial public (in shares) | 76,319,511 | ||||
Conversion of convertible preferred stock to common stock upon IPO | 310,379 | $ 2 | 310,377 | ||
Issuance of class A common stock upon IPO, net of issuance costs (in shares) | 17,100,500 | ||||
Issuance of class A common stock upon IPO, net of issuance costs | 249,170 | $ 1 | 249,169 | ||
Issuance of common stock upon exercise of common stock warrants (in shares) | 775,554 | ||||
Issuance of common stock upon exercise of common stock warrants | 77 | 77 | |||
Issuance of common stock for stock awards, net of repurchases (in shares) | 10,871,714 | ||||
Issuance of common stock through employee equity incentive plans, net of repurchases | $ 14,956 | 14,956 | |||
Issuance of common stock upon exercise of stock options (in shares) | 4,786,381 | ||||
Issuance of common stock from ESPP purchase (in shares) | 1,246,054 | ||||
Issuance of common stock from ESPP purchase | $ 16,946 | 16,946 | |||
Issuance of common stock for acquisitions (in shares) | 2,239,536 | ||||
Issuance of common stock for acquisitions | 27,063 | 27,063 | |||
Vesting of early exercised stock options | 1,614 | 1,614 | |||
Stock-based compensation | 231,491 | 231,491 | |||
Reclassification of convertible preferred stock warrant liability to APIC upon IPO | 30,812 | 30,812 | |||
Other comprehensive loss | (94) | (94) | |||
Net loss | $ (379,638) | (379,638) | |||
Common stock, shares outstanding, ending balance (in shares) at Jul. 31, 2017 | 154,636,520 | 154,636,520 | |||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2017 | $ 217,063 | $ 4 | 948,134 | (106) | (730,969) |
Temporary equity, shares outstanding, ending balance (in shares) at Jul. 31, 2018 | 0 | ||||
Temporary equity, ending balance at Jul. 31, 2018 | $ 0 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock for stock awards, net of repurchases (in shares) | 14,492,922 | ||||
Issuance of common stock through employee equity incentive plans, net of repurchases | $ 33,037 | 33,037 | |||
Issuance of common stock upon exercise of stock options (in shares) | 8,672,623 | ||||
Issuance of common stock from ESPP purchase (in shares) | 2,417,850 | ||||
Issuance of common stock from ESPP purchase | $ 39,009 | 39,009 | |||
Issuance of common stock for acquisitions (in shares) | 1,310,790 | ||||
Issuance of common stock for acquisitions | 63,780 | 63,780 | |||
Vesting of early exercised stock options | 681 | 681 | |||
Stock-based compensation | 177,868 | 177,868 | |||
Equity component of convertible senior notes, net | 148,598 | 148,598 | |||
Purchase of bond hedges related to the convertible senior notes | (143,175) | (143,175) | |||
Reclassification of convertible preferred stock warrant liability to APIC upon IPO | 87,975 | 87,975 | |||
Other comprehensive loss | (896) | (896) | |||
Net loss | $ (297,161) | (297,161) | |||
Common stock, shares outstanding, ending balance (in shares) at Jul. 31, 2018 | 172,858,082 | 172,858,082 | |||
Stockholders' (deficit) equity, ending balance at Jul. 31, 2018 | $ 326,779 | $ 4 | $ 1,355,907 | $ (1,002) | $ (1,028,130) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (297,161) | $ (379,638) | $ (108,233) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 50,302 | 38,399 | 26,408 |
Stock-based compensation | 177,868 | 231,491 | 20,056 |
Amortization of debt discount and issuance cost | 14,685 | 0 | 0 |
Change in fair value of contingent consideration | (2,423) | 1,924 | 0 |
Change in fair value of convertible preferred stock warrant liability | 0 | 21,133 | (2,004) |
Loss on debt extinguishment | 0 | 3,320 | 0 |
Other | (962) | 764 | 129 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (79,273) | (67,382) | (71,406) |
Deferred commissions | (40,852) | (24,006) | (21,724) |
Prepaid expenses and other assets | (37,359) | (15,830) | (3,460) |
Accounts payable | (16,469) | 21,280 | 19,985 |
Accrued compensation and benefits | 27,877 | 32,687 | 10,709 |
Accrued expenses and other liabilities | 34,295 | 5,116 | (1,209) |
Deferred revenue | 262,027 | 144,564 | 134,385 |
Net cash provided by operating activities | 92,555 | 13,822 | 3,636 |
Cash flows from investing activities: | |||
Purchases of investments | (716,417) | (242,525) | (106,345) |
Maturities of investments | 297,461 | 84,156 | 102,135 |
Sales of investments | 0 | 32,640 | 0 |
Purchases of property and equipment | (62,372) | (50,181) | (42,294) |
Payments for business combinations, net of cash acquired | (22,227) | (184) | 0 |
Net cash used in investing activities | (503,555) | (176,094) | (46,504) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible senior notes, net | 563,587 | 0 | 0 |
Payments for convertible note hedges | (143,175) | 0 | 0 |
Proceeds from sales of shares through employee equity incentive plans, net of repurchases | 72,010 | 32,254 | 3,149 |
Proceeds from issuance of warrants | 87,975 | 0 | 0 |
Payment of debt in conjunction with business combinations | (1,696) | (7,124) | 0 |
Payments of offering costs | (85) | (1,717) | (3,186) |
Proceeds from initial public offering, net of underwriting discounts and commissions | 0 | 254,455 | 0 |
Repayment of senior notes | 0 | (75,000) | 0 |
Debt extinguishment costs | 0 | (1,580) | 0 |
Proceeds from issuance of senior notes, net | 0 | 0 | 73,255 |
Other | 0 | 134 | 980 |
Net cash provided by financing activities | 578,616 | 201,422 | 74,198 |
Net increase in cash and cash equivalents | 167,616 | 39,150 | 31,330 |
Cash and cash equivalents—beginning of period | 138,359 | 99,209 | 67,879 |
Cash and cash equivalents—end of period | 305,975 | 138,359 | 99,209 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes | 10,116 | 5,213 | 2,455 |
Cash paid for interest | 0 | 1,271 | 2,188 |
Supplemental disclosures of non-cash investing and financing information: | |||
Issuance of common stock for business combinations | 63,780 | 27,063 | 0 |
Purchases of property and equipment included in accounts payable and accrued liabilities | 13,444 | 5,591 | 5,007 |
Vesting of early exercised stock options | 681 | 1,614 | 3,205 |
Offering costs included in accounts payable | 0 | 85 | 902 |
Conversion of convertible preferred stock to common stock, net of issuance costs | 0 | 310,379 | 0 |
Reclassification of convertible preferred stock warrant liability to additional paid-in capital | $ 0 | $ 30,812 | $ 0 |
OVERVIEW AND SUMMARY OF SIGNIFI
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OVERVIEW 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 that digitizes traditional silos of enterprise computing, converging compute, virtualization, storage, networking, desktop, governance and security services in one integrated solution. We primarily sell our products and services to end customers through distributors, resellers and original equipment manufacturers ("OEMs") (collectively, "Partners"). Initial Public Offering In October 2016, we completed our initial public offering ("IPO") of Class A common stock, in which we sold 17,100,500 shares, including 2,230,500 shares pursuant to the underwriters’ over-allotment option. The shares were sold at an IPO price of $16.00 per share for net proceeds of $254.5 million , after deducting underwriting discounts and commissions of $19.2 million . Additionally, we incurred approximately $5.3 million offering costs. Immediately prior to the closing of our IPO, all outstanding shares of common stock were reclassified as Class B common stock, and all outstanding shares of our convertible preferred stock automatically converted into 76,319,511 shares of common stock on a one -to-one basis and then reclassified as shares of Class B common stock. Following the IPO, we have two classes of authorized common stock, Class A common stock, which entitles holders to one vote per share, and Class B common stock which entitles holders to 10 votes per share. Immediately prior to the closing of our IPO, 824,024 outstanding convertible preferred stock warrants automatically converted to common stock warrants, and then were reclassified as Class B common stock warrants. As a result of the automatic conversion of the convertible preferred stock warrants to Class B common stock warrants, we revalued the convertible preferred stock warrants as of the completion of the IPO and reclassified the outstanding preferred stock warrant liability balance to additional paid-in capital with no further remeasurements, as the common stock warrants are now deemed permanent equity. As of July 31, 2018 , there were 34,180 Class B common stock warrants outstanding. 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. Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications had no impact on the previously reported net loss or accumulated deficit. Effective August 1, 2017, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606"), as discussed in detail in Note 3. All amounts and disclosures set forth in this Annual Report on Form 10-K have been updated to comply with ASC 606, as indicated by the "as adjusted" note. Certain prior period amounts have been adjusted as a result of our adoption of ASC 606. Refer to "Recently Adopted Accounting Pronouncements" below for more information. 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 include, but are not limited to, the best estimate of selling prices for products and related support; useful lives of intangible assets and property and equipment; allowance for doubtful accounts; determination of fair value of common stock and convertible preferred stock, fair value of stock-based awards and convertible preferred stock warrant liability; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; fair value of contingent consideration in a business combination; sales commissions expense; 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. Concentration 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 Partners and occasionally directly to end customers. For the fiscal years ended July 31, 2016 , 2017 and 2018 , no end customer accounted for more than 10% of total revenue. 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 as of July 31, Fiscal Year Ended July 31, Partners 2016 As Adjusted (2) 2017 As Adjusted (2) 2018 2017 2018 Partner A 14 % (1) 10 % (1) 16 % Partner B 18 % 19 % 20 % 12 % 13 % Partner C 13 % 16 % 18 % 14 % 15 % Partner D 11 % 10 % (1) 20 % (1) Partner E 10 % (1) (1) (1) (1) Partner F 15 % 14 % 13 % 18 % 12 % (1) Less than 10% (2) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. Vendor Risk — We rely on a limited number of suppliers for our contract manufacturing and certain raw material components. In instances where suppliers fail to perform their obligations, we may be unable to find alternative suppliers or satisfactorily deliver our products to our customers on time. 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 Notes is determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. 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 doubtful accounts. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. 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 doubtful accounts 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 doubtful accounts 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 doubtful accounts are as follows: Fiscal Year Ended July 31, 2016 2017 2018 (in thousands) Allowance for doubtful accounts—beginning balance $ 410 $ 132 $ 132 Charged to provision for doubtful accounts (credit) (85 ) — 815 Write-offs (193 ) — (132 ) Allowance for doubtful accounts—ending balance $ 132 $ 132 $ 815 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. 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 in-process research and development ("IPR&D"), 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, such as IPR&D, 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 impairment losses during fiscal 2016 , 2017 or 2018 . Revenue Recognition Effective August 1, 2017, we adopted ASC 606 using the full retrospective method. Refer to Note 3 for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue and commissions. 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 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 contract manufacturers 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 contract manufacturers 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. 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 stock options and purchase rights issued to employees 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. We grant stock awards with service conditions only and with both service and performance 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 accelerated attribution method to recognize stock-based compensation expense related to employee stock awards that contain both service and performance 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. We determine the fair value of stock awards issued to nonemployees on the date of grant, utilizing the Black-Scholes option pricing model. Stock-based compensation expense for stock awards issued to nonemployees is recognized over the requisite service period or when it is probable that the performance condition will be satisfied. Nonemployee awards subject to vesting are periodically remeasured to current fair value over the vesting period. 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, 2016 , 2017 and 2018 , we recognized foreign currency losses of $1.5 million , $2.6 million and $3.6 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 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 are charged to sales and marketing expenses as incurred in the consolidated statements of operations. During the fiscal years ended July 31, 2016 , 2017 and 2018 , advertising expense was $6.5 million , $13.0 million and $14.6 million , respectively. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASC 606. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner which depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has issued several amendments to the standard, including clarifications on the disclosure of prior period performance obligations and remaining performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The new standard would have been effective for us beginning August 1, 2018, but early adoption as of the original effective date of August 1, 2017 was also permitted. We elected to early adopt the standard effective August 1, 2017 using the full retrospective method, which required a recast historical financial information to conform with the new standard. Refer to Note 3 for details of the impact to previously reported results. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, with further clarifications made recently with the issuance of ASU 2018-03 and 2018-04. These new standards require equity securities to be measured at fair value, with changes in fair value recognized through net income, which results in greater variability in our net income. We adopted the standard on January 1, 2018 and it did not have any impact on the consolidated financial statements, since other than our investments in money market funds, which are reported as part of cash and cash equivalents, we do not have any other investments that are classified as equity securities. There are no unrealized gains or losses related to our investments in money market funds, as the fair value is equal to the face value. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We adopted this ASU effective November 1, 2017 and our adoption did not have any impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), to clarify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU effective August 1, 2017 and our adoption did not have a material impact on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. We adopted this ASU effective August 1, 2017 and our adoption did not have a material impact on the consolidated financial statements. Recently Issued and Not Yet Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases, which requires recognition of right-to-use lease assets and lease liabilities for all leases, except for short-term leases, on the balance sheet of lessees. ASU 2016-02 is effective for us beginning August 1, 2019, with early adoption permitted. This new standard requires a modified retrospective transition approach and provides certain optional transition relief. We currently anticipate that the adoption of this standard will have a material impact on our consolidated balance sheets, given that we had operating lease commitments in excess of $100 million as of July 31, 2018 . We expect that most of our operating lease commitments will be subject to the new standard and recognized as lease liabilities and right-of-use assets upon adoption, which will increase the total assets and total liabilities reported. However, we do not anticipate that the adoption of this standard will have a material impact on our consolidated statements of operations, as the expense recognition under this new standard will be similar to current practice. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This new standard will require us to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for us beginning August 1, 2018, with early adoption permitted. We will adopt this standard in the first quarter of fiscal 2019 and anticipate an increase in deferred tax assets, which will be offset by a valuation allowance, thus resulting in an immaterial net impact to our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This new standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period amounts shown on the statement of cash flows. ASU 2016-18 is effective for us beginning August 1, 2018, with early adoption permitted. We do not believe that the adoption of this ASU will have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to nonemployees with the guidance applicable to grants to employees. Under the new standard, equity-classified share-based payment awards issued to nonemployees will be measured on the grant date, instead of the current requirement to remeasure the awards through the performance completion date. ASU 2018-07 is effective for us beginning August 1, 2019, with early adoption permitted. We do not believe that the adoption of this ASU will have a material impact on our consolidated financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We completed two acquisitions in each of fiscal 2017 and fiscal 2018 . The purchase price allocation for these acquisitions, discussed in detail below, reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income taxes, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized. Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. We determined the fair values of the intangible assets with the assistance of a valuation firm. The estimation of the fair value of the intangible assets required the use of valuation techniques and entailed consideration of all the relevant factors that might affect the fair value, such as present value factors and estimates of future revenues and costs. Our consolidated financial statements for the fiscal years ended July 31, 2017 and 2018 include the operations of the acquired companies from the dates the deals closed. Pro forma results of operations have not been presented because they are not material to our consolidated financial statements, either individually or in the aggregate. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The goodwill recognized in these acquisitions is primarily attributable to the synergies expected from the expanded market opportunities with our offerings and the knowledgeable and experienced workforce that joined us as part of the acquisitions. Goodwill will not be amortized, but will instead be tested for impairment annually, or more frequently if certain indicators of impairment are present. Fiscal 2017 Acquisitions Calm Acquisition On August 22, 2016, we completed the acquisition of all outstanding shares of Calm.io Pte. Ltd. ("Calm"), a company based in Singapore, which specialized in container and DevOps automation, for an aggregate purchase price of approximately $7.7 million , net of cash acquired ("Calm Acquisition"). Total consideration consisted of 528,517 shares of our common stock and approximately $1.4 million of cash. The purchase price allocation primarily included approximately $ 4.8 million of goodwill and approximately $ 4.0 million of intangible assets, which primarily consisted of developed technology, to be amortized over an estimated economic life of approximately 4.8 years . Goodwill is not expected to be deductible for income tax purposes. We incurred approximately $0.6 million of acquisition-related costs. PernixData Acquisition On September 6, 2016, we completed the acquisition of PernixData, Inc. ("PernixData"), a company based in the U.S., which specialized in scale-out data acceleration and analytics, for an aggregate purchase price of $23.0 million , net of cash acquired ("PernixData Acquisition"). Total consideration consisted of 1,711,019 shares of our common stock and contingent consideration. Total potential contingent payments amounted to $19.0 million and may be payable over the next three years upon the achievement of certain operating milestones. Up to $7.5 million of the contingent payments were deemed to be part of the purchase price, which were limited based on certain closing conditions, including PernixData’s working capital upon completion of the acquisition. Up to $11.5 million of the contingent payments also required future services to be provided to us by the related employees and are being recorded as compensation expense over the service period. The fair value of the contingent consideration considered to be part of the purchase price was $2.4 million as of the acquisition date and was net of expected limitations of $1.8 million due to closing conditions. We incurred approximately $0.7 million of acquisition-related costs. The purchase price allocation primarily included $11.9 million of goodwill, which is expected to be deductible for income tax purposes, and intangible assets, consisting of $16.1 million related to IPR&D, $3.6 million related to developed technology, which will be amortized over an estimated economic life of five years , and $4.6 million related to customer relationships, which will be amortized over an estimated economic life of six years . During the first quarter of fiscal 2018, the technology related to the IPR&D was completed and made generally available. As such, we started amortizing the IPR&D during the first quarter of fiscal 2018. We are amortizing developed technology using the straight-line method over a useful life of five years. Fiscal 2018 Acquisitions Minjar Acquisition On March 16, 2018, we completed the acquisition of Minjar, Inc. ("Minjar"), a privately held Delaware corporation with its offices in Bangalore, India ("Minjar Acquisition"). Minjar was a cloud technology solutions company, and the acquisition will complement and enhance our products, allowing us to offer customers new capabilities to better manage their multi-cloud deployments. At the close of the acquisition, all outstanding shares of Minjar capital stock and all in-the-money options and warrants to purchase Minjar capital stock were purchased or canceled in exchange for an aggregate purchase price of approximately $19.3 million , consisting of $18.8 million in cash and approximately $0.5 million of holdback liability. The holdback liability represents deferred payments to Minjar's former key employees to be released in installments during the two years following the date of acquisition. As the release of these deferred payments is not contingent upon the future and continued service, the $0.5 million holdback liability, which approximated fair value, was considered as part of the purchase price. Certain portions of the consideration for the acquisition had been placed in escrow to secure the indemnification obligations of certain Minjar security holders. In addition to the $19.3 million purchase price, we also entered into employee holdback or deferred payment arrangements with former employees of Minjar who joined us after the acquisition, totaling approximately $4.4 million . As payment of these deferred payments is contingent upon the continuous service of the employees, they are being accounted for as compensation over the required service period of two years. The preliminary purchase price allocation primarily includes approximately $18.0 million of goodwill, $7.0 million of intangible assets, which primarily consists of approximately $5.6 million related to developed technology and $1.4 million related to customer relationships, both of which will be amortized over an estimated economic life of five years , and $5.7 million of deferred income tax and other tax liabilities. Goodwill is not expected to be deductible for income tax purposes. We recognized approximately $0.6 million of acquisition-related costs, which were expensed as incurred, as general and administrative expenses in the consolidated statement of operations during the fiscal year ended July 31, 2018 . Netsil Acquisition On March 22, 2018, we completed the acquisition of Netsil Inc. ("Netsil"), a privately held Delaware corporation headquartered in San Francisco, California ("Netsil Acquisition"). This acquisition represents an opportunity for us to accelerate our ability to deliver native multi-cloud operations with the addition of application discovery and operations management. The aggregate purchase price of approximately $67.5 million consisted of approximately $3.7 million in cash and 1,206,364 unregistered shares of our Class A common stock with an aggregate fair value of approximately $63.8 million . The fair value of the shares of common stock issued was determined to be $52.87 per share, the closing price of our stock on March 22, 2018. Certain portions of the consideration for the acquisition, both cash and shares of our Class A common stock, have been placed in escrow to secure the indemnification obligations of certain Netsil security holders. We also entered into employee holdback or deferred payment arrangements with the founders of Netsil who joined us after the acquisition, whereby we issued 104,426 unregistered shares of our Class A common stock to the founders subject to their continuous employment with us for two years. The fair value of the Class A common stock issued pursuant to the holdback arrangements was approximately $5.5 million , or $52.87 per share, the closing price of our Class A common stock on March 22, 2018. This holdback is being accounted for as stock-based compensation over the required two -year service period. The preliminary purchase price allocation primarily includes approximately $53.1 million of goodwill, $19.0 million of intangible assets, primarily related to developed technology, which will be amortized over an estimated economic life of seven years , $2.6 million of deferred income tax liabilities, and $1.4 million of assumed debt. Goodwill is not expected to be deductible for income tax purposes. We recognized approximately $0.4 million of acquisition-related costs, which were expensed as incurred, as general and administrative expenses in the consolidated statement of operations during the fiscal year ended July 31, 2018 . The following table presents the preliminary aggregate purchase price allocation related to the acquisitions completed during fiscal 2017 and fiscal 2018 : As of July 31, 2017 2018 (in thousands) Goodwill $ 16,672 $ 71,087 Amortizable intangible assets 28,230 25,920 Tangible assets acquired 2,884 842 Liabilities assumed (16,988 ) (11,041 ) Total consideration $ 30,798 $ 86,808 |
REVENUE, DEFERRED REVENUE AND D
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS | 12 Months Ended |
Jul. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS | REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS Revenue Recognition Effective August 1, 2017, we adopted ASC 606 using the full retrospective method, which required a recast of historical financial information to conform with the standard. The most significant impact of ASC 606 on our historical financial information relates to the timing of revenue recognition for certain software licenses sold with PCS, for which we did not have vendor specific objective evidence ("VSOE") of fair value under the previous revenue recognition guidance. Under ASC 606, the requirement to have VSOE for undelivered elements was eliminated and we now recognize revenue for such software licenses upon transfer of control to the customer. In addition, the adoption of ASC 606 also resulted in differences in the timing of recognition of contract costs, such as sales commissions, as well as the corresponding impact to the provision for income taxes. The adoption of the standard had no significant impact on the provision for income taxes and had no impact on the net cash from or used in operating, investing or financing activities on the consolidated statements of cash flows. See "ASC 606 Adoption Impact to Previously Reported Results" below for the impact of the adoption of the standard on the consolidated financial statements. ASC 606 Adoption Impact to Previously Reported Results We adjusted our consolidated financial statements from amounts previously reported due to the adoption of ASC 606. Selected consolidated balance sheet line items, adjusted for the adoption of ASC 606, are as follows: As of July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) Assets Deferred commissions — current $ 27,679 $ (3,836 ) (1) $ 23,843 Deferred commissions — non-current 33,709 15,975 (1) 49,684 Total deferred commissions $ 61,388 $ 12,139 $ 73,527 Liabilities Deferred revenue — current $ 233,498 $ (63,375 ) (2) $ 170,123 Deferred revenue — non-current 292,573 (93,640 ) (2) 198,933 Total deferred revenue $ 526,071 $ (157,015 ) $ 369,056 Accrued expenses and other current liabilities $ 9,414 $ 293 (3) $ 9,707 Stockholders' Equity $ 48,202 $ 168,861 $ 217,063 (1) Impact of cumulative change in commissions expense (2) Impact of cumulative change in revenue (3) Impact of cumulative change in provision for income taxes Selected consolidated statement of operations line items, adjusted for the adoption of ASC 606, are as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands, except per share data) Revenue Product $ 350,798 $ 63,112 $ 413,910 Support, entitlements and other services 94,130 (4,630 ) 89,500 Total revenue $ 444,928 $ 58,482 $ 503,410 Gross profit $ 274,141 $ 58,482 $ 332,623 Operating expenses Sales and marketing expenses $ 288,493 $ (1,909 ) $ 286,584 Loss from operations $ (165,017 ) $ 60,391 $ (104,626 ) Net loss $ (168,499 ) $ 60,266 $ (108,233 ) Basic and diluted net loss per share $ (3.83 ) $ 1.37 $ (2.46 ) Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands, except per share data) Revenue Product $ 583,011 $ 90,286 $ 673,297 Support, entitlements and other services 183,858 (11,252 ) 172,606 Total revenue $ 766,869 $ 79,034 $ 845,903 Gross profit $ 439,538 $ 79,034 $ 518,572 Operating expenses Sales and marketing expenses $ 500,529 $ 492 $ 501,021 Loss from operations $ (426,951 ) $ 78,542 $ (348,409 ) Net loss $ (458,011 ) $ 78,373 $ (379,638 ) Basic and diluted net loss per share $ (3.57 ) $ 0.61 $ (2.96 ) Revenue by geographic location, based on bill-to location, adjusted for the adoption of ASC 606, is as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands) U.S. $ 280,800 $ 38,496 $ 319,296 Europe, the Middle East and Africa 81,320 (15,721 ) 65,599 Asia Pacific 63,610 33,113 96,723 Other Americas 19,198 2,594 21,792 Total revenue $ 444,928 $ 58,482 $ 503,410 Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) U.S. $ 462,770 $ 25,309 $ 488,079 Europe, the Middle East and Africa 139,170 (355 ) 138,815 Asia Pacific 131,921 54,943 186,864 Other Americas 33,008 (863 ) 32,145 Total revenue $ 766,869 $ 79,034 $ 845,903 Selected consolidated statement of cash flows line items, adjusted for the adoption of ASC 606, are as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands) Cash flows from operating activities: Net loss $ (168,499 ) $ 60,266 $ (108,233 ) Adjustments to reconcile net loss to net cash provided by operating activities: Deferred commissions $ (19,813 ) $ (1,911 ) $ (21,724 ) Accrued expenses and other liabilities $ (1,336 ) $ 127 $ (1,209 ) Deferred revenue $ 192,867 $ (58,482 ) $ 134,385 Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) Cash flows from operating activities: Net loss $ (458,011 ) $ 78,373 $ (379,638 ) Adjustments to reconcile net loss to net cash provided by operating activities: Deferred commissions $ (24,495 ) $ 489 $ (24,006 ) Accrued expenses and other liabilities $ 4,944 $ 172 $ 5,116 Deferred revenue $ 223,598 $ (79,034 ) $ 144,564 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, as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied with the transfer of a promised good or service to a customer. Disaggregation of Revenue 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. Software delivered on configured to order appliances is not portable to other appliances and has a term equal to the life of the associated appliance, while separately purchased software typically has a term of one to five years . For the fiscal year ended July 31, 2018 , the weighted average term for such software licenses was approximately 3.5 years . Configured to order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our OEM partners or directly from Nutanix. Our platform is typically purchased with one or more years of support and entitlements, which includes 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, 2016 2017 2018 (in thousands) Software revenue $ 287,603 $ 436,981 $ 630,675 Hardware revenue 126,307 236,316 257,314 Support, entitlements and other services revenue 89,500 172,606 267,468 Total revenue $ 503,410 $ 845,903 $ 1,155,457 Software revenue — A majority of our product revenue is generated from the sale of our enterprise cloud platform. We also sell renewals of previously purchased software licenses. Revenue from our software products is generally recognized upon transfer of control to the customer, which is typically upon shipment for sales including a hardware appliance, or upon making the software available to our customers when not sold with an appliance. Hardware revenue — In transactions where we deliver the hardware appliance, 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. Support, entitlements and other services revenue — We generate our support, entitlements and other services revenue primarily from software entitlement and support subscriptions, which include the right to software upgrades and enhancements as well as technical support. The majority of our product sales are sold in conjunction with software entitlement and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software entitlement and support contracts ratably over the contractual service period. The service period typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed. Contracts with multiple performance obligations — Some 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 SSP basis. For deliverables that are routinely sold separately, such as support and maintenance on our core offerings, SSP is determined by evaluating the standalone sales over the trailing 12 months. For those that are not sold routinely, SSP is determined based on 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 doubtful accounts. A receivable is recognized in the period goods are delivered or services are provided, or when the right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of July 31, 2017 and 2018 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 commission expense 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. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, the amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation 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. Deferred revenue — We record deferred revenue when cash payments are received in advance of performance. 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. Significant changes in the balance of deferred revenue (contract liability) and total deferred commissions (contract asset) for the periods presented are as follows: Deferred Revenue Deferred Commissions (in thousands) Balance as of July 31, 2016 $ 218,481 $ 49,522 Additions 317,170 101,152 Revenue/commissions recognized (172,606 ) (77,147 ) Assumed in a business combination 6,011 — Balance as of July 31, 2017 (1) 369,056 73,527 Additions 529,495 150,122 Revenue/commissions recognized (267,468 ) (109,270 ) Assumed in a business combination 124 — Balance as of July 31, 2018 $ 631,207 $ 114,379 (1) See details above for a summary of adjustments to deferred commissions and deferred revenue as a result of the adoption of ASC 606. Of the $114.4 million deferred commissions balance as of July 31, 2018 , we expect to recognize approximately 29% as commission expense over the next 12 months, and the remainder thereafter. During the fiscal year ended July 31, 2017 , we recognized revenue of approximately $101.6 million pertaining to amounts deferred as of July 31, 2016. During the fiscal year ended July 31, 2018 , we recognized revenue of approximately $170.1 million pertaining to amounts deferred as of July 31, 2017. The majority 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 $657.1 million as of July 31, 2018 , of which we expect to recognize approximately 45% over the next 12 months, and the remainder thereafter. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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, 2017 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 34,784 $ — $ — $ 34,784 Commercial paper — 23,041 — 23,041 Short-term investments: Corporate bonds — 160,634 — 160,634 Commercial paper — 36,084 — 36,084 U.S. government securities — 13,976 — 13,976 Total measured at fair value $ 34,784 $ 233,735 $ — $ 268,519 Cash 80,534 Total cash, cash equivalents and short-term investments $ 349,053 Financial Liabilities: Contingent consideration $ — $ — $ 4,295 $ 4,295 As of July 31, 2018 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 41,763 $ — $ — $ 41,763 Commercial paper — 77,818 — 77,818 U.S. government securities — 4,985 — 4,985 Short-term investments: Corporate bonds — 448,458 — 448,458 Commercial paper — 120,772 — 120,772 U.S. government securities — 59,098 — 59,098 Total measured at fair value 41,763 711,131 — 752,894 Cash 181,409 Total cash, cash equivalents and short-term investments $ 934,303 Financial Liabilities: Contingent consideration $ — $ — $ 1,872 $ 1,872 Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value, with the exception of the 0% Convertible Senior Notes, due in 2023 (the "Notes"). Financial instruments that are not recorded at fair value 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, 2017 As of July 31, 2018 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in thousands) Convertible senior notes, net $ — $ — $ 429,598 $ 685,527 The carrying value of the Notes as of July 31, 2018 was net of the unamortized debt discount of $137.7 million and unamortized debt issuance costs of $7.7 million . The total estimated fair value of the Notes was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. We consider the fair value of the Notes to be a Level 2 measurement due to the limited trading activity. A summary of the changes in the fair value of our contingent consideration, characterized as Level 3 in the fair value hierarchy, is as follows: Fiscal Year Ended July 31, 2017 2018 (in thousands) Contingent consideration—beginning balance $ — $ 4,295 Assumed in a business combination 2,371 — Change in fair value (1) 1,924 (2,423 ) Contingent consideration—ending balance $ 4,295 $ 1,872 (1) Recognized in the consolidated statements of operations within general and administrative expenses. We remeasure the fair value of our Level 3 contingent consideration liability using a Monte Carlo simulation on projected future payments. The fair value is determined by calculating the net present value of the expected payments using significant inputs that are not observable in the market, including the probability of achieving the milestone, estimated bookings and discount rates. The fair value of the contingent consideration will increase or decrease according to the movement of the inputs. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Short-Term Investments The amortized cost of our short-term investments approximates their fair value. As of July 31, 2017 and 2018 , unrealized gains and losses from our short-term investments were not material. As of July 31, 2017 and 2018 , securities that were in an unrealized loss position for more than 12 months were not material. Unrealized losses related to short-term investments are due to interest rate fluctuations, as opposed to credit quality. In addition, unless we need cash to support our current operations, we do not intend to sell and it is not likely that we would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. As a result, at July 31, 2017 and 2018 , there were no other-than-temporary impairments 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 July 31, 2018 (in thousands) Due within one year $ 463,940 Due in one year through three years 164,388 Total $ 628,328 Property and Equipment, Net Property and equipment, net consists of the following: Estimated Useful Life As of July 31, 2017 2018 (in months) (in thousands) Computer, production, engineering, and other equipment 36 $ 85,280 $ 131,805 Demonstration units 12 46,387 53,547 Leasehold improvements (1) 10,562 19,916 Furniture and fixtures 60 4,744 7,636 Total property and equipment, gross 146,973 212,904 Less: Accumulated depreciation and amortization (88,901 ) (127,793 ) Total property and equipment, net $ 58,072 $ 85,111 (1) Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. Depreciation expense related to our property and equipment was $26.4 million , $36.2 million and $43.7 million for the fiscal years ended July 31, 2016 , 2017 and 2018 , respectively. Intangible Assets, Net Intangible assets, net consists of the following: As of July 31, 2017 2018 (in thousands) Indefinite-lived intangible asset: In-process R&D (1) $ 16,100 $ — Finite-lived intangible assets: Developed technology (1) 7,300 47,500 Customer relationships 4,830 6,650 Total finite-lived intangible assets, gross 12,130 54,150 Total intangible assets, gross 28,230 54,150 Less: Accumulated amortization of developed technology (1,314 ) (6,956 ) Accumulated amortization of customer relationships (915 ) (1,828 ) Total accumulated amortization (2,229 ) (8,784 ) Intangible assets, net $ 26,001 $ 45,366 (1) We started amortizing in-process R&D during the first quarter of fiscal 2018, as the related technology was completed and made generally available in the first quarter of fiscal 2018. We are amortizing developed technology using the straight-line method over a useful life of five years. Based on the foregoing, the balance of in-process R&D is now presented as part of developed technology as of July 31, 2018. The amortization expense related to our finite-lived 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. The changes in the net book value of intangible assets, net are as follows: As of July 31, 2017 2018 (in thousands) Intangible assets, net—beginning balance $ — $ 26,001 Acquired intangible assets 28,230 25,920 Amortization of intangible assets (1) (2,229 ) (6,555 ) Intangible assets, net—ending balance $ 26,001 $ 45,366 (1) Represents amortization expense related to finite-lived intangible assets recognized during the year in the consolidated statements of operations, within product cost of revenue and sales and marketing expenses. The estimated future amortization expense of our finite-lived intangible assets is as follows: Fiscal Year Ending July 31: Amount (in thousands) 2019 $ 9,551 2020 9,511 2021 9,511 2022 8,314 2023 3,971 Thereafter 4,508 Total $ 45,366 Goodwill The changes in the carrying amount of goodwill are as follows: Carrying Amount (in thousands) Balance at July 31, 2016 $ — Acquired in Calm Acquisition 4,819 Acquired in PernixData Acquisition 11,853 Balance at July 31, 2017 16,672 Acquired in Netsil Acquisition 53,085 Acquired in Minjar Acquisition 18,002 Balance at July 31, 2018 $ 87,759 Other Assets—Non-Current Other assets—non-current consists of the following: As of July 31, 2017 2018 (in thousands) Other tax assets—non-current $ — $ 30,927 Deferred tax assets—non-current 3,420 2,860 Other 4,229 4,068 Total other assets—non-current $ 7,649 $ 37,855 Other tax assets—non-current as of July 31, 2018 represents a receivable associated with alternative minimum tax credit carryforwards which will be refundable as a result of the Tax Cuts and Jobs Act. For additional details, refer to Note 11. Accrued Compensation and Benefits Accrued compensation and benefits consists of the following: As of July 31, 2017 2018 (in thousands) Contributions to ESPP withheld $ 14,371 $ 21,931 Accrued commissions 20,388 21,660 Accrued bonus 7,342 12,129 Accrued vacation 6,286 10,548 Payroll taxes payable 3,434 9,563 Other 5,700 9,567 Total accrued compensation and benefits $ 57,521 $ 85,398 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consists of the following: As of July 31, 2017 2018 (in thousands) Income taxes payable (1)(2) $ 3,873 $ 20,863 Accrued professional services 4,167 5,838 Other 1,667 4,981 Total accrued expenses and other current liabilities $ 9,707 $ 31,682 (1) Balance as of July 31, 2017 was adjusted to reflect the impact of the adoption of ASC 606 on income taxes. See Note 3 for a summary of adjustments. (2) The increase in income taxes payable during the fiscal year ended July 31, 2018 was due primarily to a payable related to the alternative minimum tax associated with the migration of certain intangible assets. For additional details, refer to Note 11. |
DEBT
DEBT | 12 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | Senior Notes In April 2016, we issued an aggregate principal amount of $75.0 million of senior notes due on April 15, 2019 (the "2019 Notes") to a lender. The 2019 Notes contained a guaranteed minimum return to the holder of the 2019 Notes (the "Guaranteed Minimum Return"). In September 2016, we fully repaid all outstanding principal balance of the 2019 Notes and incurred approximately $3.3 million of loss on debt extinguishment, which consisted of $1.7 million of unamortized debt issuance costs and $1.6 million of debt extinguishment costs primarily related to the Guaranteed Minimum Return. Convertible Senior Notes In January 2018, we issued Convertible Senior Notes with a 0% interest rate for an aggregate principal amount of $575.0 million , due in 2023 (the "Notes"), in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. This included $75.0 million in aggregate principal amount of the 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 Notes. The total net proceeds from the 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 Notes do not bear any interest and will mature on January 15, 2023, unless earlier converted or repurchased in accordance with their terms. The 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 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 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 $48.89 on July 31, 2018 , the if-converted value of the Notes was greater than the principal amount. However, since 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, 2018 , the Notes were not convertible during the fiscal quarter ending on July 31, 2018 . 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 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 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 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" per the indenture governing the 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 Notes at a repurchase price equal to 100% of the principal amount of the repurchased Notes, plus accrued and unpaid interest. We may not redeem the Notes prior to the maturity date, and no sinking fund is provided for the Notes. In accounting for the issuance of the Notes, we separated the 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 Notes. The difference between the principal amount of the Notes and the liability component (the "debt discount") is amortized to interest expense using the effective interest method over the term of the Notes. The equity component of the 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 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 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 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 Notes consisted of the following: As of July 31, 2018 (in thousands) Principal amounts: Principal $ 575,000 Unamortized debt discount (1) (137,719 ) Unamortized debt issuance costs (1) (7,683 ) Net carrying amount $ 429,598 Carrying amount of equity component (2) $ 148,598 (1) Included in the consolidated balance sheets within "Convertible senior notes, net" and amortized over the remaining life of the 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, 2018 , the remaining life of the Notes was approximately 53 months. The following table sets forth the total interest expense recognized related to the Notes: Fiscal Year Ended July 31, 2018 (in thousands) Interest expense related to amortization of debt discount $ 13,909 Interest expense related to amortization of debt issuance costs 776 Total interest expense $ 14,685 Note Hedges and Warrants Concurrently with the offering of the 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 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 sheet as of July 31, 2018 . The fair value of the note hedges and warrants are not remeasured each reporting period. The amounts paid for the note hedges are tax deductible expenses, while the proceeds received from the warrants are not taxable. Impact to Earnings per Share The Notes will have no impact to 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 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 Notes when the price of our Class A common stock exceeds the conversion price. Under this method, the cumulative dilutive effect of the 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 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 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 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases We have commitments for future payments related to our office facility leases and other contractual obligations. We lease our office facilities under non-cancelable operating lease agreements expiring through 2024. Certain of these lease agreements have free or escalating rent payments. We recognize rent expense under such agreements on a straight-line basis over the lease term, with any free or escalating rent payments amortized as a reduction or addition of rent expense over the lease term. Future minimum payments due under operating leases as of July 31, 2018 are as follows: Fiscal Year Ending July 31: Amount (in thousands) 2019 $ 26,158 2020 23,849 2021 21,749 2022 20,739 2023 17,115 Thereafter 12,718 Total $ 122,328 Rent expense incurred under operating leases was $7.6 million , $12.7 million and $19.0 million for the fiscal years ended July 31, 2016 , 2017 and 2018 , respectively. Purchase Commitments In the normal course of business, we make commitments with our third-party hardware product manufacturers to manufacture our inventory and non-standard components based on our forecasts. These commitments consist of obligations for on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge for firm, non-cancelable and unconditional purchase commitments with our third-party hardware product manufacturers for non-standard components when and if quantities exceed our future demand forecasts through a charge to cost of product sales. As of July 31, 2018 , we had approximately $23.1 million in the form of guarantees to our contract manufacturers related to certain components and approximately $36.7 million of other non-cancelable purchase commitments pertaining to our normal operations. 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. Litigation From time to time, we may become involved in various litigation and administrative proceedings relating to claims arising from our operations in the normal course of business. Management is not currently aware of any matters that may have a material adverse impact on our business, financial position, results of operations or cash flows. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Preferred Stock Immediately prior to the closing of our IPO, we filed an Amended and Restated Certificate of Incorporation, which authorized the issuance of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our Board of Directors (the "Board"). As of July 31, 2018 , there were 200,000,000 shares of preferred stock authorized with a par value of $0.000025 and no shares of preferred stock issued and outstanding. Common Stock In connection with our IPO, we established two classes of authorized common stock, Class A common stock and Class B common stock. All shares of common stock outstanding immediately prior to the IPO, including shares of common stock issued upon the conversion of the Convertible Preferred Stock, were converted into an equivalent number of shares of Class B common stock. As of July 31, 2018 , we had 1,000,000,000 shares of Class A common stock authorized with a par value of $0.000025 per share and 200,000,000 shares of Class B common stock authorized with a par value of $0.000025 per share. As of July 31, 2018 , we had 135,109,672 shares of Class A common stock issued and outstanding and 37,748,410 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 ten 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 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. Common Stock Reserved for Issuance As of July 31, 2018 , we had reserved shares of common stock for future issuance as follows: As of July 31, 2018 Shares reserved for future equity grants 11,169,061 Shares underlying outstanding stock options 11,332,554 Shares underlying outstanding restricted stock units 23,597,499 Shares reserved for future employee stock purchase plan awards 1,682,461 Shares underlying outstanding common stock warrants 34,180 Total 47,815,755 |
EQUITY AWARD PLANS
EQUITY AWARD PLANS | 12 Months Ended |
Jul. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY AWARD PLANS | EQUITY AWARD PLANS Stock Plans In June 2010, we adopted the 2010 Stock Plan ("2010 Plan"), in December 2011, we adopted the 2011 Stock Plan ("2011 Plan"), and in December 2015, the Board adopted the 2016 Equity Incentive Plan ("2016 Plan"), which was amended in September 2016 (collectively, the "Stock Plans"). Our stockholders approved the 2016 Plan in March 2016 and it became effective in connection with our 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 restricted stock units ("RSUs"), or until those stock awards become vested or expired by their terms. Under the 2016 Plan, we may grant incentive stock options ("ISOs"), non-statutory stock options ("NSOs"), restricted stock, RSUs and stock appreciation rights to employees, directors and consultants. We initially reserved 22,400,000 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: 18,000,000 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, 2017, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 7,731,826 shares pursuant to these provisions. As of July 31, 2018 , we had reserved a total of 46,133,294 shares for the issuance of equity awards under the Stock Plans, of which 11,169,061 shares were still available for grant. On August 1, 2018, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 8,642,904 shares pursuant to the automatic increase provisions. Restricted Stock Units Below is a summary of RSU activity under the Stock Plans: Fiscal Year Ended July 31, 2017 2018 Number of Grant Date Fair Value per Share Number of Grant Date Fair Value per Share Outstanding at beginning of period 12,265,369 $ 13.23 17,376,090 $ 18.85 Granted 12,986,597 $ 21.84 14,947,403 $ 39.44 Released (6,146,169 ) $ 15.63 (5,823,800 ) $ 19.96 Canceled/forfeited (1,729,707 ) $ 13.57 (2,902,194 ) $ 22.34 Outstanding at end of period 17,376,090 $ 18.85 23,597,499 $ 31.20 Performance RSUs — We grant RSUs that contain 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 liquidity events, including the expiration of a lock-up period established in connection with the IPO and/or specified 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. During the first quarter of fiscal 2017, we began to recognize stock-based compensation expense related to certain Performance RSUs with liquidity event performance conditions, as the satisfaction of the performance conditions for vesting became probable. 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 years from the date of grant. The term of an ISO grant to a 10% stockholder will not exceed five years 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. The stock option activity under the Stock Plans is as follows: Fiscal Year Ended July 31, 2017 2018 Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) (in years) (in thousands) Outstanding at beginning of period 26,166,968 (1) $ 4.39 7.5 $ 208,101 20,334,531 $ 4.59 6.4 $ 338,787 Options granted 1,047,950 $ 12.14 — $ — Options exercised (4,786,381 ) $ 3.27 (8,672,623 ) $ 3.81 Options canceled/forfeited (2,094,006 ) $ 8.89 (329,354 ) $ 6.63 Outstanding at end of period 20,334,531 $ 4.59 6.4 $ 338,787 11,332,554 $ 5.12 5.6 $ 496,022 Exercisable at end of period 19,645,676 $ 4.43 6.3 $ 330,486 11,159,045 $ 5.01 5.5 $ 489,682 Vested and expected to vest at end of period 20,334,531 $ 4.59 6.4 $ 338,787 11,332,554 $ 5.12 5.6 $ 496,022 (1) Includes 455,000 stock options with both service and performance conditions with a weighted average fair value per share of $3.78 (the "Performance Stock Options"). Vesting of the Performance Stock Options was subject to continuous service with us (the "service condition") and satisfaction of certain liquidity events (the "performance condition"). We recognized cumulative stock-based compensation expense related to the Performance Stock Options in the first quarter of fiscal 2017, as the performance condition was met upon the successful completion of our IPO. The cumulative stock-based compensation expense recorded in the first quarter of fiscal 2017 was for the portion of the awards for which the relevant service condition had been satisfied and the remaining expense is being recognized over the remaining service period. Stock options exercisable as of July 31, 2017 includes 15,241,715 vested options and 4,403,961 unvested options with an early exercise provision. Stock options exercisable as of July 31, 2018 includes 9,660,757 vested options and 1,498,288 unvested options with an early exercise provision. The weighted average grant date fair value per share of stock options granted was $6.36 and $6.41 for the fiscal years ended July 31, 2016 and 2017, respectively. There were no options granted during fiscal 2018. The aggregate intrinsic value of stock options exercised during the fiscal years ended July 31, 2016 , 2017 and 2018 was $18.3 million , $73.9 million and $289.4 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 $3.5 million , $15.6 million and $33.1 million for the fiscal years ended July 31, 2016 , 2017 and 2018 , respectively. The total grant date fair value of stock options vested was $23.9 million , $16.1 million and $11.5 million for the fiscal years ended July 31, 2016 , 2017 and 2018 , respectively. The vested and expected to vest amounts included in the table above exclude 243,148 and 47,691 shares of early exercised stock options as of July 31, 2017 and 2018 , respectively. Employee Stock Purchase Plan In December 2015, the Board adopted the 2016 ESPP, which was subsequently amended in January 2016 and September 2016 and approved by our stockholders in March 2016. The 2016 ESPP became effective in connection with our IPO. A total of 3,800,000 shares of Class A common stock were initially reserved for issuance under the 2016 ESPP. The number of shares of Class A common stock available for sale under the 2016 ESPP also includes an annual increase on the first day of each fiscal year, beginning in fiscal 2018, equal to the lesser of: 3,800,000 shares, 1% 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, 2017, the number of shares of Class A common stock available for issuance under 2016 ESPP increased by 1,546,365 shares pursuant to these provisions. 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 12 -month offering periods generally beginning in March and September of each year, and each offering period consists of two six-month purchase periods. The first offering period began in September 2016. 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, 2018 , 2,417,850 shares of common stock were purchased under the 2016 ESPP for an aggregate amount of $39.0 million . As of July 31, 2018 , 1,682,461 shares were available for future issuance under the 2016 ESPP. On August 1, 2018, the number of shares of Class A common stock available for issuance under the 2016 ESPP increased by 1,728,580 shares pursuant to the automatic increase provisions noted above. 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, 2017 2018 Expected term (in years) 0.75 0.75 Risk-free interest rate 0.6 % 1.4 % Volatility 51.0 % 49.8 % 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, 2016 2017 2018 (in thousands) Cost of revenue: Product $ 391 $ 3,066 $ 2,580 Support, entitlements and other services 968 10,411 8,945 Sales and marketing 8,006 78,117 65,060 Research and development 6,259 109,044 74,389 General and administrative 4,432 30,853 26,894 Total stock-based compensation expense $ 20,056 $ 231,491 $ 177,868 Stock-based compensation expense for the fiscal year ended July 31, 2017 included cumulative stock-compensation expense related to stock awards with performance conditions, for which vesting was deemed probable in the first quarter of fiscal 2017 upon the successful completion of our IPO. Prior to fiscal 2017, no expense was recognized related to these stock awards, as vesting was not deemed probable. The cumulative stock-based compensation expense recorded in the first quarter of fiscal 2017 related to the portion of the awards for which the relevant service condition had been satisfied and we have continued to recognize the expense over the remaining service period. Stock-based compensation expense related to stock awards without performance conditions is recognized on a straight-line basis over the requisite service period. As of July 31, 2018 , unrecognized stock-based compensation expense related to the outstanding stock awards was approximately $647.9 million and is expected to be recognized over a weighted average period of approximately 2.7 years. Determination of Fair Value The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option pricing model. Compensation expense related to options granted to nonemployees is recognized as the equity instruments vest, and such options are revalued at each reporting date. As a result, compensation expense related to unvested options granted to nonemployees fluctuates as the fair value of our common stock fluctuates. The valuation model for stock-based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility of our common stock, risk-free interest rate and expected dividend yield. The fair value of our stock options was estimated using the following weighted average assumptions: Fiscal Year Ended July 31, 2016 2017 Fair value of common stock $ 14.81 $ 12.14 Expected term (in years) 6.1 6.1 Risk-free interest rate 1.6 % 1.3 % Volatility 42 % 52 % Dividend yield — % — % We did not grant any stock options during fiscal 2018. The fair value of each grant of stock options was determined using the Black-Scholes option pricing model and the assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. Fair Value of Common Stock — Prior to our IPO, the fair value of the common stock underlying our stock options was determined by our Board. The valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . The Board, with input from management, exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our common stock at each grant date, including but not limited to, (i) contemporaneous valuations of common stock performed by unrelated third-party specialists; (ii) recent private stock sales transactions; (iii) the prices, rights, preferences and privileges of our convertible preferred stock relative to those of our common stock; (iv) the lack of marketability of our common stock; (v) developments in the business; (vi) the likelihood of achieving a liquidity event, such as an IPO or a merger or acquisition of our business, given prevailing market conditions; (vii) the market performance of comparable publicly traded companies; (viii) our actual operating and financial performance; (ix) U.S. and global capital market conditions; (x) the illiquidity of stock-based awards involving securities in a private company; (xi) our stage of development; and (xii) our history and the timing of the introduction of new products and services. Subsequent to our IPO, we use the market closing price for our Class A common stock as reported on the NASDAQ Stock Market on the date of grant. Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding. For option grants that are considered to be "plain vanilla," we determine the expected term using the simplified method as provided by the Securities and Exchange Commission. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. Risk-Free Interest Rate — The risk-free interest rate is based on U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Expected Volatility — Since we do not have a long trading history of our common stock, the expected volatility was derived from the average historical stock volatilities of several unrelated public companies within the industry that we consider to be comparable to our business over a period equivalent to the expected term of the stock option grants. Dividend Rate — The expected dividend was assumed to be zero , as we have never paid dividends and have no current plans to do so. |
NET LOSS AND UNAUDITED NET LOSS
NET LOSS AND UNAUDITED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | 12 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS AND UNAUDITED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS 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 by dividing net income (loss) by 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 for the period, as their effect would be antidilutive. 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. Net Loss Per Share Attributable to Class A and Class B Common Stockholders The computation of basic and diluted net loss per share is as follows: Fiscal Year Ended July 31, 2016 As Adjusted (1) 2017 As Adjusted (1) 2018 (in thousands, except share and per share data) Numerator: Net loss $ (108,233 ) $ (379,638 ) $ (297,161 ) Denominator: Weighted average shares—basic and diluted 43,970,381 128,295,563 164,091,302 Net loss per share—basic and diluted $ (2.46 ) $ (2.96 ) $ (1.81 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. The potential shares of common stock that would have been 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: As of July 31, 2016 2017 2018 Convertible preferred stock 76,319,511 — — Outstanding stock options and RSUs 38,432,337 37,710,621 34,930,053 Employee stock purchase plan — 1,447,385 1,310,653 Common stock subject to repurchase 954,215 243,148 47,691 Contingently issuable shares pursuant to a business combination — — 276,625 Common stock warrants 824,094 34,180 34,180 Total 116,530,157 39,435,334 36,599,202 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Taxes Loss before provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2016 (1) 2017 (1) 2018 (in thousands) Domestic $ (67,776 ) $ (304,363 ) $ (201,666 ) Foreign (38,140 ) (70,423 ) (88,048 ) Loss before provision for income taxes $ (105,916 ) $ (374,786 ) $ (289,714 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. Provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2016 (1) 2017 (1) 2018 (in thousands) Current: U.S. federal $ — $ — $ 2,059 State and local 140 193 429 Foreign 3,172 8,196 8,541 Total current taxes 3,312 8,389 11,029 Deferred: U.S. federal — (1,342 ) (3,387 ) State and local — 13 (718 ) Foreign (995 ) (2,208 ) 523 Total deferred taxes (995 ) (3,537 ) (3,582 ) Provision for income taxes $ 2,317 $ 4,852 $ 7,447 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory income tax rate of 26.1% 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, 2016 (1) 2017 (1) 2018 (in thousands) U.S. tax reform impact $ — $ — $ 93,352 U.S. federal income tax at statutory rate (36,011 ) (127,427 ) (75,779 ) Stock-based compensation 3,655 6,701 (73,631 ) Effect of foreign operations 15,144 16,891 26,117 Change in valuation allowance 19,268 86,941 25,274 Transfer pricing adjustments — 11,822 4,584 Intangible asset migration — — 4,461 Non-deductible expenses 802 1,693 2,115 State income taxes 140 206 (290 ) Warrant revaluation (681 ) 7,185 — Other — 840 1,244 Total $ 2,317 $ 4,852 $ 7,447 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. During the fiscal year ended July 31, 2016, we early adopted ASU 2015-17 on a prospective basis. As a result, we released $3.3 million of our non-current deferred tax assets, which are reported within other assets—non-current on the consolidated balance sheets, and $3.3 million of our current deferred tax liabilities, which are reported within accrued expenses and other liabilities on the consolidated balance sheets. We did not retrospectively adjust prior periods. During the fiscal year ended July 31, 2017, our provision for income taxes was primarily attributable to foreign tax provisions in certain foreign jurisdictions in which we conduct business. During the fiscal year ended July 31, 2018, our provision for income taxes was primarily attributable to the alternative minimum tax in the U.S. related to the migration of certain intangible assets and foreign tax provisions in certain foreign jurisdictions in which we conduct business, partially offset by a partial valuation allowance release in the U.S. due to acquisitions completed during fiscal 2018. The temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of July 31, 2017 (1) 2018 (in thousands) Deferred tax assets: Net operating loss carryforward $ 135,929 $ 162,914 Tax credit carryforward 13,100 47,839 Deferred revenue 2,378 27,577 Stock-based compensation expense 27,512 21,252 Accruals and reserves 7,427 8,370 Property and equipment 1,118 — Total deferred tax assets 187,464 267,952 Deferred tax liabilities: Deferred commission expense (22,535 ) (27,829 ) Goodwill and intangible assets (483 ) (5,909 ) Property and equipment — (3,870 ) Other (75 ) (497 ) Total deferred tax liabilities (23,093 ) (38,105 ) Valuation allowance (161,195 ) (226,987 ) Net deferred tax assets $ 3,176 $ 2,860 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. 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 $227.0 million as of July 31, 2018 . The net increase in the total valuation allowance for the fiscal years ended July 31, 2017 and 2018 was $69.8 million and $65.8 million , respectively. As of July 31, 2018 , we had approximately $853.2 million of federal net operating loss carryforwards and $562.1 million of state net operating loss carryforwards available to reduce future taxable income, which will begin to expire in 2030. In addition, we had approximately $43.3 million of federal research credit carryforwards and $30.7 million of state research credit carryforwards. The federal credits will begin to expire in 2030 and the state credits can be carried forward indefinitely. 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, 2018 , we held an aggregate of $146.5 million in cash and cash equivalents in our foreign subsidiaries, of which $122.6 million was denominated in U.S. dollars. None of our short-term investments were held in foreign subsidiaries as of July 31, 2018 . 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. During the fiscal year ended July 31, 2018, we undertook an internal restructuring to align certain intangible assets with our U.S. business. These intangible assets will be subject to U.S. tax amortization. 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, 2017 2018 (in thousands) Balance at the beginning of the year $ 19,711 $ 42,655 Increases related to current year tax positions 22,571 58,727 Increases related to prior year tax positions 373 4,893 Decreases related to prior year tax positions — (14,559 ) Balance at the end of the year $ 42,655 $ 91,716 During the fiscal year ended July 31, 2018 , the increase in unrecognized tax positions was primarily attributable to federal and state research and development credits, intercompany charges and business combinations in fiscal 2018. As of July 31, 2018 , if uncertain tax positions are fully recognized in the future, it would result in a $7.4 million impact to our effective tax rate, 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, 2018 , we had recognized immaterial 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 and do not anticipate a significant impact to the gross unrecognized tax benefits within the next 12 months related to these years. Impact of U.S. Federal Income Tax Reform In December 2017, the U.S. Congress passed and the President signed the Tax Cuts and Jobs Act ("TCJA"), which includes a broad range of tax reform proposals affecting businesses, including a federal corporate rate reduction from 35% to 21%, effective January 1, 2018, limitations on the deductibility of interest expense and executive compensation, the creation of new minimum taxes, such as the base erosion anti-abuse tax ("BEAT") and Global Intangible Low Taxed Income ("GILTI") tax and a new minimum tax on certain foreign earnings. As a result, we are required to remeasure our U.S. deferred tax assets and liabilities at the new tax rate. Our U.S. operation is in a net deferred tax asset position, offset by a full valuation allowance. We reduced our net deferred tax assets and the corresponding valuation allowance by $93.8 million . The TCJA includes a one-time mandatory repatriation transition tax on the net accumulated earnings and profits of a U.S. taxpayer’s foreign subsidiaries. We have performed an earnings and profits analysis, and as a result of our overall deficit in net accumulated earnings and profits, there will be no transition tax income tax effect in the current period. The income tax benefit and provision for the fiscal year ended July 31, 2018 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 have not yet made a policy election with respect to our treatment of any potential GILTI tax. Companies can either account for taxes on GILTI as incurred or recognize deferred taxes when basis differences exist that are expected to affect the amount of the GILTI inclusion upon reversal. We are still in the process of analyzing the provisions of the TCJA associated with GILTI and the expected impact GILTI will have on us in the future. Pursuant to SEC Staff Accounting Bulletin 118, which provides guidance on accounting for the tax effects of the TJCA, we will continue to evaluate the impact of various domestic and international provisions of the TCJA, as well as the impact of additional guidance that may be issued, to assess the full effects on our financial results. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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 area by bill-to location: Fiscal Year Ended July 31, 2016 As Adjusted (1) 2017 As Adjusted (1) 2018 (in thousands) U.S. $ 319,296 $ 488,079 $ 648,805 Europe, the Middle East and Africa 65,599 138,815 224,392 Asia Pacific 96,723 186,864 240,247 Other Americas 21,792 32,145 42,013 Total revenue $ 503,410 $ 845,903 $ 1,155,457 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. Pursuant to our arrangement with one of our OEMs, prior to the fourth quarter of fiscal 2017, billings to this OEM were entirely attributed to Asia Pacific. Beginning in the fourth quarter of fiscal 2017, billings to this OEM were allocated to various geographic locations. As of July 31, 2017 and 2018 , $63.3 million and $130.0 million , respectively, of our long-lived assets, net were located in the United States. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED-PARTY TRANSACTIONS We enter into various transactions with related parties in the normal course of business. During the fiscal years ended July 31, 2016 , 2017 and 2018 , we did not have any material related party transactions. In connection with the PernixData Acquisition, entities affiliated with Lightspeed Venture Partners, which owned approximately 36.7% of our outstanding Convertible Preferred Stock as of July 31, 2016, owned approximately 26.4% of the outstanding capital stock of PernixData immediately prior to the completion of the PernixData Acquisition. One member of our Board is affiliated with Lightspeed Venture Partners. As of July 31, 2018 , entities affiliated with Lightspeed Venture Partners owned approximately 6.7% of our total outstanding Class A and Class B common stock. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Jul. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following sets forth selected unaudited quarterly consolidated statements of operations data for each of the eight quarters in the period ended July 31, 2018 . The information for each of these quarters has been prepared on a basis consistent with our audited annual consolidated financial statements included elsewhere in this report and, in the opinion of management, includes all adjustments of a normal, recurring nature that are necessary for the fair presentation of the results of operations for these periods in accordance with U.S. GAAP. This data should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this report. These historical quarterly operating results are not necessarily indicative of the results that may be expected for a full fiscal year or any future period. Three Months Ended October 31, 2016 (1) January 31, 2017 (1) April 30, 2017 (1) July 31, 2017 (1) October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands, except per share amounts) Revenue: Product $ 153,536 $ 158,213 $ 160,076 $ 201,472 $ 219,052 $ 223,170 $ 221,117 $ 224,650 Support, entitlements and other services 35,025 41,001 45,594 50,986 56,500 63,574 68,296 79,098 Total revenue 188,561 199,214 205,670 252,458 275,552 286,744 289,413 303,748 Cost of revenue: Product (3)(4) 52,210 58,403 62,593 76,187 85,162 83,217 66,680 41,068 Support, entitlements and other services (3) 17,552 18,443 20,613 21,330 23,460 25,311 28,935 32,197 Total cost of revenue 69,762 76,846 83,206 97,517 108,622 108,528 95,615 73,265 Gross profit 118,799 122,368 122,464 154,941 166,930 178,216 193,798 230,483 Operating expenses: Sales and marketing (3)(4) 128,625 111,374 126,746 134,276 145,405 151,201 169,860 183,191 Research and development (3) 75,281 70,914 74,607 67,817 64,512 70,924 81,291 97,050 General and administrative (3) 29,372 15,481 15,610 16,878 16,052 15,948 24,929 29,472 Total operating expenses 233,278 197,769 216,963 218,971 225,969 238,073 276,080 309,713 Loss from operations (114,479 ) (75,401 ) (94,499 ) (64,030 ) (59,039 ) (59,857 ) (82,282 ) (79,230 ) Other income (expense), net (25,712 ) (421 ) 303 (547 ) (189 ) (861 ) (4,235 ) (4,021 ) Loss before provision for income taxes (140,191 ) (75,822 ) (94,196 ) (64,577 ) (59,228 ) (60,718 ) (86,517 ) (83,251 ) Provision for income taxes 111 547 2,639 1,555 2,259 1,913 (843 ) 4,118 Net loss $ (140,302 ) $ (76,369 ) $ (96,835 ) $ (66,132 ) $ (61,487 ) $ (62,631 ) $ (85,674 ) $ (87,369 ) Net loss per share attributable to Class A and Class B common stockholders—basic and diluted (2) $ (1.89 ) $ (0.54 ) $ (0.67 ) $ (0.43 ) $ (0.39 ) $ (0.39 ) $ (0.51 ) $ (0.51 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. (2) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share amounts may not equal annual basic and diluted per share amounts. (3) Includes stock-based compensation as follows: Three Months Ended October 31, 2016 January 31, 2017 April 30, 2017 July 31, 2017 October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands) Product cost of sales $ 966 $ 848 $ 610 $ 642 $ 570 $ 684 $ 634 $ 692 Support, entitlements and other services cost of sales 3,350 2,389 2,471 2,201 2,072 2,133 1,951 2,789 Sales and marketing 33,891 15,528 15,726 12,972 13,766 15,942 18,051 17,301 Research and development 34,026 28,759 27,041 19,218 15,542 17,023 16,474 25,350 General and administrative 18,495 5,083 4,503 2,772 3,565 6,229 7,836 9,264 Total $ 90,728 $ 52,607 $ 50,351 $ 37,805 $ 35,515 $ 42,011 $ 44,946 $ 55,396 (4) Includes amortization of intangible assets as follows: Three Months Ended October 31, 2016 January 31, 2017 April 30, 2017 July 31, 2017 October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands) Product cost of sales $ 238 $ 360 $ 358 $ 358 $ 895 $ 1,164 $ 1,447 $ 2,135 Sales and marketing 167 248 250 250 211 192 222 289 Total $ 405 $ 608 $ 608 $ 608 $ 1,106 $ 1,356 $ 1,669 $ 2,424 |
SUBSEQUENT EVENT SUBSEQUENT EVE
SUBSEQUENT EVENT SUBSEQUENT EVENT | 12 Months Ended |
Jul. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT Frame Acquisition On August 24, 2018, we completed the acquisition of Mainframe2, Inc., ("Frame"), a privately held Delaware corporation with its principal offices in San Mateo, California. Frame provides a cloud-based Windows desktop and application delivery service. The aggregate preliminary purchase price of approximately $129.7 million consisted of approximately $26.7 million in cash and 1,807,576 unregistered shares of our Class A common stock with an aggregate fair value of approximately $103.0 million . The fair value of the shares of common stock issued was determined to be $56.97 per share, the closing price of our stock on August 24, 2018. Certain portions of the consideration for the acquisition, both cash and shares of our Class A common stock, have been placed in escrow to secure the indemnification obligations of certain Frame security holders. We also entered into employee holdback or deferred payment arrangements with certain employees of Frame who joined Nutanix after the acquisition, totaling approximately $6.6 million . As payment of these deferred payments is contingent upon the continuous service of the employees, they are being accounted for as compensation over the required service period of three years. In addition, we also issued 643,746 unregistered shares of our Class A common stock to these Frame employees subject to their continuous employment with us. The fair value of the Class A common stock issued pursuant to the holdback arrangements was approximately $36.7 million , or $56.97 per share, the closing price of our Class A common stock on August 24, 2018. This holdback will be accounted for as stock-based compensation over the required three-year service period. We are currently in the process of finalizing the accounting for this transaction and expect to complete our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of the first quarter of fiscal 2019. |
OVERVIEW AND SUMMARY OF SIGNI23
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2018 | |
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. Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications had no impact on the previously reported net loss or accumulated deficit. Effective August 1, 2017, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606"), as discussed in detail in Note 3. All amounts and disclosures set forth in this Annual Report on Form 10-K have been updated to comply with ASC 606, as indicated by the "as adjusted" note. Certain prior period amounts have been adjusted as a result of our adoption of ASC 606. Refer to "Recently Adopted Accounting Pronouncements" below for more information. |
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 include, but are not limited to, the best estimate of selling prices for products and related support; useful lives of intangible assets and property and equipment; allowance for doubtful accounts; determination of fair value of common stock and convertible preferred stock, fair value of stock-based awards and convertible preferred stock warrant liability; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; fair value of contingent consideration in a business combination; sales commissions expense; 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. |
Concentration Risk | Concentration 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 Partners and occasionally directly to end customers. Vendor Risk — We rely on a limited number of suppliers for our contract manufacturing and certain raw material components. In instances where suppliers fail to perform their obligations, we may be unable to find alternative suppliers or satisfactorily deliver our products to our customers on time. |
Cash, Cash Equivalents | 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. |
Short-Term Investments | 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 Notes is determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. 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 doubtful accounts. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. 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 doubtful accounts 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 doubtful accounts based on the length of time the receivable is past due and our historical experience of collections and write-offs. |
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. |
Business Combination | 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. |
Impairment of 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 in-process research and development ("IPR&D"), 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, such as IPR&D, 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. |
Revenue Recognition | Revenue Recognition Effective August 1, 2017, we adopted ASC 606 using the full retrospective method. Refer to Note 3 for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue and commissions. 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. Revenue Recognition Effective August 1, 2017, we adopted ASC 606 using the full retrospective method, which required a recast of historical financial information to conform with the standard. The most significant impact of ASC 606 on our historical financial information relates to the timing of revenue recognition for certain software licenses sold with PCS, for which we did not have vendor specific objective evidence ("VSOE") of fair value under the previous revenue recognition guidance. Under ASC 606, the requirement to have VSOE for undelivered elements was eliminated and we now recognize revenue for such software licenses upon transfer of control to the customer. In addition, the adoption of ASC 606 also resulted in differences in the timing of recognition of contract costs, such as sales commissions, as well as the corresponding impact to the provision for income taxes. The adoption of the standard had no significant impact on the provision for income taxes and had no impact on the net cash from or used in operating, investing or financing activities on the consolidated statements of cash flows. See "ASC 606 Adoption Impact to Previously Reported Results" below for the impact of the adoption of the standard on the consolidated financial statements. |
Warranties | Warranties We generally provide a one -year warranty on hardware 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 contract manufacturers 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 contract manufacturers 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. |
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 stock options and purchase rights issued to employees 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. We grant stock awards with service conditions only and with both service and performance 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 accelerated attribution method to recognize stock-based compensation expense related to employee stock awards that contain both service and performance 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. We determine the fair value of stock awards issued to nonemployees on the date of grant, utilizing the Black-Scholes option pricing model. Stock-based compensation expense for stock awards issued to nonemployees is recognized over the requisite service period or when it is probable that the performance condition will be satisfied. Nonemployee awards subject to vesting are periodically remeasured to current fair value over the vesting period. |
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. |
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. |
Recently Issued and Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASC 606. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner which depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has issued several amendments to the standard, including clarifications on the disclosure of prior period performance obligations and remaining performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The new standard would have been effective for us beginning August 1, 2018, but early adoption as of the original effective date of August 1, 2017 was also permitted. We elected to early adopt the standard effective August 1, 2017 using the full retrospective method, which required a recast historical financial information to conform with the new standard. Refer to Note 3 for details of the impact to previously reported results. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, with further clarifications made recently with the issuance of ASU 2018-03 and 2018-04. These new standards require equity securities to be measured at fair value, with changes in fair value recognized through net income, which results in greater variability in our net income. We adopted the standard on January 1, 2018 and it did not have any impact on the consolidated financial statements, since other than our investments in money market funds, which are reported as part of cash and cash equivalents, we do not have any other investments that are classified as equity securities. There are no unrealized gains or losses related to our investments in money market funds, as the fair value is equal to the face value. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We adopted this ASU effective November 1, 2017 and our adoption did not have any impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), to clarify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU effective August 1, 2017 and our adoption did not have a material impact on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. We adopted this ASU effective August 1, 2017 and our adoption did not have a material impact on the consolidated financial statements. Recently Issued and Not Yet Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases, which requires recognition of right-to-use lease assets and lease liabilities for all leases, except for short-term leases, on the balance sheet of lessees. ASU 2016-02 is effective for us beginning August 1, 2019, with early adoption permitted. This new standard requires a modified retrospective transition approach and provides certain optional transition relief. We currently anticipate that the adoption of this standard will have a material impact on our consolidated balance sheets, given that we had operating lease commitments in excess of $100 million as of July 31, 2018 . We expect that most of our operating lease commitments will be subject to the new standard and recognized as lease liabilities and right-of-use assets upon adoption, which will increase the total assets and total liabilities reported. However, we do not anticipate that the adoption of this standard will have a material impact on our consolidated statements of operations, as the expense recognition under this new standard will be similar to current practice. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This new standard will require us to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for us beginning August 1, 2018, with early adoption permitted. We will adopt this standard in the first quarter of fiscal 2019 and anticipate an increase in deferred tax assets, which will be offset by a valuation allowance, thus resulting in an immaterial net impact to our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This new standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period amounts shown on the statement of cash flows. ASU 2016-18 is effective for us beginning August 1, 2018, with early adoption permitted. We do not believe that the adoption of this ASU will have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to nonemployees with the guidance applicable to grants to employees. Under the new standard, equity-classified share-based payment awards issued to nonemployees will be measured on the grant date, instead of the current requirement to remeasure the awards through the performance completion date. ASU 2018-07 is effective for us beginning August 1, 2019, with early adoption permitted. We do not believe that the adoption of this ASU will have a material impact on our consolidated financial statements. |
OVERVIEW AND SUMMARY OF SIGNI24
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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 as of July 31, Fiscal Year Ended July 31, Partners 2016 As Adjusted (2) 2017 As Adjusted (2) 2018 2017 2018 Partner A 14 % (1) 10 % (1) 16 % Partner B 18 % 19 % 20 % 12 % 13 % Partner C 13 % 16 % 18 % 14 % 15 % Partner D 11 % 10 % (1) 20 % (1) Partner E 10 % (1) (1) (1) (1) Partner F 15 % 14 % 13 % 18 % 12 % (1) Less than 10% (2) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
Schedule of Allowance for Doubtful Accounts Receivable | The changes in the allowance for doubtful accounts are as follows: Fiscal Year Ended July 31, 2016 2017 2018 (in thousands) Allowance for doubtful accounts—beginning balance $ 410 $ 132 $ 132 Charged to provision for doubtful accounts (credit) (85 ) — 815 Write-offs (193 ) — (132 ) Allowance for doubtful accounts—ending balance $ 132 $ 132 $ 815 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The purchase price allocation primarily included $11.9 million of goodwill, which is expected to be deductible for income tax purposes, and intangible assets, consisting of $16.1 million related to IPR&D, $3.6 million related to developed technology, which will be amortized over an estimated economic life of five years , and $4.6 million related to customer relationships, which will be amortized over an estimated economic life of six years . |
REVENUE, DEFERRED REVENUE AND26
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | We adjusted our consolidated financial statements from amounts previously reported due to the adoption of ASC 606. Selected consolidated balance sheet line items, adjusted for the adoption of ASC 606, are as follows: As of July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) Assets Deferred commissions — current $ 27,679 $ (3,836 ) (1) $ 23,843 Deferred commissions — non-current 33,709 15,975 (1) 49,684 Total deferred commissions $ 61,388 $ 12,139 $ 73,527 Liabilities Deferred revenue — current $ 233,498 $ (63,375 ) (2) $ 170,123 Deferred revenue — non-current 292,573 (93,640 ) (2) 198,933 Total deferred revenue $ 526,071 $ (157,015 ) $ 369,056 Accrued expenses and other current liabilities $ 9,414 $ 293 (3) $ 9,707 Stockholders' Equity $ 48,202 $ 168,861 $ 217,063 (1) Impact of cumulative change in commissions expense (2) Impact of cumulative change in revenue (3) Impact of cumulative change in provision for income taxes Selected consolidated statement of operations line items, adjusted for the adoption of ASC 606, are as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands, except per share data) Revenue Product $ 350,798 $ 63,112 $ 413,910 Support, entitlements and other services 94,130 (4,630 ) 89,500 Total revenue $ 444,928 $ 58,482 $ 503,410 Gross profit $ 274,141 $ 58,482 $ 332,623 Operating expenses Sales and marketing expenses $ 288,493 $ (1,909 ) $ 286,584 Loss from operations $ (165,017 ) $ 60,391 $ (104,626 ) Net loss $ (168,499 ) $ 60,266 $ (108,233 ) Basic and diluted net loss per share $ (3.83 ) $ 1.37 $ (2.46 ) Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands, except per share data) Revenue Product $ 583,011 $ 90,286 $ 673,297 Support, entitlements and other services 183,858 (11,252 ) 172,606 Total revenue $ 766,869 $ 79,034 $ 845,903 Gross profit $ 439,538 $ 79,034 $ 518,572 Operating expenses Sales and marketing expenses $ 500,529 $ 492 $ 501,021 Loss from operations $ (426,951 ) $ 78,542 $ (348,409 ) Net loss $ (458,011 ) $ 78,373 $ (379,638 ) Basic and diluted net loss per share $ (3.57 ) $ 0.61 $ (2.96 ) Revenue by geographic location, based on bill-to location, adjusted for the adoption of ASC 606, is as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands) U.S. $ 280,800 $ 38,496 $ 319,296 Europe, the Middle East and Africa 81,320 (15,721 ) 65,599 Asia Pacific 63,610 33,113 96,723 Other Americas 19,198 2,594 21,792 Total revenue $ 444,928 $ 58,482 $ 503,410 Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) U.S. $ 462,770 $ 25,309 $ 488,079 Europe, the Middle East and Africa 139,170 (355 ) 138,815 Asia Pacific 131,921 54,943 186,864 Other Americas 33,008 (863 ) 32,145 Total revenue $ 766,869 $ 79,034 $ 845,903 Selected consolidated statement of cash flows line items, adjusted for the adoption of ASC 606, are as follows: Fiscal Year Ended July 31, 2016 As Previously Reported Impact of Adoption As Adjusted (in thousands) Cash flows from operating activities: Net loss $ (168,499 ) $ 60,266 $ (108,233 ) Adjustments to reconcile net loss to net cash provided by operating activities: Deferred commissions $ (19,813 ) $ (1,911 ) $ (21,724 ) Accrued expenses and other liabilities $ (1,336 ) $ 127 $ (1,209 ) Deferred revenue $ 192,867 $ (58,482 ) $ 134,385 Fiscal Year Ended July 31, 2017 As Previously Reported Impact of Adoption As Adjusted (in thousands) Cash flows from operating activities: Net loss $ (458,011 ) $ 78,373 $ (379,638 ) Adjustments to reconcile net loss to net cash provided by operating activities: Deferred commissions $ (24,495 ) $ 489 $ (24,006 ) Accrued expenses and other liabilities $ 4,944 $ 172 $ 5,116 Deferred revenue $ 223,598 $ (79,034 ) $ 144,564 |
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, 2016 2017 2018 (in thousands) Software revenue $ 287,603 $ 436,981 $ 630,675 Hardware revenue 126,307 236,316 257,314 Support, entitlements and other services revenue 89,500 172,606 267,468 Total revenue $ 503,410 $ 845,903 $ 1,155,457 |
Deferred Revenue, by Arrangement, Disclosure | Significant changes in the balance of deferred revenue (contract liability) and total deferred commissions (contract asset) for the periods presented are as follows: Deferred Revenue Deferred Commissions (in thousands) Balance as of July 31, 2016 $ 218,481 $ 49,522 Additions 317,170 101,152 Revenue/commissions recognized (172,606 ) (77,147 ) Assumed in a business combination 6,011 — Balance as of July 31, 2017 (1) 369,056 73,527 Additions 529,495 150,122 Revenue/commissions recognized (267,468 ) (109,270 ) Assumed in a business combination 124 — Balance as of July 31, 2018 $ 631,207 $ 114,379 (1) See details above for a summary of adjustments to deferred commissions and deferred revenue as a result of the adoption of ASC 606. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2017 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 34,784 $ — $ — $ 34,784 Commercial paper — 23,041 — 23,041 Short-term investments: Corporate bonds — 160,634 — 160,634 Commercial paper — 36,084 — 36,084 U.S. government securities — 13,976 — 13,976 Total measured at fair value $ 34,784 $ 233,735 $ — $ 268,519 Cash 80,534 Total cash, cash equivalents and short-term investments $ 349,053 Financial Liabilities: Contingent consideration $ — $ — $ 4,295 $ 4,295 As of July 31, 2018 Level I Level II Level III Total (in thousands) Financial Assets: Cash equivalents: Money market funds $ 41,763 $ — $ — $ 41,763 Commercial paper — 77,818 — 77,818 U.S. government securities — 4,985 — 4,985 Short-term investments: Corporate bonds — 448,458 — 448,458 Commercial paper — 120,772 — 120,772 U.S. government securities — 59,098 — 59,098 Total measured at fair value 41,763 711,131 — 752,894 Cash 181,409 Total cash, cash equivalents and short-term investments $ 934,303 Financial Liabilities: Contingent consideration $ — $ — $ 1,872 $ 1,872 The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows: As of July 31, 2017 As of July 31, 2018 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in thousands) Convertible senior notes, net $ — $ — $ 429,598 $ 685,527 |
Summary of Changes in Fair Value of Convertible Preferred Stock Warrant Liability | A summary of the changes in the fair value of our contingent consideration, characterized as Level 3 in the fair value hierarchy, is as follows: Fiscal Year Ended July 31, 2017 2018 (in thousands) Contingent consideration—beginning balance $ — $ 4,295 Assumed in a business combination 2,371 — Change in fair value (1) 1,924 (2,423 ) Contingent consideration—ending balance $ 4,295 $ 1,872 (1) Recognized in the consolidated statements of operations within general and administrative expenses. We remeasure the fair value of our Level 3 contingent consideration liability using a Monte Carlo simulation on projected future payments. The fair value is determined by calculating the net present value of the expected payments using significant inputs that are not observable in the market, including the probability of achieving the milestone, estimated bookings and discount rates. The fair value of the contingent consideration will increase or decrease according to the movement of the inputs. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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 July 31, 2018 (in thousands) Due within one year $ 463,940 Due in one year through three years 164,388 Total $ 628,328 |
Schedule of Property, Plant and Equipment | Property and Equipment, Net Property and equipment, net consists of the following: Estimated Useful Life As of July 31, 2017 2018 (in months) (in thousands) Computer, production, engineering, and other equipment 36 $ 85,280 $ 131,805 Demonstration units 12 46,387 53,547 Leasehold improvements (1) 10,562 19,916 Furniture and fixtures 60 4,744 7,636 Total property and equipment, gross 146,973 212,904 Less: Accumulated depreciation and amortization (88,901 ) (127,793 ) Total property and equipment, net $ 58,072 $ 85,111 (1) Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consists of the following: As of July 31, 2017 2018 (in thousands) Indefinite-lived intangible asset: In-process R&D (1) $ 16,100 $ — Finite-lived intangible assets: Developed technology (1) 7,300 47,500 Customer relationships 4,830 6,650 Total finite-lived intangible assets, gross 12,130 54,150 Total intangible assets, gross 28,230 54,150 Less: Accumulated amortization of developed technology (1,314 ) (6,956 ) Accumulated amortization of customer relationships (915 ) (1,828 ) Total accumulated amortization (2,229 ) (8,784 ) Intangible assets, net $ 26,001 $ 45,366 (1) We started amortizing in-process R&D during the first quarter of fiscal 2018, as the related technology was completed and made generally available in the first quarter of fiscal 2018. We are amortizing developed technology using the straight-line method over a useful life of five years. Based on the foregoing, the balance of in-process R&D is now presented as part of developed technology as of July 31, 2018. |
Schedule of Indefinite-Lived Intangible Assets | The changes in the net book value of intangible assets, net are as follows: As of July 31, 2017 2018 (in thousands) Intangible assets, net—beginning balance $ — $ 26,001 Acquired intangible assets 28,230 25,920 Amortization of intangible assets (1) (2,229 ) (6,555 ) Intangible assets, net—ending balance $ 26,001 $ 45,366 (1) Represents amortization expense related to finite-lived intangible assets recognized during the year in the consolidated statements of operations, within product cost of revenue and sales and marketing expenses. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | stimated future amortization expense of our finite-lived intangible assets is as follows: Fiscal Year Ending July 31: Amount (in thousands) 2019 $ 9,551 2020 9,511 2021 9,511 2022 8,314 2023 3,971 Thereafter 4,508 Total $ 45,366 |
Schedule of Other Assets, Noncurrent | Other assets—non-current consists of the following: As of July 31, 2017 2018 (in thousands) Other tax assets—non-current $ — $ 30,927 Deferred tax assets—non-current 3,420 2,860 Other 4,229 4,068 Total other assets—non-current $ 7,649 $ 37,855 |
Schedule of Accrued Liabilities | Accrued Compensation and Benefits Accrued compensation and benefits consists of the following: As of July 31, 2017 2018 (in thousands) Contributions to ESPP withheld $ 14,371 $ 21,931 Accrued commissions 20,388 21,660 Accrued bonus 7,342 12,129 Accrued vacation 6,286 10,548 Payroll taxes payable 3,434 9,563 Other 5,700 9,567 Total accrued compensation and benefits $ 57,521 $ 85,398 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consists of the following: As of July 31, 2017 2018 (in thousands) Income taxes payable (1)(2) $ 3,873 $ 20,863 Accrued professional services 4,167 5,838 Other 1,667 4,981 Total accrued expenses and other current liabilities $ 9,707 $ 31,682 (1) Balance as of July 31, 2017 was adjusted to reflect the impact of the adoption of ASC 606 on income taxes. See Note 3 for a summary of adjustments. (2) The increase in income taxes payable during the fiscal year ended July 31, 2018 was due primarily to a payable related to the alternative minimum tax associated with the migration of certain intangible assets. For additional details, refer to Note 11. |
DEBT DEBT (Tables)
DEBT DEBT (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The total net proceeds from the 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 |
Schedule of Debt | The Notes consisted of the following: As of July 31, 2018 (in thousands) Principal amounts: Principal $ 575,000 Unamortized debt discount (1) (137,719 ) Unamortized debt issuance costs (1) (7,683 ) Net carrying amount $ 429,598 Carrying amount of equity component (2) $ 148,598 (1) Included in the consolidated balance sheets within "Convertible senior notes, net" and amortized over the remaining life of the 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 Income and Interest Expense Disclosure | The following table sets forth the total interest expense recognized related to the Notes: Fiscal Year Ended July 31, 2018 (in thousands) Interest expense related to amortization of debt discount $ 13,909 Interest expense related to amortization of debt issuance costs 776 Total interest expense $ 14,685 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Due Under Operating Leases | Future minimum payments due under operating leases as of July 31, 2018 are as follows: Fiscal Year Ending July 31: Amount (in thousands) 2019 $ 26,158 2020 23,849 2021 21,749 2022 20,739 2023 17,115 Thereafter 12,718 Total $ 122,328 |
STOCKHOLDERS_ EQUITY STOCKHOLDE
STOCKHOLDERS’ EQUITY STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stock by Class | As of July 31, 2018 , we had reserved shares of common stock for future issuance as follows: As of July 31, 2018 Shares reserved for future equity grants 11,169,061 Shares underlying outstanding stock options 11,332,554 Shares underlying outstanding restricted stock units 23,597,499 Shares reserved for future employee stock purchase plan awards 1,682,461 Shares underlying outstanding common stock warrants 34,180 Total 47,815,755 |
EQUITY AWARD PLANS (Tables)
EQUITY AWARD PLANS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of RSUs Activity | summary of RSU activity under the Stock Plans: Fiscal Year Ended July 31, 2017 2018 Number of Grant Date Fair Value per Share Number of Grant Date Fair Value per Share Outstanding at beginning of period 12,265,369 $ 13.23 17,376,090 $ 18.85 Granted 12,986,597 $ 21.84 14,947,403 $ 39.44 Released (6,146,169 ) $ 15.63 (5,823,800 ) $ 19.96 Canceled/forfeited (1,729,707 ) $ 13.57 (2,902,194 ) $ 22.34 Outstanding at end of period 17,376,090 $ 18.85 23,597,499 $ 31.20 |
Schedule of Employee Stock Purchase Plan, 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, 2017 2018 Expected term (in years) 0.75 0.75 Risk-free interest rate 0.6 % 1.4 % Volatility 51.0 % 49.8 % Dividend yield — % — % |
Schedule of Stock Option Activity | The stock option activity under the Stock Plans is as follows: Fiscal Year Ended July 31, 2017 2018 Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) (in years) (in thousands) Outstanding at beginning of period 26,166,968 (1) $ 4.39 7.5 $ 208,101 20,334,531 $ 4.59 6.4 $ 338,787 Options granted 1,047,950 $ 12.14 — $ — Options exercised (4,786,381 ) $ 3.27 (8,672,623 ) $ 3.81 Options canceled/forfeited (2,094,006 ) $ 8.89 (329,354 ) $ 6.63 Outstanding at end of period 20,334,531 $ 4.59 6.4 $ 338,787 11,332,554 $ 5.12 5.6 $ 496,022 Exercisable at end of period 19,645,676 $ 4.43 6.3 $ 330,486 11,159,045 $ 5.01 5.5 $ 489,682 Vested and expected to vest at end of period 20,334,531 $ 4.59 6.4 $ 338,787 11,332,554 $ 5.12 5.6 $ 496,022 (1) Includes 455,000 stock options with both service and performance conditions with a weighted average fair value per share of $3.78 (the "Performance Stock Options"). Vesting of the Performance Stock Options was subject to continuous service with us (the "service condition") and satisfaction of certain liquidity events (the "performance condition"). We recognized cumulative stock-based compensation expense related to the Performance Stock Options in the first quarter of fiscal 2017, as the performance condition was met upon the successful completion of our IPO. The cumulative stock-based compensation expense recorded in the first quarter of fiscal 2017 was for the portion of the awards for which the relevant service condition had been satisfied and the remaining expense is being recognized over the remaining service period. |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Stock-Based Compensation Total stock-based compensation expense recognized in the consolidated statements of operations is as follows: Fiscal Year Ended July 31, 2016 2017 2018 (in thousands) Cost of revenue: Product $ 391 $ 3,066 $ 2,580 Support, entitlements and other services 968 10,411 8,945 Sales and marketing 8,006 78,117 65,060 Research and development 6,259 109,044 74,389 General and administrative 4,432 30,853 26,894 Total stock-based compensation expense $ 20,056 $ 231,491 $ 177,868 |
Schedule Stock Option Valuation Assumptions | The fair value of our stock options was estimated using the following weighted average assumptions: Fiscal Year Ended July 31, 2016 2017 Fair value of common stock $ 14.81 $ 12.14 Expected term (in years) 6.1 6.1 Risk-free interest rate 1.6 % 1.3 % Volatility 42 % 52 % Dividend yield — % — % |
NET LOSS AND UNAUDITED NET LO33
NET LOSS AND UNAUDITED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The computation of basic and diluted net loss per share is as follows: Fiscal Year Ended July 31, 2016 As Adjusted (1) 2017 As Adjusted (1) 2018 (in thousands, except share and per share data) Numerator: Net loss $ (108,233 ) $ (379,638 ) $ (297,161 ) Denominator: Weighted average shares—basic and diluted 43,970,381 128,295,563 164,091,302 Net loss per share—basic and diluted $ (2.46 ) $ (2.96 ) $ (1.81 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potential shares of common stock that would have been 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: As of July 31, 2016 2017 2018 Convertible preferred stock 76,319,511 — — Outstanding stock options and RSUs 38,432,337 37,710,621 34,930,053 Employee stock purchase plan — 1,447,385 1,310,653 Common stock subject to repurchase 954,215 243,148 47,691 Contingently issuable shares pursuant to a business combination — — 276,625 Common stock warrants 824,094 34,180 34,180 Total 116,530,157 39,435,334 36,599,202 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2016 (1) 2017 (1) 2018 (in thousands) Domestic $ (67,776 ) $ (304,363 ) $ (201,666 ) Foreign (38,140 ) (70,423 ) (88,048 ) Loss before provision for income taxes $ (105,916 ) $ (374,786 ) $ (289,714 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2016 (1) 2017 (1) 2018 (in thousands) Current: U.S. federal $ — $ — $ 2,059 State and local 140 193 429 Foreign 3,172 8,196 8,541 Total current taxes 3,312 8,389 11,029 Deferred: U.S. federal — (1,342 ) (3,387 ) State and local — 13 (718 ) Foreign (995 ) (2,208 ) 523 Total deferred taxes (995 ) (3,537 ) (3,582 ) Provision for income taxes $ 2,317 $ 4,852 $ 7,447 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory federal income tax and our effective income tax is as follows: Fiscal Year Ended July 31, 2016 (1) 2017 (1) 2018 (in thousands) U.S. tax reform impact $ — $ — $ 93,352 U.S. federal income tax at statutory rate (36,011 ) (127,427 ) (75,779 ) Stock-based compensation 3,655 6,701 (73,631 ) Effect of foreign operations 15,144 16,891 26,117 Change in valuation allowance 19,268 86,941 25,274 Transfer pricing adjustments — 11,822 4,584 Intangible asset migration — — 4,461 Non-deductible expenses 802 1,693 2,115 State income taxes 140 206 (290 ) Warrant revaluation (681 ) 7,185 — Other — 840 1,244 Total $ 2,317 $ 4,852 $ 7,447 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
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, 2017 (1) 2018 (in thousands) Deferred tax assets: Net operating loss carryforward $ 135,929 $ 162,914 Tax credit carryforward 13,100 47,839 Deferred revenue 2,378 27,577 Stock-based compensation expense 27,512 21,252 Accruals and reserves 7,427 8,370 Property and equipment 1,118 — Total deferred tax assets 187,464 267,952 Deferred tax liabilities: Deferred commission expense (22,535 ) (27,829 ) Goodwill and intangible assets (483 ) (5,909 ) Property and equipment — (3,870 ) Other (75 ) (497 ) Total deferred tax liabilities (23,093 ) (38,105 ) Valuation allowance (161,195 ) (226,987 ) Net deferred tax assets $ 3,176 $ 2,860 |
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, 2017 2018 (in thousands) Balance at the beginning of the year $ 19,711 $ 42,655 Increases related to current year tax positions 22,571 58,727 Increases related to prior year tax positions 373 4,893 Decreases related to prior year tax positions — (14,559 ) Balance at the end of the year $ 42,655 $ 91,716 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | The following table sets forth revenue by geographic area by bill-to location: Fiscal Year Ended July 31, 2016 As Adjusted (1) 2017 As Adjusted (1) 2018 (in thousands) U.S. $ 319,296 $ 488,079 $ 648,805 Europe, the Middle East and Africa 65,599 138,815 224,392 Asia Pacific 96,723 186,864 240,247 Other Americas 21,792 32,145 42,013 Total revenue $ 503,410 $ 845,903 $ 1,155,457 (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. |
SELECTED QUARTERLY FINANCIAL 36
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Statements | Three Months Ended October 31, 2016 (1) January 31, 2017 (1) April 30, 2017 (1) July 31, 2017 (1) October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands, except per share amounts) Revenue: Product $ 153,536 $ 158,213 $ 160,076 $ 201,472 $ 219,052 $ 223,170 $ 221,117 $ 224,650 Support, entitlements and other services 35,025 41,001 45,594 50,986 56,500 63,574 68,296 79,098 Total revenue 188,561 199,214 205,670 252,458 275,552 286,744 289,413 303,748 Cost of revenue: Product (3)(4) 52,210 58,403 62,593 76,187 85,162 83,217 66,680 41,068 Support, entitlements and other services (3) 17,552 18,443 20,613 21,330 23,460 25,311 28,935 32,197 Total cost of revenue 69,762 76,846 83,206 97,517 108,622 108,528 95,615 73,265 Gross profit 118,799 122,368 122,464 154,941 166,930 178,216 193,798 230,483 Operating expenses: Sales and marketing (3)(4) 128,625 111,374 126,746 134,276 145,405 151,201 169,860 183,191 Research and development (3) 75,281 70,914 74,607 67,817 64,512 70,924 81,291 97,050 General and administrative (3) 29,372 15,481 15,610 16,878 16,052 15,948 24,929 29,472 Total operating expenses 233,278 197,769 216,963 218,971 225,969 238,073 276,080 309,713 Loss from operations (114,479 ) (75,401 ) (94,499 ) (64,030 ) (59,039 ) (59,857 ) (82,282 ) (79,230 ) Other income (expense), net (25,712 ) (421 ) 303 (547 ) (189 ) (861 ) (4,235 ) (4,021 ) Loss before provision for income taxes (140,191 ) (75,822 ) (94,196 ) (64,577 ) (59,228 ) (60,718 ) (86,517 ) (83,251 ) Provision for income taxes 111 547 2,639 1,555 2,259 1,913 (843 ) 4,118 Net loss $ (140,302 ) $ (76,369 ) $ (96,835 ) $ (66,132 ) $ (61,487 ) $ (62,631 ) $ (85,674 ) $ (87,369 ) Net loss per share attributable to Class A and Class B common stockholders—basic and diluted (2) $ (1.89 ) $ (0.54 ) $ (0.67 ) $ (0.43 ) $ (0.39 ) $ (0.39 ) $ (0.51 ) $ (0.51 ) (1) Adjusted to include the impact of ASC 606. Refer to Note 3 for more details on the impact of the adoption of this standard. (2) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share amounts may not equal annual basic and diluted per share amounts. (3) Includes stock-based compensation as follows: Three Months Ended October 31, 2016 January 31, 2017 April 30, 2017 July 31, 2017 October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands) Product cost of sales $ 966 $ 848 $ 610 $ 642 $ 570 $ 684 $ 634 $ 692 Support, entitlements and other services cost of sales 3,350 2,389 2,471 2,201 2,072 2,133 1,951 2,789 Sales and marketing 33,891 15,528 15,726 12,972 13,766 15,942 18,051 17,301 Research and development 34,026 28,759 27,041 19,218 15,542 17,023 16,474 25,350 General and administrative 18,495 5,083 4,503 2,772 3,565 6,229 7,836 9,264 Total $ 90,728 $ 52,607 $ 50,351 $ 37,805 $ 35,515 $ 42,011 $ 44,946 $ 55,396 (4) Includes amortization of intangible assets as follows: Three Months Ended October 31, 2016 January 31, 2017 April 30, 2017 July 31, 2017 October 31, 2017 January 31, 2018 April 30, 2018 July 31, 2018 (unaudited, in thousands) Product cost of sales $ 238 $ 360 $ 358 $ 358 $ 895 $ 1,164 $ 1,447 $ 2,135 Sales and marketing 167 248 250 250 211 192 222 289 Total $ 405 $ 608 $ 608 $ 608 $ 1,106 $ 1,356 $ 1,669 $ 2,424 |
OVERVIEW AND SUMMARY OF SIGNI37
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ / shares in Units, $ in Thousands | Sep. 30, 2016shares | Oct. 31, 2016USD ($)class$ / sharesshares | Jul. 31, 2018USD ($)vote | Jul. 31, 2017USD ($)shares | Jul. 31, 2016USD ($) | Nov. 01, 2016voteclass |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Impairment losses | $ 0 | $ 0 | $ 0 | |||
Issuance of common stock upon initial public offering (in shares) | shares | 17,100,500 | |||||
Shares issued price per share (in dollars per share) | $ / shares | $ 16 | |||||
Issuance of class A common stock upon IPO, net of issuance costs | $ 254,500 | 249,170 | ||||
Underwriting discounts and commissions | $ (19,200) | |||||
Offering costs incurred | 5,300 | |||||
Common stock, number of classes of stock | class | 2 | 2 | ||||
Foreign currency transaction gain (loss), before tax | (3,600) | (2,600) | (1,500) | |||
Advertising expense | 14,600 | $ 13,000 | $ 6,500 | |||
Operating lease commitments (in excess of) | $ 100,000 | |||||
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 | |||||
Common Class B Warrant | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of warrants exercised (in shares) | shares | 824,024 | |||||
Common Stock | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Issuance of common stock upon initial public offering (in shares) | shares | 17,100,500 | |||||
Issuance of class A common stock upon IPO, net of issuance costs | $ 1 | |||||
Conversion of convertible preferred stock to common stock upon initial public (in shares) | shares | 76,319,511 | |||||
Preferred Class B | Common Stock | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Conversion of convertible preferred stock to common stock upon initial public (in shares) | shares | 76,319,511 | |||||
Common Class B | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Common stock number of votes per share | vote | 10 | 10 | ||||
Common Class B | Common Stock | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Conversion ratio | 1 | |||||
Common Class A | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Common stock number of votes per share | vote | 1 | 1 | ||||
Over-Allotment Option | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Issuance of common stock upon initial public offering (in shares) | shares | 2,230,500 |
OVERVIEW AND SUMMARY OF SIGNI38
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration Risk (Details) - Partner Concentration Risk | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Revenue | Partner A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 14.00% | |
Revenue | Partner B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 20.00% | 19.00% | 18.00% |
Revenue | Partner C | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 18.00% | 16.00% | 13.00% |
Revenue | Partner D | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 11.00% | |
Revenue | Partner E | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Revenue | Partner F | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 14.00% | 15.00% |
Accounts Receivable | Partner A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.00% | ||
Accounts Receivable | Partner B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 12.00% | |
Accounts Receivable | Partner C | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 14.00% | |
Accounts Receivable | Partner D | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 20.00% | ||
Accounts Receivable | Partner F | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 12.00% | 18.00% |
OVERVIEW AND SUMMARY OF SIGNI39
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance for accounts receivable, beginning balance | $ 132 | $ 132 | $ 410 |
Charged to provision for doubtful accounts (credit) | 815 | 0 | (85) |
Write-offs | (132) | 0 | (193) |
Allowance for doubtful accounts—ending balance | $ 815 | $ 132 | $ 132 |
BUSINESS COMBINATIONS - Calm Ac
BUSINESS COMBINATIONS - Calm Acquisition (Details) $ in Thousands | Aug. 22, 2016USD ($)shares | Jul. 31, 2018USD ($)business | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||
Number of Businesses Acquired | business | 2 | |||
Goodwill | $ 87,759 | $ 16,672 | $ 0 | |
Calm Acquisition | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 7,700 | |||
Business acquisition equity issued (in shares) | shares | 528,517 | |||
Cash payment to acquire business | $ 1,400 | |||
Goodwill | 4,800 | |||
Intangible assets | $ 4,000 | |||
Estimated Life (in years) | 4 years 10 months | |||
Acquisition related costs | $ 600 |
BUSINESS COMBINATIONS - PernixD
BUSINESS COMBINATIONS - PernixData Acquisition (Details) - USD ($) $ in Thousands | Sep. 06, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Business Acquisition [Line Items] | ||||
Contingent liability adjustment | $ 2,423 | $ (1,924) | $ 0 | |
Goodwill | $ 87,759 | $ 16,672 | $ 0 | |
PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 23,000 | |||
Business acquisition equity issued (in shares) | 1,711,019 | |||
Payment term (in years) | 3 years | |||
Contingent consideration maximum | $ 19,000 | |||
Contingent liability | 2,400 | |||
Contingent liability adjustment | 1,800 | |||
Acquisition related costs | 700 | |||
Goodwill | 11,900 | |||
Contingent Consideration, Purchase Price | PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration maximum | 7,500 | |||
Contingent Consideration, Compensation | PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration maximum | $ 11,500 | |||
Developed technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Life (in years) | 5 years | |||
Developed technology | PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets, gross | $ 3,570 | |||
Estimated Life (in years) | 5 years | |||
Customer relationships | PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets, gross | $ 4,600 | |||
Estimated Life (in years) | 6 years | |||
In-process R&D | PernixData Acquisition | ||||
Business Acquisition [Line Items] | ||||
In-process R&D | $ 16,100 |
BUSINESS COMBINATIONS - Minjar
BUSINESS COMBINATIONS - Minjar Acquisition (Details) - USD ($) $ in Thousands | Mar. 16, 2018 | Sep. 06, 2016 | Jul. 31, 2018 |
Minjar, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 19,300 | ||
Cash payment to acquire business | 18,800 | ||
Liabilities incurred | 500 | ||
Contingent consideration, liability | 4,400 | ||
Goodwill acquired | $ 18,002 | ||
Intangible assets | $ 7,000 | ||
Estimated Life (in years) | 5 years | ||
Deferred tax liabilities noncurrent | $ (5,700) | ||
Acquisition related costs | $ 600 | ||
Developed technology | |||
Business Acquisition [Line Items] | |||
Estimated Life (in years) | 5 years | ||
Developed technology | Minjar, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | 5,600 | ||
Customer relationships | Minjar, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 1,400 |
BUSINESS COMBINATIONS - Netsil
BUSINESS COMBINATIONS - Netsil Acquisition (Details) - Netsil Inc. - USD ($) $ / shares in Units, $ in Thousands | Mar. 22, 2018 | Jul. 31, 2018 |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 67,500 | |
Cash payment to acquire business | $ 3,700 | |
Business acquisition equity issued (in shares) | 1,206,364 | |
Equity interests issued and issuable (in shares) | $ 63,800 | |
Share price (in dollars per share) | $ 52.87 | |
Deferred payment arrangement, number of shares (in shares) | 104,426 | |
Holdback arrangement, amount | $ 5,500 | |
Holdback arrangement, service period | 2 years | |
Goodwill acquired | $ 53,085 | |
Intangible assets | $ 19,000 | |
Estimated Life (in years) | 7 years | |
Deferred tax liabilities noncurrent | $ (2,600) | |
Liabilities assumed | $ (1,400) | |
Acquisition related costs | $ 400 |
BUSINESS COMBINATIONS - Prelimi
BUSINESS COMBINATIONS - Preliminary Aggregate Purchase Price Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 87,759 | $ 16,672 | $ 0 |
Minjar and Netsil | |||
Business Acquisition [Line Items] | |||
Goodwill | 71,087 | 16,672 | |
Amortizable intangible assets | 25,920 | 28,230 | |
Tangible assets acquired | 842 | 2,884 | |
Liabilities assumed | (11,041) | (16,988) | |
Total consideration | $ 86,808 | $ 30,798 |
REVENUE, DEFERRED REVENUE AND45
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - ASC 606 Adoption Impact to Balance Sheet (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred commissions—current | $ 33,691 | $ 23,843 | ||
Deferred commissions—non-current | 80,688 | 49,684 | ||
Deferred Sales Commission | 114,379 | 73,527 | $ 49,522 | |
Deferred Revenue | 631,207 | 369,056 | 218,481 | |
Accrued expenses and other current liabilities | 31,682 | 9,707 | ||
Stockholders' Equity Attributable to Parent | $ 326,779 | 217,063 | $ (285,827) | $ (234,734) |
Accounting Standards Update 2014-09 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred commissions—current | 23,843 | |||
Deferred commissions—non-current | 49,684 | |||
Deferred Sales Commission | 73,527 | |||
Deferred Revenue, Current | 170,123 | |||
Deferred Revenue, Noncurrent | 198,933 | |||
Deferred Revenue | 369,056 | |||
Accrued expenses and other current liabilities | 9,707 | |||
Stockholders' Equity Attributable to Parent | 217,063 | |||
Accounting Standards Update 2014-09 [Member] | Previously Reported [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred commissions—current | 27,679 | |||
Deferred commissions—non-current | 33,709 | |||
Deferred Sales Commission | 61,388 | |||
Deferred Revenue, Current | 233,498 | |||
Deferred Revenue, Noncurrent | 292,573 | |||
Deferred Revenue | 526,071 | |||
Accrued expenses and other current liabilities | 9,414 | |||
Stockholders' Equity Attributable to Parent | 48,202 | |||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred commissions—current | (3,836) | |||
Deferred commissions—non-current | 15,975 | |||
Deferred Sales Commission | 12,139 | |||
Deferred Revenue, Current | (63,375) | |||
Deferred Revenue, Noncurrent | (93,640) | |||
Deferred Revenue | (157,015) | |||
Accrued expenses and other current liabilities | 293 | |||
Stockholders' Equity Attributable to Parent | $ 168,861 |
REVENUE, DEFERRED REVENUE AND46
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - ASC 606 Adoption Impact to Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
Gross Profit | 230,483 | 193,798 | 178,216 | 166,930 | 154,941 | 122,464 | 122,368 | 118,799 | 769,427 | 518,572 | 332,623 |
Sales and marketing | 183,191 | 169,860 | 151,201 | 145,405 | 134,276 | 126,746 | 111,374 | 128,625 | 649,657 | 501,021 | 286,584 |
Operating Income (Loss) | (79,230) | (82,282) | (59,857) | (59,039) | (64,030) | (94,499) | (75,401) | (114,479) | (280,408) | (348,409) | (104,626) |
Net loss | $ (87,369) | $ (85,674) | $ (62,631) | $ (61,487) | $ (66,132) | $ (96,835) | $ (76,369) | $ (140,302) | $ (297,161) | $ (379,638) | $ (108,233) |
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (0.51) | $ (0.51) | $ (0.39) | $ (0.39) | $ (0.43) | $ (0.67) | $ (0.54) | $ (1.89) | $ (1.81) | $ (2.96) | $ (2.46) |
Product | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 224,650 | $ 221,117 | $ 223,170 | $ 219,052 | $ 201,472 | $ 160,076 | $ 158,213 | $ 153,536 | $ 887,989 | $ 673,297 | $ 413,910 |
Support, entitlements and other services | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 79,098 | $ 68,296 | $ 63,574 | $ 56,500 | $ 50,986 | $ 45,594 | $ 41,001 | $ 35,025 | 267,468 | 172,606 | 89,500 |
Accounting Standards Update 2014-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 1,155,457 | 845,903 | 503,410 | ||||||||
Gross Profit | 518,572 | 332,623 | |||||||||
Sales and marketing | 501,021 | 286,584 | |||||||||
Operating Income (Loss) | (348,409) | (104,626) | |||||||||
Net loss | $ (379,638) | $ (108,233) | |||||||||
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (2.96) | $ (2.46) | |||||||||
Accounting Standards Update 2014-09 [Member] | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 766,869 | $ 444,928 | |||||||||
Gross Profit | 439,538 | 274,141 | |||||||||
Sales and marketing | 500,529 | 288,493 | |||||||||
Operating Income (Loss) | (426,951) | (165,017) | |||||||||
Net loss | $ (458,011) | $ (168,499) | |||||||||
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (3.57) | $ (3.83) | |||||||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 79,034 | $ 58,482 | |||||||||
Gross Profit | 79,034 | 58,482 | |||||||||
Sales and marketing | 492 | (1,909) | |||||||||
Operating Income (Loss) | 78,542 | 60,391 | |||||||||
Net loss | $ 78,373 | $ 60,266 | |||||||||
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ 0.61 | $ 1.37 | |||||||||
Accounting Standards Update 2014-09 [Member] | Product | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 673,297 | $ 413,910 | |||||||||
Accounting Standards Update 2014-09 [Member] | Product | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 583,011 | 350,798 | |||||||||
Accounting Standards Update 2014-09 [Member] | Product | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 90,286 | 63,112 | |||||||||
Accounting Standards Update 2014-09 [Member] | Support, entitlements and other services | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 172,606 | 89,500 | |||||||||
Accounting Standards Update 2014-09 [Member] | Support, entitlements and other services | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 183,858 | 94,130 | |||||||||
Accounting Standards Update 2014-09 [Member] | Support, entitlements and other services | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ (11,252) | $ (4,630) |
REVENUE, DEFERRED REVENUE AND47
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - ASC 606 Adoption Impact to Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
UNITED STATES | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 648,805 | 488,079 | 319,296 | ||||||||
Europe, the Middle East and Africa | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 224,392 | 138,815 | 65,599 | ||||||||
Asia-Pacific | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 240,247 | 186,864 | 96,723 | ||||||||
Other Americas | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 42,013 | 32,145 | 21,792 | ||||||||
Accounting Standards Update 2014-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 1,155,457 | 845,903 | 503,410 | ||||||||
Accounting Standards Update 2014-09 [Member] | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 766,869 | 444,928 | |||||||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 79,034 | 58,482 | |||||||||
Accounting Standards Update 2014-09 [Member] | UNITED STATES | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 488,079 | 319,296 | |||||||||
Accounting Standards Update 2014-09 [Member] | UNITED STATES | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 462,770 | 280,800 | |||||||||
Accounting Standards Update 2014-09 [Member] | UNITED STATES | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 25,309 | 38,496 | |||||||||
Accounting Standards Update 2014-09 [Member] | Europe, the Middle East and Africa | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 138,815 | 65,599 | |||||||||
Accounting Standards Update 2014-09 [Member] | Europe, the Middle East and Africa | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 139,170 | 81,320 | |||||||||
Accounting Standards Update 2014-09 [Member] | Europe, the Middle East and Africa | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | (355) | (15,721) | |||||||||
Accounting Standards Update 2014-09 [Member] | Asia-Pacific | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 186,864 | 96,723 | |||||||||
Accounting Standards Update 2014-09 [Member] | Asia-Pacific | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 131,921 | 63,610 | |||||||||
Accounting Standards Update 2014-09 [Member] | Asia-Pacific | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 54,943 | 33,113 | |||||||||
Accounting Standards Update 2014-09 [Member] | Other Americas | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 32,145 | 21,792 | |||||||||
Accounting Standards Update 2014-09 [Member] | Other Americas | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 33,008 | 19,198 | |||||||||
Accounting Standards Update 2014-09 [Member] | Other Americas | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ (863) | $ 2,594 |
REVENUE, DEFERRED REVENUE AND48
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - ASC 606 Adoption Impact to Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net loss | $ (87,369) | $ (85,674) | $ (62,631) | $ (61,487) | $ (66,132) | $ (96,835) | $ (76,369) | $ (140,302) | $ (297,161) | $ (379,638) | $ (108,233) |
Increase (Decrease) in Deferred Charges | 40,852 | 24,006 | 21,724 | ||||||||
Accrued expenses and other liabilities | $ 34,295 | 5,116 | (1,209) | ||||||||
Accounting Standards Update 2014-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net loss | (379,638) | (108,233) | |||||||||
Increase (Decrease) in Deferred Charges | (24,006) | (21,724) | |||||||||
Accrued expenses and other liabilities | 5,116 | (1,209) | |||||||||
Increase (Decrease) in Deferred Revenue | 144,564 | 134,385 | |||||||||
Accounting Standards Update 2014-09 [Member] | Previously Reported [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net loss | (458,011) | (168,499) | |||||||||
Increase (Decrease) in Deferred Charges | (24,495) | (19,813) | |||||||||
Accrued expenses and other liabilities | 4,944 | (1,336) | |||||||||
Increase (Decrease) in Deferred Revenue | 223,598 | 192,867 | |||||||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net loss | 78,373 | 60,266 | |||||||||
Increase (Decrease) in Deferred Charges | 489 | (1,911) | |||||||||
Accrued expenses and other liabilities | 172 | 127 | |||||||||
Increase (Decrease) in Deferred Revenue | $ (79,034) | $ (58,482) |
REVENUE, DEFERRED REVENUE AND49
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
Software | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 630,675 | 436,981 | 287,603 | ||||||||
Hardware | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | 257,314 | 236,316 | 126,307 | ||||||||
Support, entitlements and other services | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 79,098 | $ 68,296 | $ 63,574 | $ 56,500 | $ 50,986 | $ 45,594 | $ 41,001 | $ 35,025 | 267,468 | 172,606 | 89,500 |
Accounting Standards Update 2014-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 1,155,457 | 845,903 | 503,410 | ||||||||
Accounting Standards Update 2014-09 [Member] | Support, entitlements and other services | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total revenue | $ 172,606 | $ 89,500 | |||||||||
Minimum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Software license term | 1 year | ||||||||||
Maximum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Software license term | 5 years | ||||||||||
Weighted Average | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Software license term | 3 years 6 months |
REVENUE, DEFERRED REVENUE AND50
REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS - Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Deferred Revenue | ||
Beginning balance | $ 369,056 | $ 218,481 |
Additions | 529,495 | 317,170 |
Revenue/commissions recognized | (267,468) | (172,606) |
Assumed in a business combination | 124 | 6,011 |
Ending balance | 631,207 | 369,056 |
Deferred Commissions | ||
Beginning balance | 73,527 | 49,522 |
Additions | 150,122 | 101,152 |
Revenue/commissions recognized | (109,270) | (77,147) |
Assumed in a business combination | 0 | 0 |
Ending balance | $ 114,379 | 73,527 |
Percent expected to be recognized in next year | 29.00% | |
Amount deferred in prior period | $ 170,100 | $ 101,600 |
Contracted revenue not recognized | $ 657,100 | |
Percent expected to be recognized in next year | 45.00% |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Financial Assets: | ||
Short-term investments: | $ 628,328 | $ 210,694 |
Recurring | ||
Financial Assets: | ||
Total measured at fair value | 752,894 | 268,519 |
Cash | 181,409 | 80,534 |
Total cash, cash equivalents and short-term investments | 934,303 | 349,053 |
Recurring | Warrant | ||
Financial Liabilities: | ||
Convertible preferred stock warrant liability | 1,872 | 4,295 |
Recurring | Corporate bonds | ||
Financial Assets: | ||
Short-term investments: | 448,458 | 160,634 |
Recurring | Commercial paper | ||
Financial Assets: | ||
Short-term investments: | 120,772 | 36,084 |
Recurring | US Government Debt Securities | ||
Financial Assets: | ||
Cash equivalents: | 4,985 | |
Short-term investments: | 59,098 | 13,976 |
Recurring | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 41,763 | 34,784 |
Recurring | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 77,818 | 23,041 |
Recurring | Level I | ||
Financial Assets: | ||
Total measured at fair value | 41,763 | 34,784 |
Recurring | Level I | Warrant | ||
Financial Liabilities: | ||
Convertible preferred stock warrant liability | 0 | 0 |
Recurring | Level I | Corporate bonds | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level I | Commercial paper | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level I | US Government Debt Securities | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level I | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 41,763 | 34,784 |
Recurring | Level I | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level II | ||
Financial Assets: | ||
Total measured at fair value | 711,131 | 233,735 |
Recurring | Level II | Warrant | ||
Financial Liabilities: | ||
Convertible preferred stock warrant liability | 0 | 0 |
Recurring | Level II | Corporate bonds | ||
Financial Assets: | ||
Short-term investments: | 448,458 | 160,634 |
Recurring | Level II | Commercial paper | ||
Financial Assets: | ||
Short-term investments: | 120,772 | 36,084 |
Recurring | Level II | US Government Debt Securities | ||
Financial Assets: | ||
Cash equivalents: | 4,985 | |
Short-term investments: | 59,098 | 13,976 |
Recurring | Level II | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level II | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | 77,818 | 23,041 |
Recurring | Level III | ||
Financial Assets: | ||
Total measured at fair value | 0 | 0 |
Recurring | Level III | Warrant | ||
Financial Liabilities: | ||
Convertible preferred stock warrant liability | 1,872 | 4,295 |
Recurring | Level III | Corporate bonds | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level III | Commercial paper | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level III | US Government Debt Securities | ||
Financial Assets: | ||
Short-term investments: | 0 | 0 |
Recurring | Level III | Money market funds | ||
Financial Assets: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level III | Commercial paper | ||
Financial Assets: | ||
Cash equivalents: | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - Convertible Senior Notes (Details) - USD ($) | Jul. 31, 2018 | Jan. 31, 2018 | Jul. 31, 2017 |
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 | $ 429,598,000 | $ 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 | 685,527,000 | $ 0 | |
Convertible Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | ||
Debt Instrument, Unamortized Discount | (137,719,000) | ||
Unamortized Debt Issuance Expense | $ (7,683,000) |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 Roll Forward (Details) - Commitments - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration—beginning balance | $ 4,295 | $ 0 |
Assumed in a business combination | 0 | 2,371 |
Change in fair value | 2,423 | (1,924) |
Convertible preferred stock warrant liability—beginning balance | $ 1,872 | $ 4,295 |
BALANCE SHEET COMPONENTS - Shor
BALANCE SHEET COMPONENTS - Short-Term Investments (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Debt Securities, Available-for-sale, Maturity, Fair Value, Rolling Maturity [Abstract] | ||
Due within one year | $ 463,940 | |
Due in one year through three years | 164,388 | |
Total | $ 628,328 | $ 210,694 |
BALANCE SHEET COMPONENTS - Prop
BALANCE SHEET COMPONENTS - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment—gross | $ 212,904 | $ 146,973 | |
Less accumulated depreciation and amortization | (127,793) | (88,901) | |
Total property and equipment—net | 85,111 | 58,072 | |
Depreciation | $ 43,700 | 36,200 | $ 26,400 |
Computer, production, engineering and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (In months) | 36 months | ||
Total property and equipment—gross | $ 131,805 | 85,280 | |
Demonstration units | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (In months) | 12 months | ||
Total property and equipment—gross | $ 53,547 | 46,387 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment—gross | $ 19,916 | 10,562 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (In months) | 60 months | ||
Total property and equipment—gross | $ 7,636 | $ 4,744 |
BALANCE SHEET COMPONENTS - Inta
BALANCE SHEET COMPONENTS - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 06, 2016 | Aug. 22, 2016 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 |
Finite-lived intangible assets: | ||||||||||||||
Finite-lived intangible assets, gross | $ 54,150 | $ 12,130 | ||||||||||||
Total intangible assets, gross | 54,150 | 28,230 | ||||||||||||
Less: | ||||||||||||||
Accumulated amortization | (8,784) | (2,229) | ||||||||||||
Intangible assets, net | $ 45,366 | $ 26,001 | $ 26,001 | $ 0 | $ 26,001 | $ 0 | 45,366 | 26,001 | ||||||
Finite-lived Intangible Assets [Roll Forward] | ||||||||||||||
Intangible assets, net—beginning balance | 26,001 | 0 | 26,001 | 0 | ||||||||||
Amortization of intangible assets | (2,424) | $ (1,669) | $ (1,356) | $ (1,106) | (608) | $ (608) | $ (608) | $ (405) | (6,555) | (2,229) | ||||
Intangible assets, net—ending balance | $ 45,366 | $ 26,001 | 45,366 | 26,001 | ||||||||||
Calm Acquisition | ||||||||||||||
Less: | ||||||||||||||
Estimated Life (in years) | 4 years 10 months | |||||||||||||
Finite-lived Intangible Assets [Roll Forward] | ||||||||||||||
Intangible assets acquired | $ 25,920 | $ 28,230 | ||||||||||||
In-process R&D | ||||||||||||||
Indefinite-lived intangible asset: | ||||||||||||||
In-process R&D | 0 | 16,100 | ||||||||||||
Developed technology | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Finite-lived intangible assets, gross | 47,500 | 7,300 | ||||||||||||
Less: | ||||||||||||||
Accumulated amortization | (6,956) | (1,314) | ||||||||||||
Estimated Life (in years) | 5 years | |||||||||||||
Developed technology | PernixData Acquisition | ||||||||||||||
Finite-lived Intangible Assets [Roll Forward] | ||||||||||||||
Intangible assets acquired | $ 3,570 | |||||||||||||
Customer relationships | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Finite-lived intangible assets, gross | 6,650 | 4,830 | ||||||||||||
Less: | ||||||||||||||
Accumulated amortization | $ (1,828) | $ (915) | ||||||||||||
Customer relationships | PernixData Acquisition | ||||||||||||||
Finite-lived Intangible Assets [Roll Forward] | ||||||||||||||
Intangible assets acquired | $ 4,600 |
BALANCE SHEET COMPONENTS - Futu
BALANCE SHEET COMPONENTS - Future Amortization Expense (Details) $ in Thousands | Jul. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 9,551 |
2,020 | 9,511 |
2,021 | 9,511 |
2,022 | 8,314 |
2,023 | 3,971 |
Thereafter | 4,508 |
Total | $ 45,366 |
BALANCE SHEET COMPONENTS BALANC
BALANCE SHEET COMPONENTS BALANCE SHEET COMPONENTS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Goodwill [Roll Forward] | ||
Balance at July 31, 2016 | $ 16,672 | $ 0 |
Balance at July 31, 2018 | 87,759 | 16,672 |
Calm Acquisition | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 4,819 | |
PernixData Acquisition | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | $ 11,853 | |
Netsil Inc. | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 53,085 | |
Minjar, Inc. | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | $ 18,002 |
BALANCE SHEET COMPONENTS BALA59
BALANCE SHEET COMPONENTS BALANCE SHEET COMPONENTS - Other Assets, Non-current (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Other tax assets—non-current | $ 30,927 | $ 0 |
Deferred Tax Assets, Net, Noncurrent | 3,420 | |
Deferred tax assets—non-current | 2,860 | 3,176 |
Other | 4,068 | 4,229 |
Total other assets—non-current | $ 37,855 | $ 7,649 |
BALANCE SHEET COMPONENTS - Accr
BALANCE SHEET COMPONENTS - Accrued Compensation Benefits (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Employee-related Liabilities, Current [Abstract] | ||
Contributions to ESPP withheld | $ 21,931 | $ 14,371 |
Accrued commissions | 21,660 | 20,388 |
Accrued bonus | 12,129 | 7,342 |
Accrued vacation | 10,548 | 6,286 |
Payroll taxes payable | 9,563 | 3,434 |
Other | 9,567 | 5,700 |
Total accrued compensation and benefits | $ 85,398 | $ 57,521 |
BALANCE SHEET COMPONENTS - Ac61
BALANCE SHEET COMPONENTS - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Income taxes payable | $ 20,863 | $ 3,873 |
Accrued professional services | 5,838 | 4,167 |
Other | 4,981 | 1,667 |
Total accrued expenses and other current liabilities | $ 31,682 | $ 9,707 |
DEBT - Additional Information (
DEBT - Additional Information (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2018USD ($)day | Sep. 30, 2016USD ($) | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||
Gain (Loss) on Extinguishment of Debt | $ (3,300,000) | $ 0 | $ (3,320,000) | $ 0 | ||
Write off of Deferred Debt Issuance Cost | 1,700,000 | |||||
Gain (Loss) on Extinguishment of Debt, before Write off of Debt Issuance Cost | $ (1,600,000) | |||||
Payments for convertible note hedges | $ 143,175,000 | $ 0 | $ 0 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 11.8 | |||||
Exercise Price per Share (in dollars per share) | $ / shares | $ 73.46 | |||||
Proceeds from Issuance of Warrants | $ 88,000,000 | |||||
Net Transaction Cost of the Note Hedges and Warrants | $ 55,200,000 | |||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | shares | 3.9 | |||||
Share Price Threshold for Dilutive Effect of Convertible Debt | $ / shares | $ 73.46 | |||||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants, $10 Increase in Share Price | shares | 4.9 | |||||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | shares | 1.4 | |||||
Share Price Threshold for Dilutive Effect of Warrants | $ / shares | $ 83.46 | |||||
Senior Notes [Member] | Senior Notes Due April 15, 2019 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 75,000,000 | |||||
Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 575,000,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |||||
Convertible Debt | $ 75,000,000 | |||||
Debt Instrument, Convertible, Conversion Ratio | 20.4705 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 48.85 | |||||
Payments for convertible note hedges | $ 143,175,000 | |||||
Debt Instrument, Convertible, Threshold Trading Days | day | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | day | 30 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||
Debt Instrument, Convertible, Carrying Amount of Liability Component | $ 423,400,000 | |||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 151,600,000 | |||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 11,500,000 | |||||
Convertible Debt Issuance Cost | $ 10,781,000 | 10,800,000 | ||||
Debt Issuance Cost, Gross, Noncurrent | 707,000 | 700,000 | ||||
Debt Instrument, Convertible, Transaction Costs Attributable to Liability Component | 8,500,000 | |||||
Debt Instrument, Convertible, Transaction Costs Attributable to Equity Component | $ 3,000,000 | |||||
Remaining Term of Convertible Debt | 53 months | |||||
Proceeds from Issuance of Warrants | $ 87,975,000 | |||||
Common Class A | ||||||
Debt Instrument [Line Items] | ||||||
Fair value of common stock (in dollars per share) | $ / shares | $ 48.89 | |||||
Common Class A | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98.00% |
DEBT - Proceeds from Debt (Deta
DEBT - Proceeds from Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Payments for convertible note hedges | $ (143,175) | $ 0 | $ 0 | |
Proceeds from Issuance of Warrants | 88,000 | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Convertible Debt Par Amount | $ 575,000 | 575,000 | ||
Convertible Debt Issuance Cost | (10,781) | (10,800) | ||
Payments for convertible note hedges | (143,175) | |||
Proceeds from Issuance of Warrants | 87,975 | |||
Debt Issuance Cost, Gross, Noncurrent | (707) | $ (700) | ||
Proceeds from Debt, Net of Issuance Costs | $ 508,312 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
Convertible Debt, Noncurrent | $ 429,598 | |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Convertible Debt Par Amount | 575,000 | $ 575,000 |
Debt Instrument, Unamortized Discount | (137,719) | |
Unamortized Debt Issuance Expense | (7,683) | |
Debt Instrument, Convertible, Carrying Amount of Equity Component, Excluding Equity Issuance Costs | $ 148,598 | |
Debt Instrument, Interest Rate, Effective Percentage | 6.62% | |
Debt Instrument, Convertible, Transaction Costs Attributable to Equity Component | $ 3,000 |
DEBT - Interest Expense Recogni
DEBT - Interest Expense Recognized (Details) - Convertible Debt $ in Thousands | 12 Months Ended |
Jul. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |
Amortization of Debt Discount (Premium) | $ 13,909 |
Amortization of Debt Issuance Costs | 776 |
Interest Expense, Debt | $ 14,685 |
COMMITMENTS AND CONTINGENCIES66
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,019 | $ 26,158 | ||
2,020 | 23,849 | ||
2,021 | 21,749 | ||
2,022 | 20,739 | ||
2,023 | 17,115 | ||
Thereafter | 12,718 | ||
Total | 122,328 | ||
Operating leases, rent expense | 19,000 | $ 12,700 | $ 7,600 |
Contract Manufacturer | |||
Loss Contingencies [Line Items] | |||
Purchase obligation | 23,100 | ||
Non-contract Vendors [Member] | |||
Loss Contingencies [Line Items] | |||
Purchase obligation | $ 36,700 |
STOCKHOLDERS_ EQUITY (Details)
STOCKHOLDERS’ EQUITY (Details) | Jul. 31, 2018vote$ / sharesshares | Jul. 31, 2017$ / sharesshares | Nov. 01, 2016voteclass | Oct. 31, 2016classshares | Jul. 31, 2016shares |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.000025 | $ 0.000025 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Common stock, number of classes of stock | class | 2 | 2 | |||
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.000025 | $ 0.000025 | |||
Common stock, shares issued (in shares) | 172,858,082 | 154,636,520 | |||
Common stock, shares outstanding (in shares) | 172,858,082 | 154,636,520 | |||
Options outstanding (in shares) | 11,332,554 | 20,334,531 | 26,166,968 | ||
Shares reserved for future issuance (in shares) | 47,815,755 | ||||
2016 Plan | |||||
Class of Stock [Line Items] | |||||
Shares reserved for future issuance (in shares) | 46,133,294 | ||||
RSUs | |||||
Class of Stock [Line Items] | |||||
RSUs outstanding (in shares) | 23,597,499 | 17,376,090 | 12,265,369 | ||
Convertible preferred stock warrants | Common Class B Warrant | |||||
Class of Stock [Line Items] | |||||
Warrants or issued (in shares) | 34,180 | ||||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |||
Common stock, shares issued (in shares) | 135,109,672 | 93,570,171 | |||
Common stock, shares outstanding (in shares) | 135,109,672 | 93,570,171 | |||
Common stock number of votes per share | vote | 1 | 1 | |||
Common Class A | 2016 Plan | |||||
Class of Stock [Line Items] | |||||
Number of shares available for grant (in shares) | 11,169,061 | ||||
Shares reserved for future issuance (in shares) | 22,400,000 | ||||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |||
Common stock, shares issued (in shares) | 37,748,410 | 61,066,349 | |||
Common stock, shares outstanding (in shares) | 37,748,410 | 61,066,349 | |||
Common stock number of votes per share | vote | 10 | 10 | |||
Employee stock purchase plan | |||||
Class of Stock [Line Items] | |||||
Shares reserved for future issuance (in shares) | 1,682,461 |
EQUITY AWARD PLANS - Additional
EQUITY AWARD PLANS - Additional Information (Details) | Aug. 01, 2018shares | Aug. 01, 2017shares | Oct. 31, 2016USD ($)purchase_periodshares | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2017USD ($)$ / sharesshares | Jul. 31, 2016USD ($) | Sep. 30, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance (in shares) | 47,815,755 | ||||||
Period for recognition (in years) | 2 years 8 months 12 days | ||||||
Vested (in shares) | 9,660,757 | 15,241,715 | |||||
Nonvested shares (in shares) | 1,498,288 | 4,403,961 | |||||
Grants in period, weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.41 | $ 6.36 | |||||
Exercises in period, intrinsic value | $ | $ 289,400,000 | $ 73,900,000 | $ 18,300,000 | ||||
Proceeds from Stock Options Exercised | $ | 33,100,000 | 15,600,000 | 3,500,000 | ||||
Options vested in period, fair value | $ | $ 11,500,000 | $ 16,100,000 | $ 23,900,000 | ||||
Early exercised options (in shares) | 11,332,554 | 20,334,531 | |||||
Issuance of common stock upon exercise of stock options (in shares) | 8,672,623 | 4,786,381 | |||||
Dividend yield | $ | $ 0 | ||||||
2016 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance (in shares) | 46,133,294 | ||||||
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% | ||||||
Early Exercised Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Early exercised options (in shares) | 243,148 | ||||||
Number of shares authorized to be repurchased (in shares) | 47,691 | ||||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 14,947,403 | 12,986,597 | |||||
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) | 12 months | ||||||
Number of six-month purchase periods | purchase_period | 2 | ||||||
Purchase price of common stock, percent | 85.00% | ||||||
Issuance of common stock from ESPP purchase (in shares) | 2,417,850 | ||||||
Proceeds from Stock Plans | $ | $ 39,000,000 | ||||||
Employee Stock Options Excluding Performance Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation not yet recognized | $ | $ 647,900,000 | ||||||
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 | ||||||
Number of shares available for grant (in shares) | 11,169,061 | ||||||
Annual increase (in shares) | 18,000,000 | ||||||
Annual increase, percent of outstanding shares | 5.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 8,642,904 | 7,731,826 | |||||
Common Class A | Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance (in shares) | 3,800,000 | ||||||
Annual increase (in shares) | 3,800,000 | ||||||
Annual increase, percent of outstanding shares | 1.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,546,365 | ||||||
Common Class A | Employee Stock | Subsequent Event | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,728,580 | ||||||
Employee stock purchase plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance (in shares) | 1,682,461 | ||||||
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 AWARD PLANS - RSU (Detai
EQUITY AWARD PLANS - RSU (Details) - RSUs - $ / shares | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 17,376,090 | 12,265,369 | |
Granted (in shares) | 14,947,403 | 12,986,597 | |
Released (in shares) | (5,823,800) | (6,146,169) | |
Canceled/forfeited (in shares) | (2,902,194) | (1,729,707) | |
Outstanding, ending balance (in shares) | 23,597,499 | 17,376,090 | |
Grant Date Fair Value per Share | |||
Outstanding (in dollars per share) | $ 31.20 | $ 18.85 | $ 13.23 |
Granted (in dollars per share) | 39.44 | 21.84 | |
Released (in dollars per share) | 19.96 | 15.63 | |
Canceled/forfeited (in dollars per share) | $ 22.34 | $ 13.57 |
EQUITY AWARD PLANS - ESPP (Deta
EQUITY AWARD PLANS - ESPP (Details) - Employee stock purchase plan | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 9 months | 9 months |
Risk-free interest rate | 1.40% | 0.60% |
Volatility | 49.80% | 51.00% |
Dividend yield | 0.00% | 0.00% |
EQUITY AWARD PLANS - Stock Opti
EQUITY AWARD PLANS - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Number of Shares | |||
Beginning balance (in shares) | 20,334,531 | 26,166,968 | |
Options granted (in shares) | 0 | 1,047,950 | |
Options exercised (in shares) | (8,672,623) | (4,786,381) | |
Options canceled/forfeited (in shares) | (329,354) | (2,094,006) | |
Ending balance (in shares) | 11,332,554 | 20,334,531 | 26,166,968 |
Exercisable (in shares) | 11,159,045 | 19,645,676 | |
Vested and expected to vest (in shares) | 11,332,554 | 20,334,531 | |
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 4.59 | $ 4.39 | |
Options granted (in dollars per share) | 0 | 12.14 | |
Options exercised (in dollars per share) | 3.81 | 3.27 | |
Options canceled/forfeited (in dollars per share) | 6.63 | 8.89 | |
Ending balance (in dollars per share) | 5.12 | 4.59 | $ 4.39 |
Exercisable (in dollars per share) | 5.01 | 4.43 | |
Vested and expected to vest (in dollars per share) | $ 5.12 | $ 4.59 | |
Additional Disclosures | |||
Outstanding (in years) | 5 years 6 months 22 days | 6 years 4 months 24 days | 7 years 6 months |
Exercisable (in years) | 5 years 6 months | 6 years 4 months 2 days | |
Vested and expected to vest (in years) | 5 years 6 months 22 days | 6 years 4 months 24 days | |
Outstanding, intrinsic value | $ 496,022 | $ 338,787 | $ 208,101 |
Exercisable, intrinsic value | 489,682 | 330,486 | |
Vested and expected to vest, intrinsic value | $ 496,022 | $ 338,787 | |
Performance Stock Options | |||
Number of Shares | |||
Beginning balance (in shares) | 455,000 | ||
Ending balance (in shares) | 455,000 | ||
Additional Disclosures | |||
Weighted average fair value (in dollars per share) | $ 3.78 |
EQUITY AWARD PLANS - Determinat
EQUITY AWARD PLANS - Determination of Fair Value (Details) - $ / shares | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of common stock (in dollars per share) | $ 12.14 | $ 14.81 |
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate | 1.30% | 1.60% |
Volatility | 52.00% | 42.00% |
Dividend yield | 0.00% | 0.00% |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 9 months | 9 months |
Risk-free interest rate | 1.40% | 0.60% |
Volatility | 49.80% | 51.00% |
Dividend yield | 0.00% | 0.00% |
EQUITY AWARD PLANS - Stock Base
EQUITY AWARD PLANS - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | $ 55,396 | $ 44,946 | $ 42,011 | $ 35,515 | $ 37,805 | $ 50,351 | $ 52,607 | $ 90,728 | $ 177,868 | $ 231,491 | $ 20,056 |
Period for recognition (in years) | 2 years 8 months 12 days | ||||||||||
Cost of product revenue [Domain] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | $ 2,580 | 3,066 | 391 | ||||||||
Cost of revenue, support and other services | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | 2,789 | 1,951 | 2,133 | 2,072 | 2,201 | 2,471 | 2,389 | 3,350 | 8,945 | 10,411 | 968 |
Sales and marketing | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | 17,301 | 18,051 | 15,942 | 13,766 | 12,972 | 15,726 | 15,528 | 33,891 | 65,060 | 78,117 | 8,006 |
Research and development | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | 25,350 | 16,474 | 17,023 | 15,542 | 19,218 | 27,041 | 28,759 | 34,026 | 74,389 | 109,044 | 6,259 |
General and administrative | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Total stock-based compensation expense | $ 9,264 | $ 7,836 | $ 6,229 | $ 3,565 | $ 2,772 | $ 4,503 | $ 5,083 | $ 18,495 | $ 26,894 | $ 30,853 | $ 4,432 |
NET LOSS AND UNAUDITED NET LO74
NET LOSS AND UNAUDITED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (87,369) | $ (85,674) | $ (62,631) | $ (61,487) | $ (66,132) | $ (96,835) | $ (76,369) | $ (140,302) | $ (297,161) | $ (379,638) | $ (108,233) |
Weighted-average shares—basic and diluted (in shares) | 164,091,302 | 128,295,563 | 43,970,381 | ||||||||
Net loss per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (0.51) | $ (0.51) | $ (0.39) | $ (0.39) | $ (0.43) | $ (0.67) | $ (0.54) | $ (1.89) | $ (1.81) | $ (2.96) | $ (2.46) |
NET LOSS AND UNAUDITED NET LO75
NET LOSS AND UNAUDITED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 36,599,202 | 39,435,334 | 116,530,157 |
Convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 76,319,511 |
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) | 34,930,053 | 37,710,621 | 38,432,337 |
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) | 1,310,653 | 1,447,385 | 0 |
Common stock subject to repurchase | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 47,691 | 243,148 | 954,215 |
Contingently issuable shares pursuant to a business combination | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 276,625 | 0 | 0 |
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) | 34,180 | 34,180 | 824,094 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Before Provision for Income Taxes, Domestic and Foreign (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ (201,666) | $ (304,363) | $ (67,776) | ||||||||
Foreign | (88,048) | (70,423) | (38,140) | ||||||||
Loss before provision for income taxes | $ (83,251) | $ (86,517) | $ (60,718) | $ (59,228) | $ (64,577) | $ (94,196) | $ (75,822) | $ (140,191) | $ (289,714) | $ (374,786) | $ (105,916) |
INCOME TAXES - Schedule of Prov
INCOME TAXES - Schedule of Provision for Income Taxes, Current and Deferred (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Current: | |||||||||||
U.S. federal | $ 2,059 | $ 0 | $ 0 | ||||||||
State and local | 429 | 193 | 140 | ||||||||
Foreign | 8,541 | 8,196 | 3,172 | ||||||||
Total current taxes | 11,029 | 8,389 | 3,312 | ||||||||
Deferred: | |||||||||||
U.S. federal | (3,387) | (1,342) | 0 | ||||||||
State and local | (718) | 13 | 0 | ||||||||
Foreign | 523 | (2,208) | (995) | ||||||||
Total deferred taxes | (3,582) | (3,537) | (995) | ||||||||
Total | $ 4,118 | $ (843) | $ 1,913 | $ 2,259 | $ 1,555 | $ 2,639 | $ 547 | $ 111 | $ 7,447 | $ 4,852 | $ 2,317 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. federal income tax at statutory rate | $ (75,779) | $ (127,427) | $ (36,011) | ||||||||
U.S. tax reform impact | 93,352 | 0 | 0 | ||||||||
Change in valuation allowance | 25,274 | 86,941 | 19,268 | ||||||||
Effect of foreign operations | 26,117 | 16,891 | 15,144 | ||||||||
Stock-based compensation | (73,631) | 6,701 | 3,655 | ||||||||
Warrant revaluation | 0 | 7,185 | (681) | ||||||||
Non-deductible expenses | 2,115 | 1,693 | 802 | ||||||||
State income taxes | (290) | 206 | 140 | ||||||||
Transfer pricing adjustments | 4,584 | 11,822 | 0 | ||||||||
Intangible asset migration | 4,461 | 0 | 0 | ||||||||
Other | 1,244 | 840 | 0 | ||||||||
Total | $ 4,118 | $ (843) | $ 1,913 | $ 2,259 | $ 1,555 | $ 2,639 | $ 547 | $ 111 | $ 7,447 | $ 4,852 | $ 2,317 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Federal statutory income tax rate | 26.10% | |||
Deferred tax assets, net, noncurrent | $ 3,420 | |||
Valuation allowance for deferred tax assets | $ 226,987 | 161,195 | ||
Valuation allowance increase | (65,800) | 69,800 | ||
Cash and cash equivalents | 305,975 | 138,359 | $ 99,209 | $ 67,879 |
Unrecognized tax benefits that would impact effective tax rate | 7,400 | |||
Provisional income tax expense | 93,800 | |||
Non-US | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Cash and cash equivalents | 146,500 | |||
United States of America, Dollars | Non-US | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Cash and cash equivalents | 122,600 | |||
Federal | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net operating loss carryforwards | 853,200 | |||
Federal | Research Credit Carryforwards | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Research credit carryforwards | 43,300 | |||
State | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net operating loss carryforwards | 562,100 | |||
State | Research Credit Carryforwards | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Research credit carryforwards | $ 30,700 | |||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2015-07 | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Deferred tax assets, net, noncurrent | (3,300) | |||
Deferred tax liabilities, net, current | $ (3,300) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 162,914 | $ 135,929 |
Deferred revenue | 27,577 | 2,378 |
Tax credit carryforward | 47,839 | 13,100 |
Property and equipment | 0 | 1,118 |
Accruals and reserves | 8,370 | 7,427 |
Stock-based compensation expense | 21,252 | 27,512 |
Total deferred tax assets | 267,952 | 187,464 |
Deferred tax liabilities: | ||
Deferred commission expense | (27,829) | (22,535) |
Goodwill and intangible assets | (5,909) | (483) |
Property and equipment | (3,870) | 0 |
Other | (497) | (75) |
Total deferred tax liabilities | (38,105) | (23,093) |
Valuation allowance | (226,987) | (161,195) |
Net deferred tax assets | $ 2,860 | $ 3,176 |
INCOME TAXES INCOME TAXES - Sch
INCOME TAXES INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning balance | $ 42,655 | $ 19,711 |
Increases related to current year tax positions | 58,727 | 22,571 |
Increases related to prior year tax positions | 4,893 | 373 |
Decreases related to prior year tax positions | (14,559) | 0 |
Balance, ending balance | $ 91,716 | $ 42,655 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Apr. 30, 2017USD ($) | Jan. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Jul. 31, 2018USD ($)segment | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | 648,805 | 488,079 | 319,296 | ||||||||
Long-lived assets | $ 130,000 | $ 63,300 | 130,000 | 63,300 | |||||||
Europe, the Middle East and Africa | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | 224,392 | 138,815 | 65,599 | ||||||||
Asia-Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | 240,247 | 186,864 | 96,723 | ||||||||
Other Americas | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | $ 42,013 | $ 32,145 | $ 21,792 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Lightspeed Venture Partners | Jul. 31, 2018 | Sep. 05, 2016 | Jul. 31, 2016 |
Lightspeed Venture Partners | Nutanix, Inc. | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling owners | 36.70% | ||
Lightspeed Venture Partners | PernixData [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling owners | 26.40% | ||
Lightspeed Venture Partners | Nutanix, Inc. | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling owners | 6.70% |
SELECTED QUARTERLY FINANCIAL 84
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total revenue | $ 303,748 | $ 289,413 | $ 286,744 | $ 275,552 | $ 252,458 | $ 205,670 | $ 199,214 | $ 188,561 | $ 1,155,457 | $ 845,903 | $ 503,410 |
Total cost of revenue | 73,265 | 95,615 | 108,528 | 108,622 | 97,517 | 83,206 | 76,846 | 69,762 | 386,030 | 327,331 | 170,787 |
Gross profit | 230,483 | 193,798 | 178,216 | 166,930 | 154,941 | 122,464 | 122,368 | 118,799 | 769,427 | 518,572 | 332,623 |
Sales and marketing | 183,191 | 169,860 | 151,201 | 145,405 | 134,276 | 126,746 | 111,374 | 128,625 | 649,657 | 501,021 | 286,584 |
Research and development | 97,050 | 81,291 | 70,924 | 64,512 | 67,817 | 74,607 | 70,914 | 75,281 | 313,777 | 288,619 | 116,400 |
General and administrative | 29,472 | 24,929 | 15,948 | 16,052 | 16,878 | 15,610 | 15,481 | 29,372 | 86,401 | 77,341 | 34,265 |
Total operating expenses | 309,713 | 276,080 | 238,073 | 225,969 | 218,971 | 216,963 | 197,769 | 233,278 | 1,049,835 | 866,981 | 437,249 |
Loss from operations | (79,230) | (82,282) | (59,857) | (59,039) | (64,030) | (94,499) | (75,401) | (114,479) | (280,408) | (348,409) | (104,626) |
Other expense, net | (4,021) | (4,235) | (861) | (189) | (547) | 303 | (421) | (25,712) | (9,306) | (26,377) | (1,290) |
Loss before provision for income taxes | (83,251) | (86,517) | (60,718) | (59,228) | (64,577) | (94,196) | (75,822) | (140,191) | (289,714) | (374,786) | (105,916) |
Provision for income taxes | 4,118 | (843) | 1,913 | 2,259 | 1,555 | 2,639 | 547 | 111 | 7,447 | 4,852 | 2,317 |
Net loss | $ (87,369) | $ (85,674) | $ (62,631) | $ (61,487) | $ (66,132) | $ (96,835) | $ (76,369) | $ (140,302) | $ (297,161) | $ (379,638) | $ (108,233) |
Net income (loss) per share attributable to common stockholders—basic and diluted (in dollars per share) | $ (0.51) | $ (0.51) | $ (0.39) | $ (0.39) | $ (0.43) | $ (0.67) | $ (0.54) | $ (1.89) | $ (1.81) | $ (2.96) | $ (2.46) |
Total stock-based compensation expense | $ 55,396 | $ 44,946 | $ 42,011 | $ 35,515 | $ 37,805 | $ 50,351 | $ 52,607 | $ 90,728 | $ 177,868 | $ 231,491 | $ 20,056 |
Amortization of intangible assets | 2,424 | 1,669 | 1,356 | 1,106 | 608 | 608 | 608 | 405 | 6,555 | 2,229 | |
Cost of product revenue | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total stock-based compensation expense | 692 | 634 | 684 | 570 | 642 | 610 | 848 | 966 | |||
Amortization of intangible assets | 2,135 | 1,447 | 1,164 | 895 | 358 | 358 | 360 | 238 | |||
Cost of revenue, support and other services | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total stock-based compensation expense | 2,789 | 1,951 | 2,133 | 2,072 | 2,201 | 2,471 | 2,389 | 3,350 | 8,945 | 10,411 | 968 |
Sales and marketing | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total stock-based compensation expense | 17,301 | 18,051 | 15,942 | 13,766 | 12,972 | 15,726 | 15,528 | 33,891 | 65,060 | 78,117 | 8,006 |
Amortization of intangible assets | 289 | 222 | 192 | 211 | 250 | 250 | 248 | 167 | |||
Research and development | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total stock-based compensation expense | 25,350 | 16,474 | 17,023 | 15,542 | 19,218 | 27,041 | 28,759 | 34,026 | 74,389 | 109,044 | 6,259 |
General and administrative | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total stock-based compensation expense | 9,264 | 7,836 | 6,229 | 3,565 | 2,772 | 4,503 | 5,083 | 18,495 | 26,894 | 30,853 | 4,432 |
Product | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total revenue | 224,650 | 221,117 | 223,170 | 219,052 | 201,472 | 160,076 | 158,213 | 153,536 | 887,989 | 673,297 | 413,910 |
Total cost of revenue | 41,068 | 66,680 | 83,217 | 85,162 | 76,187 | 62,593 | 58,403 | 52,210 | 276,127 | 249,393 | 133,541 |
Support, entitlements and other services | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Total revenue | 79,098 | 68,296 | 63,574 | 56,500 | 50,986 | 45,594 | 41,001 | 35,025 | 267,468 | 172,606 | 89,500 |
Total cost of revenue | $ 32,197 | $ 28,935 | $ 25,311 | $ 23,460 | $ 21,330 | $ 20,613 | $ 18,443 | $ 17,552 | $ 109,903 | $ 77,938 | $ 37,246 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event - Mainframe2, Inc. $ / shares in Units, $ in Millions | Aug. 24, 2018USD ($)$ / sharesshares |
Subsequent Event [Line Items] | |
Consideration transferred | $ 129.7 |
Cash payment to acquire business | $ 26.7 |
Business acquisition equity issued (in shares) | shares | 1,807,576 |
Equity interests issued and issuable (in shares) | $ 103 |
Share price (in dollars per share) | $ / shares | $ 56.97 |
Holdback arrangement, amount | $ 6.6 |
Deferred payment arrangement, number of shares (in shares) | shares | 643,746 |
Holdback arrangement, fair value of common stock, amount | $ 36.7 |