Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2018 | Nov. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HEALTHEQUITY INC | |
Entity Central Index Key | 1,428,336 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 62,388,638 |
Condensed consolidated balance
Condensed consolidated balance sheets (unaudited) - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 289,007 | $ 199,472 |
Marketable securities, at fair value | 41,250 | 40,797 |
Total cash, cash equivalents and marketable securities | 330,257 | 240,269 |
Accounts receivable, net of allowance for doubtful accounts as of October 31, 2018 and January 31, 2018 of $153 and $208, respectively | 24,465 | 21,602 |
Inventories | 164 | 215 |
Other current assets | 8,953 | 3,310 |
Total current assets | 363,839 | 265,396 |
Property and equipment, net | 8,743 | 7,836 |
Intangible assets, net | 80,730 | 83,635 |
Goodwill | 4,651 | 4,651 |
Deferred tax asset | 1,435 | 5,461 |
Other assets | 18,300 | 2,180 |
Total assets | 477,698 | 369,159 |
Current liabilities | ||
Accounts payable | 1,495 | 2,420 |
Accrued compensation | 9,933 | 12,549 |
Accrued liabilities | 5,972 | 5,521 |
Total current liabilities | 17,400 | 20,490 |
Long-term liabilities | ||
Other long-term liabilities | 2,836 | 2,395 |
Deferred tax liability | 661 | 0 |
Total long-term liabilities | 3,497 | 2,395 |
Total liabilities | 20,897 | 22,885 |
Commitments and contingencies (see note 6) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of October 31, 2018 and January 31, 2018, respectively | 0 | 0 |
Common stock, $0.0001 par value, 900,000 shares authorized, 62,380 and 60,825 shares issued and outstanding as of October 31, 2018 and January 31, 2018, respectively | 6 | 6 |
Additional paid-in capital | 298,064 | 261,237 |
Accumulated other comprehensive loss | 0 | (269) |
Accumulated earnings | 158,731 | 85,300 |
Total stockholders’ equity | 456,801 | 346,274 |
Total liabilities and stockholders’ equity | $ 477,698 | $ 369,159 |
Condensed consolidated balanc_2
Condensed consolidated balance sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 153 | $ 208 |
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, issued (in shares) | 62,380,000 | 60,825,000 |
Common stock, outstanding (in shares) | 62,380,000 | 60,825,000 |
Condensed consolidated statemen
Condensed consolidated statements of operations and comprehensive income (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Revenue: | ||||
Total revenue | $ 70,495 | $ 56,789 | $ 211,466 | $ 169,089 |
Cost of revenue: | ||||
Total cost of revenue | 24,678 | 23,062 | 74,718 | 65,819 |
Gross profit | 45,817 | 33,727 | 136,748 | 103,270 |
Operating expenses: | ||||
Sales and marketing | 7,502 | 5,892 | 21,605 | 15,707 |
Technology and development | 8,678 | 6,866 | 25,055 | 19,905 |
General and administrative | 9,161 | 6,252 | 24,561 | 18,354 |
Amortization of acquired intangible assets | 1,490 | 1,155 | 4,438 | 3,320 |
Total operating expenses | 26,831 | 20,165 | 75,659 | 57,286 |
Income from operations | 18,986 | 13,562 | 61,089 | 45,984 |
Other expense: | ||||
Other expense, net | (1,555) | (395) | (1,631) | (523) |
Total other expense | (1,555) | (395) | (1,631) | (523) |
Income before income taxes | 17,431 | 13,167 | 59,458 | 45,461 |
Income tax provision (benefit) | 1,745 | 2,685 | (1,322) | 4,004 |
Net income | $ 15,686 | $ 10,482 | $ 60,780 | $ 41,457 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.25 | $ 0.17 | $ 0.98 | $ 0.69 |
Diluted (in usd per share) | $ 0.25 | $ 0.17 | $ 0.96 | $ 0.67 |
Weighted-average number of shares used in computing net income per share: | ||||
Basic (in shares) | 62,088 | 60,562 | 61,718 | 60,160 |
Diluted (in shares) | 63,923 | 61,868 | 63,628 | 61,703 |
Comprehensive income: | ||||
Net income | $ 15,686 | $ 10,482 | $ 60,780 | $ 41,457 |
Other comprehensive gain (loss): | ||||
Unrealized gain (loss) on available-for-sale marketable securities, net of tax | 0 | 7 | 0 | (23) |
Comprehensive income | 15,686 | 10,489 | 60,780 | 41,434 |
Service revenue | ||||
Revenue: | ||||
Total revenue | 25,041 | 22,962 | 74,797 | 68,258 |
Cost of revenue: | ||||
Total cost of revenue | 17,562 | 17,251 | 52,808 | 47,824 |
Custodial revenue | ||||
Revenue: | ||||
Total revenue | 31,564 | 22,105 | 90,713 | 62,709 |
Cost of revenue: | ||||
Total cost of revenue | 3,551 | 2,784 | 10,492 | 8,370 |
Interchange revenue | ||||
Revenue: | ||||
Total revenue | 13,890 | 11,722 | 45,956 | 38,122 |
Cost of revenue: | ||||
Total cost of revenue | $ 3,565 | $ 3,027 | $ 11,418 | $ 9,625 |
Condensed consolidated statem_2
Condensed consolidated statements of cash flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 60,780 | $ 41,457 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,498 | 11,142 |
Loss on disposal of software development costs and other | 844 | 97 |
Deferred taxes | 394 | 5,093 |
Stock-based compensation | 15,461 | 10,468 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,863) | (4,482) |
Inventories | 51 | 423 |
Other assets | (4,568) | (3,027) |
Accounts payable | (1,087) | (425) |
Accrued compensation | (2,617) | (2,219) |
Accrued liabilities | 451 | 2,586 |
Other long-term liabilities | 441 | 770 |
Net cash provided by operating activities | 80,785 | 61,883 |
Cash flows from investing activities: | ||
Purchases of intangible member assets | (1,195) | (15,529) |
Acquisition of a business | 0 | (2,882) |
Purchases of marketable securities | (574) | (343) |
Purchases of property and equipment | (3,467) | (3,382) |
Purchases of software and capitalized software development costs | (7,352) | (7,654) |
Net cash used in investing activities | (12,588) | (29,790) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 21,338 | 12,320 |
Net cash provided by financing activities | 21,338 | 12,320 |
Increase in cash and cash equivalents | 89,535 | 44,413 |
Beginning cash and cash equivalents | 199,472 | 139,954 |
Ending cash and cash equivalents | 289,007 | 184,367 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable or accrued liabilities at period end | 6 | 238 |
Exercise of common stock options receivable | 28 | 0 |
Software | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchases of intangible member assets accrued at period end | 156 | 501 |
Acquired intangible member assets | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchases of intangible member assets accrued at period end | $ 0 | $ 3,429 |
Summary of business and signifi
Summary of business and significant accounting policies | 9 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of business and significant accounting policies | Summary of business and significant accounting policies HealthEquity, Inc. was incorporated in the state of Delaware on September 18, 2002. The Company offers a full range of innovative solutions for managing health care accounts (Health Savings Accounts, Health Reimbursement Arrangements, and Flexible Spending Accounts) for health plans, insurance companies, and third-party administrators. Principles of consolidation The condensed consolidated financial statements include the accounts of HealthEquity, Inc. and its wholly owned subsidiaries, HealthEquity Trust Company, HEQ Insurance Services, Inc., HealthEquity Advisors, LLC and HealthEquity Retirement Services, LLC (collectively referred to as the "Company"). The Company has a 22% ownership interest in a limited partnership for investment in and the management of early stage companies in the healthcare industry; this partnership interest is accounted for using the equity method of accounting. The investment was approximately $0.2 million as of October 31, 2018 and is included in other assets on the accompanying condensed consolidated balance sheet. The Company has a 1% ownership interest in a limited partnership that engages in the development of technology-based financial healthcare products. The Company elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting to account for the investment. The investment was $0.5 million as of October 31, 2018 and is included in other assets on the accompanying condensed consolidated balance sheet. Acquisitions of businesses are accounted for as business combinations, and accordingly, the results of operations of acquired businesses are included in the consolidated financial statements from the date of acquisition. All significant intercompany balances and transactions have been eliminated. Basis of presentation The accompanying condensed consolidated financial statements as of October 31, 2018 and for the three and nine months ended October 31, 2018 and 2017 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended January 31, 2018 . The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Recent adopted accounting pronouncements Adoption of ASC 606 In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606") , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU and related subsequent amendments replaces most existing revenue recognition guidance in GAAP. The standard permits the use of either the retrospective or cumulative effect transition method (modified retrospective method). The Company adopted ASC 606 on February 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The Company recorded the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period. The adoption of the preceding standard did not have a material impact on the Company's revenue for the three and nine months ended October 31, 2018. Effective February 1, 2018, the Company capitalizes incremental contract acquisition costs, such as sales commissions, previously included in sales and marketing expenses in the condensed consolidated statement of operations, and amortizes these costs over the average economic life of an HSA Member. The Company's prior practice was to fully expense sales commissions when the HSA Member was added to the Company's platform. The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,008 $ 98,308 The impact of adoption on the Company's condensed consolidated statement of operations for the three and nine months ended October 31, 2018 is as follows: Three months ended October 31, 2018 Nine months ended October 31, 2018 (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 7,502 $ 7,658 $ (156 ) $ 21,605 $ 22,147 $ (542 ) Income from operations 18,986 18,830 156 61,089 60,547 542 Income tax provision (benefit) 1,745 1,675 70 (1,322 ) (1,530 ) 208 Net income $ 15,686 $ 15,600 $ 86 $ 60,780 $ 60,446 $ 334 The impact of adoption on the Company's condensed consolidated balance sheet as of October 31, 2018 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 8,953 $ 7,552 $ 1,401 Deferred tax asset 1,435 5,111 (3,676 ) Other assets 18,300 2,022 16,278 Deferred tax liability 661 — 661 Accumulated earnings $ 158,731 $ 145,389 $ 13,342 Disaggregation of revenue. The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the condensed consolidated statements of operations. All of the Company's sources of revenue are deemed to be revenue contracts with customers. Each revenue source is affected differently by economic factors as it relates to the nature, amount, timing and uncertainty. Costs to obtain or fulfill a contract. ASC 606 requires capitalizing the costs of obtaining a contract when those costs are incremental and expected to be recovered. Since incremental commissions paid to sales team members as a result of obtaining contracts are recoverable, the Company recorded a $17.2 million cumulative catch-up capitalized asset on February 1, 2018. As of October 31, 2018, the net amount capitalized as contract costs was $17.6 million , which is included in other current assets and other assets. In order to determine the amortization period for sales commissions contract costs, the Company applied the portfolio approach. Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA Member and 401(k) customer relationship, which is estimated to be 15 years and 10 years, respectively. Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the condensed consolidated statement of operations. Performance obligations. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Amounts excluded are not significant to the Company's condensed consolidated statements of operations. Service revenue. The Company hosts its platform, prepares statements, provides a mechanism for spending funds, and provides customer support services. All of these services are consumed as they are received. The Company will continue to recognize service revenue on a monthly basis as it transfers control and satisfies its performance obligations. Custodial revenue. The Company deposits custodial cash and investment assets at federally-insured custodial depository partners and with an investment partner. The deposit of funds represents a service that is simultaneously received and consumed by the custodial depository bank partners and investment partner. The Company will continue to recognize custodial revenue each month based on the amount received by its custodial bank partners and investment partners. Interchange revenue. The Company satisfies its interchange performance obligation each time payments are made with our cards via payment networks. The Company will continue to recognize interchange revenue in the month the payment transaction occurs. Contract balances. The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. The Company's deferred revenue as of October 31, 2018 and January 31, 2018 was $0.4 million and $0.5 million , respectively. The balances related to cash received in advance for a certain interchange revenue arrangement. The Company expects to satisfy its remaining obligations for this arrangement. Significant judgments. The Company makes no significant judgments in determining the amount or timing of revenue recognition. The Company has estimated the average economic life of an HSA Member and a 401(k) customer relationship to be 15 years and 10 years, respectively, and which has been determined to be the amortization period for the capitalized sales commissions contract costs. Practical expedients. The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level. The Company has also applied the practical expedient to recognized incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. Adoption of ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities . In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which clarifies certain aspects of the guidance issued in ASU 2016-01. The amendments in these updates revise an entity's accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The Company adopted these ASUs on February 1, 2018 using the modified retrospective method. The Company recorded the cumulative effect as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period.The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 due to the adoption of ASU 2016-01 were as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Deferred tax asset $ 5,461 $ (87 ) $ 5,374 Accumulated other comprehensive loss $ (269 ) $ 269 $ — Accumulated earnings $ 85,300 $ (356 ) $ 84,944 This ASU also eliminated the cost method of accounting for investments in equity securities that do not have readily determinable fair values and permits the election of a measurement alternative that allows such securities to be recorded at cost, less impairment, if any, plus or minus changes resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer. The Company adopted this provision on a prospective basis as it relates to its 1% ownership interest in a limited partnership and elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting. Gains and losses resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer or impairment will be recorded through net income in the period incurred. The impact of the adoption on the Company's condensed consolidated financial statements as of and for the three and nine months ended October 31, 2018 was not significant. Adoption of ASU 2018-02 In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which gives companies the option to reclassify between accumulated other comprehensive income ("AOCI") and retained earnings the income tax rate differential that has become stranded in AOCI as a result of the enactment of the Tax Cuts and Jobs Act and the revaluation of certain deferred tax assets and liabilities at the new federal income tax rate of 21%. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2018. As a result of adopting this standard, the reclassification of the income tax effects of this tax reform during the year ended January 31, 2018 resulted in an increase to retained earnings and a decrease to AOCI in the amount of $45,000 related to the decrease in the federal corporate income tax rate. The Company's policy is to use the portfolio approach in releasing income tax effects from AOCI. Adoption of ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory , which updates the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Adoption of ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), which provides guidance on the classification of certain cash receipts and cash payments. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Adoption of ASU 2017-09 In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about changes to the terms or conditions of a share-based payment award. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018, and prospectively applies this standard to awards modified on or after the adoption date. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Recent issued accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (codified as "ASC 842"), which sets out the principles for the recognition, measurement, presentation and disclosure for both parties to a contract (i.e., lessees and lessors). ASC 842 supersedes the previous leases standard, ASC 840 leases. ASC 842 is effective for financial statements issued for reporting periods beginning after December 15, 2018 and requires a modified retrospective transition, and provides for certain practical expedients; early adoption is permitted. In July 2018, the FASB issued ASU 2018-11- Leases ("Topic 842") – Targeted Improvements, which provides an additional transition method to adopt the new lease standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. The Company will adopt ASC 842 effective February 1, 2019, using the alternative transition method under Topic 842. Although the Company is in the process of evaluating the impact of adoption of ASC 842 on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company’s balance sheet for facility operating lease agreements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost be presented at the net amount expected to be collected. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company does not plan to early adopt this ASU. The Company believes the adoption of this ASU will have an immaterial impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes step two from the goodwill impairment test. As a result, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units' fair value. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption; however, it does not believe this ASU will have a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, "Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. As this relates to disclosure only, the Company believes the adoption of this ASU will have an immaterial impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU allows the capitalization of implementation costs incurred in a hosting arrangement. This ASU is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the potential effect of this ASU on the consolidated financial statements. In August 2018, the SEC adopted a final rule under SEC Release No. 33-10532, Disclosure Update and Simplification , that amends certain disclosure requirements that were duplicative, overlapping, outdated or superseded. The amendments also expanded the disclosure requirements relating to stockholders' equity for interim financial statements, to require changes in stockholders’ equity, in the form of reconciliation, for the current and comparative year-to-date periods, with subtotals for each interim period. This final rule was effective on November 5, 2018. As permitted by the SEC, the Company will apply the disclosure change in stockholders’ equity analysis commencing with its Form 10-Q for the fiscal quarter ending April 30, 2019. |
Net income per share
Net income per share | 9 Months Ended |
Oct. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net income per share | Net income per share The following table sets forth the computation of basic and diluted net income per share: (in thousands, except per share data) Three months ended October 31, Nine months ended October 31, 2018 2017 2018 2017 Numerator (basic and diluted): Net income $ 15,686 $ 10,482 $ 60,780 $ 41,457 Denominator (basic): Weighted-average common shares outstanding 62,088 60,562 61,718 60,160 Denominator (diluted): Weighted-average common shares outstanding 62,088 60,562 61,718 60,160 Weighted-average dilutive effect of stock options and restricted stock units 1,835 1,306 1,910 1,543 Diluted weighted-average common shares outstanding 63,923 61,868 63,628 61,703 Net income per share: Basic $ 0.25 $ 0.17 $ 0.98 $ 0.69 Diluted $ 0.25 $ 0.17 $ 0.96 $ 0.67 For the three months ended October 31, 2018 and 2017 , approximately 36,000 and 0.8 million shares, respectively, attributable to stock options and restricted stock units were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive. For the nine months ended October 31, 2018 and 2017 , approximately 0.1 million and 0.7 million shares, respectively, attributable to stock options and restricted stock units were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive. |
Cash, cash equivalents and mark
Cash, cash equivalents and marketable securities | 9 Months Ended |
Oct. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, cash equivalents and marketable securities | Cash, cash equivalents and marketable securities Cash, cash equivalents and marketable securities as of October 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 289,007 $ — $ — $ 289,007 Marketable securities: Mutual funds 41,727 335 (812 ) 41,250 Total cash, cash equivalents and marketable securities $ 330,734 $ 335 $ (812 ) $ 330,257 Cash, cash equivalents and marketable securities as of January 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 199,472 $ — $ — $ 199,472 Marketable securities: Mutual funds 41,153 270 (626 ) 40,797 Total cash, cash equivalents and marketable securities $ 240,625 $ 270 $ (626 ) $ 240,269 The following table summarizes the cost basis and fair value of the marketable securities by contractual maturity as of October 31, 2018 : (in thousands) Cost basis Fair value One year or less $ 26,021 $ 25,895 Over one year and less than five years 15,706 15,355 Total $ 41,727 $ 41,250 Unrealized losses from marketable securities are primarily attributable to change in interest rates. The Company does not believe any remaining unrealized losses represent other-than-temporary impairments based on the Company's evaluation of available evidence as of October 31, 2018 . Unrealized loss recognized during the three and nine months ended October 31, 2018 for marketable securities held as of October 31, 2018 was $0.1 million . |
Property and equipment
Property and equipment | 9 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment consisted of the following as of October 31, 2018 and January 31, 2018 : (in thousands) October 31, 2018 January 31, 2018 Leasehold improvements $ 3,775 $ 2,292 Furniture and fixtures 5,075 4,785 Computer equipment 9,291 8,174 Property and equipment, gross 18,141 15,251 Accumulated depreciation (9,398 ) (7,415 ) Property and equipment, net $ 8,743 $ 7,836 Depreciation expense for the three months ended October 31, 2018 and 2017 was $0.9 million and $0.7 million , respectively, and $2.6 million and $2.0 million for the nine months ended October 31, 2018 and 2017 , respectively. |
Intangible assets and goodwill
Intangible assets and goodwill | 9 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets and goodwill | Intangible assets and goodwill During the three months ended October 31, 2018 and 2017 , the Company capitalized software development costs of $2.2 million and $2.1 million , respectively, and $6.4 million and $6.3 million for the nine months ended October 31, 2018 and 2017 , respectively, related to significant enhancements and upgrades to its proprietary system. The gross carrying amount and associated accumulated amortization of intangible assets were as follows as of October 31, 2018 and January 31, 2018 : (in thousands) October 31, 2018 January 31, 2018 Amortized intangible assets: Capitalized software development costs $ 37,995 $ 31,993 Software 4,440 8,863 Other intangible assets 2,882 2,882 Acquired intangible member assets 85,110 83,915 Intangible assets, gross 130,427 127,653 Accumulated amortization (49,697 ) (44,018 ) Intangible assets, net $ 80,730 $ 83,635 During the three months ended October 31, 2018 and 2017 , the Company expensed a total of $3.4 million and $3.0 million , respectively, and $10.0 million and $8.9 million for the nine months ended October 31, 2018 and 2017 , respectively, in software development costs primarily related to the post-implementation and operation stages of its proprietary software. Amortization expense for the three months ended October 31, 2018 and 2017 was $3.7 million and $3.3 million , respectively, and $10.9 million and $9.2 million for the nine months ended October 31, 2018 and 2017 , respectively. During the three months ended October 31, 2018, the Company incurred a loss on disposal of approximately $0.7 million of previously capitalized software development costs. There were no changes to the goodwill carrying value during the three and nine months ended October 31, 2018 and 2017 . |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies The Company’s principal commitments and contingencies consist of a processing services agreement with a vendor, and obligations for office space, telephony services, data storage facilities, equipment and certain maintenance agreements under long-term, non-cancelable operating leases. These commitments as of January 31, 2018 are disclosed in the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended January 31, 2018 , and did not change materially during the three and nine months ended October 31, 2018 , except for the following: On September 27, 2018, the Company entered into an amendment to its lease agreements, dated May 15, 2015, to expand its current office space in Draper, Utah, commencing February 1, 2020 and extend the term of its current lease. The leases will expire on November 30, 2030. The Company will be responsible for payment of taxes and operating expenses, in addition to rent increases of approximately $35.5 million over the lease term. Future minimum lease payments required under non-cancelable obligations as of October 31, 2018 are as follows: Year ending January 31, (in thousands) Office lease Other agreements Total 2019 $ 957 $ 1,114 $ 2,071 2020 3,689 3,113 6,802 2021 3,933 3,095 7,028 2022 5,589 1,803 7,392 2023 5,728 40 5,768 Thereafter 50,124 11 50,135 Total $ 70,020 $ 9,176 $ 79,196 Lease expense for office space for the three months ended October 31, 2018 and 2017 was $1.4 million and $1.0 million , respectively, and $4.0 million and $3.1 million for the nine months ended October 31, 2018 and 2017 , respectively. Expense for other lease agreements for the three months ended October 31, 2018 and 2017 was $0.1 million , and $0.4 million and $0.3 million for the nine months ended October 31, 2018 and 2017 , respectively. |
Indebtedness
Indebtedness | 9 Months Ended |
Oct. 31, 2018 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness On September 30, 2015, the Company entered into a new credit facility (the "Credit Agreement") that provides for a secured revolving credit facility in the aggregate principal amount of $100.0 million for a term of five years . The proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. No amounts have been drawn under the Credit Agreement as of October 31, 2018 . Borrowings under the Credit Agreement bear interest equal to, at the Company's option, a) an adjusted LIBOR rate or b) a customary base rate, in each case with an applicable spread to be determined based on the Company's leverage ratio as of the most recent fiscal quarter. The applicable spread for borrowing under the Credit Agreement ranges from 1.50% to 2.00% with respect to adjusted LIBOR rate borrowings and 0.50% to 1.00% with respect to customary base rate borrowings. Additionally, the Company pays a commitment fee ranging from 0.20% to 0.30% on the daily amount of the unused commitments under the Credit Agreement payable in arrears at the end of each fiscal quarter. The Company's material subsidiaries are required to guarantee the obligations of the Company under the Credit Agreement. The obligations of the Company and the guarantors under the Credit Agreement and the guarantees are secured by substantially all assets of the Company and the guarantors, subject to customary exclusions and exceptions. The Credit Agreement requires the Company to maintain a total leverage ratio of not more than 3.00 to 1.00 as of the end of each fiscal quarter and a minimum interest coverage ratio of at least 3.00 to 1.00 as of the end of each fiscal quarter. In addition, the Credit Agreement includes customary representations and warranties, affirmative and negative covenants, and events of default. The restrictive covenants include customary restrictions on the Company's ability to incur additional indebtedness; make investments, loans or advances; grant or incur liens on assets; engage in mergers, consolidations, liquidations or dissolutions; engage in transactions with affiliates; and make dividend payments. The Company was in compliance with these covenants as of October 31, 2018 . |
Income taxes
Income taxes | 9 Months Ended |
Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The Company follows FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting , for the computation and presentation of its interim period tax provision. Accordingly, management estimated the effective annual tax rate and applied this rate to the year-to-date pre-tax book income to determine the interim provision for income taxes. For the three and nine months ended October 31, 2018 , the Company recorded an income tax expense of $1.7 million and an income tax benefit of $1.3 million , respectively. This resulted in an effective income tax expense rate of 10.0% and an effective income tax benefit rate of 2.2% for the three and nine months ended October 31, 2018 , respectively, compared with an effective income tax expense rate of 20.4% and 8.8% for the three and nine months ended October 31, 2017 , respectively. For the three and nine months ended October 31, 2018 and 2017, the net impact of discrete tax items caused an 11.9 and 24.1 percentage point decrease and a 15.7 and 27.3 percentage point decrease, respectively, to the effective income tax rate primarily due to the excess tax benefit on stock-based compensation expense recognized in the provision for income taxes in the condensed consolidated statements of operations and comprehensive income. The decrease in the effective income tax rate from the same periods last year is primarily due to the reduction in the US federal corporate income tax rate from 35% to 21% as a result of legislative changes effective January 1, 2018 and an increase in federal and state research and development tax credits over prior periods. The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the federal corporate income tax rate from 35% to 21% , among other provisions. In accordance with ASU 2018-05 and Staff Accounting Bulletin No. 118 (“SAB 118”), registrants were able to record provisional amounts during a one-year “measurement period” from the enactment date of the Tax Cuts and Jobs Act. The measurement period is deemed to have ended earlier when the registrant has obtained, prepared, and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Cuts and Jobs Act. The Company remeasured certain deferred tax assets and liabilities as of December 31, 2017 based on rates at which they are expected to reverse in the future, which is generally the new corporate income tax rate of 21% as enacted by the Tax Cuts and Jobs Act. However, the Company's analysis is incomplete as it is still analyzing certain aspects of the Act and refining its calculations, including state conformity and the impact of state tax rates on deferred tax balances, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Based on the best information available, the provisional amount recorded related to the remeasurement of the Company's deferred tax balances resulted in a decrease in net deferred tax assets of $0.5 million during the year ended January 31, 2018 . As of October 31, 2018 , the Company has not made any additional measurement period adjustments to the provisional amount recorded as of January 31, 2018 . The Company will continue to make and refine its calculations as additional analysis is completed. In addition, the Company's estimates may also be affected as it gains a more thorough understanding of the enacted tax law changes and as additional future guidance on the effects of the Tax Cuts and Jobs Act is made available. The Company expects to complete its accounting within the prescribed measurement period. Other significant provisions of the Tax Cuts and Jobs Act were effective as of January 1, 2018, including, but not limited to: the limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income, changes in the deductibility of certain meals and entertainment business expenses, and changes in the deductibility of certain excessive employee remuneration. The Company has applied these provisions to its current income tax provision as it relates to its tax return period beginning January 1, 2018 using reasonable interpretations and available guidance. Further guidance or technical corrections may affect the Company's estimates and the application of these provisions on its income tax provision. As of October 31, 2018 and January 31, 2018 , the Company’s total gross unrecognized tax benefit was $1.5 million and $0.9 million , respectively. Certain unrecognized tax benefits have been netted against their related deferred tax assets; therefore, no unrecognized tax benefit has been recorded as of October 31, 2018 and January 31, 2018 . If recognized, $1.4 million of the total gross unrecognized tax benefits would affect the Company's effective tax rate as of October 31, 2018 . The Company files income tax returns with U.S. federal and state taxing jurisdictions and is not currently under examination with any jurisdiction. The Company remains subject to examination by federal and various state taxing jurisdictions for tax years after 2003. |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Oct. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | Stock-based compensation The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income during the periods presented: Three months ended October 31, Nine months ended October 31, (in thousands) 2018 2017 2018 2017 Cost of revenue $ 788 $ 720 $ 2,008 $ 1,903 Sales and marketing 990 561 2,586 1,403 Technology and development 1,386 831 3,677 2,365 General and administrative 2,570 1,553 7,190 4,797 Total stock-based compensation expense $ 5,734 $ 3,665 $ 15,461 $ 10,468 The following table shows stock-based compensation by award type: Three months ended October 31, Nine months ended October 31, (in thousands) 2018 2017 2018 2017 Stock options $ 1,917 $ 1,947 $ 5,664 $ 5,846 Performance stock options 178 346 503 1,032 Restricted stock units 1,956 835 5,543 2,245 Performance restricted stock units 793 537 1,843 1,345 Restricted stock awards 172 — 399 — Performance restricted stock awards 718 — 1,509 — Total stock-based compensation expense $ 5,734 $ 3,665 $ 15,461 $ 10,468 Stock options The Company currently grants stock options under the 2014 Equity Incentive Plan (as amended and restated, the "Incentive Plan"), which provided for the issuance of stock options to the directors and team members of the Company to purchase up to an aggregate of 2.6 million shares of common stock. In addition, under the Incentive Plan, the number of shares of common stock reserved for issuance under the Incentive Plan automatically increases on February 1 of each year, beginning as of February 1, 2015 and continuing through and including February 1, 2024, by 3% of the total number of shares of the Company’s capital stock outstanding on January 31 of the preceding fiscal year, or a lesser number of shares determined by the board of directors. Under the terms of the Incentive Plan, the Company has the ability to grant incentive and nonqualified stock options. Incentive stock options may be granted only to Company team members. Nonqualified stock options may be granted to Company team members, directors and consultants. Such options are to be exercisable at prices, as determined by the board of directors, which must be equal to no less than the fair value of the Company's common stock at the date of the grant. Stock options granted under the Incentive Plan generally expire 10 years from the date of issuance, or are forfeited 90 days after termination of employment. Shares of common stock underlying stock options that are forfeited or that expire are returned to the Incentive Plan. Valuation assumptions. The Company has adopted the provisions of Topic 718, which requires the measurement and recognition of compensation for all stock-based awards made to team members and directors, based on estimated fair values. Under Topic 718, the Company uses the Black-Scholes option pricing model as the method of valuation for stock options. The determination of the fair value of stock-based awards on the date of grant is affected by the fair value of the stock as well as assumptions regarding a number of complex and subjective variables. The variables include, but are not limited to, 1) the expected life of the option, 2) the expected volatility of the fair value of the Company's common stock over the term of the award estimated by averaging the Company's historical volatility in addition to published volatilities of a relative peer group, 3) risk-free interest rate, and 4) expected dividends. The key input assumptions that were utilized in the valuation of the stock options granted during the periods presented: Three months ended October 31, Nine months ended October 31, 2018 2017 2018 2017 Expected dividend yield — % — % — % — % Expected stock price volatility 37.09 % 37.79 % 37.09% - 37.84% 37.79% - 38.01% Risk-free interest rate 2.79 % 1.18 % 2.52% - 2.79% 1.18% - 2.07% Expected life of options 6.25 years 4.50 years 5.17 - 6.25 years 4.50 - 6.25 years The determination of the fair value of stock options on the date of grant using the Black-Scholes option pricing model is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. Expected volatility is determined using weighted average volatility of publicly traded peer companies. During the three and nine months ended October 31, 2018 , the Company began using its own historical volatility in addition to the volatility of publicly traded peer companies, as its share price history grows over time. The risk-free interest rate is determined by using published zero coupon rates on treasury notes for each grant date given the expected term on the options. The dividend yield of zero is based on the fact that the Company expects to invest cash in operations. The Company uses the "simplified" method to estimate expected term as determined under Staff Accounting Bulletin No. 110 due to the limited option exercise history as a public company. A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2018 3,699 $0.10 - 51.44 $ 22.83 7.26 $ 102,796 Granted 115 $50.41 - 82.39 $ 65.05 Exercised (1,222 ) $0.10 - 44.53 $ 17.48 Forfeited (116 ) $14.00 - 44.53 $ 30.48 Outstanding as of October 31, 2018 2,476 $0.10 - 82.39 $ 27.08 6.96 $ 160,195 Vested and expected to vest as of October 31, 2018 2,476 $ 27.08 6.96 $ 160,195 Exercisable as of October 31, 2018 806 $ 21.81 6.45 $ 56,427 The aggregate intrinsic value in the table above represents the difference between the estimated fair value of common stock and the exercise price of outstanding, in-the-money stock options. As of October 31, 2018 , the weighted-average vesting period of non-vested awards expected to vest is approximately 1.3 years ; the amount of compensation expense the Company expects to recognize for stock options vesting in future periods is approximately $13.1 million . Performance options. The Company recorded compensation expense related to the performance-based options based on the Company's probability assessment of attaining its Adjusted EBITDA targets, and Adjusted EBITDA per common share growth rates. Restricted stock units and restricted stock awards The Company grants restricted stock units ("RSUs") and restricted stock awards ("RSAs") to certain team members, officers, and directors under the Incentive Plan. RSUs and RSAs vest upon service-based criteria and performance-based criteria. Generally, service-based RSUs and RSAs vest over a four -year period in equal annual installments commencing upon the first anniversary of the grant date. RSUs and RSAs are valued based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate. Performance restricted stock units. In March 2017, the Company awarded 146,964 performance-based RSUs ("PRSUs"). Vesting of the PRSUs is dependent upon the achievement of certain financial criteria and cliff vest on January 31, 2020. The Company records stock-based compensation related to PRSUs when it is considered probable that the performance conditions will be met. Issuance of the underlying shares occurs at vesting. The Company believes it is probable that the PRSUs will vest at least in part. The vesting of PRSUs will ultimately range from 0% to 150% of the number of shares underlying the PRSU grant based on the level of achievement of the performance goals. Performance restricted stock awards. In March 2018, the Company awarded 227,760 performance-based RSAs ("PRSAs"). Vesting of the PRSAs is dependent upon the achievement of certain financial criteria and cliff vest on January 31, 2021. The Company records stock-based compensation related to PRSAs when it is considered probable that the performance conditions will be met. Issuance of the underlying shares occurs at the grant date. The Company believes it is probable that the PRSAs will vest at least in part. The vesting of PRSAs will ultimately range from 0% to 200% based on the level of achievement of the performance goals. The PRSAs were issued at the 200% level of achievement subject to clawback based on actual Company performance. A summary of the RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2018 451 $ 44.10 — $ — Granted 285 66.67 275 61.92 Vested (76 ) 45.46 — — Forfeited (27 ) 46.39 (19 ) 61.72 Outstanding as of October 31, 2018 633 $ 54.00 256 $ 61.93 Total unrecorded stock-based compensation expense as of October 31, 2018 associated with RSUs and PRSUs was $26.4 million , which is expected to be recognized over a weighted-average period of 2.7 years . Total unrecorded stock-based compensation expense as of October 31, 2018 associated with RSAs and PRSAs was $8.0 million , which is expected to be recognized over a weighted-average period of 2.6 years . |
Fair value
Fair value | 9 Months Ended |
Oct. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value | Fair Value Fair value measurements are made at a specific point in time, based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—quoted prices in active markets for identical assets or liabilities; • Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3—unobservable inputs based on the Company’s own assumptions. Level 1 instruments are valued based on publicly available daily net asset values. Level 1 instruments consist primarily of highly liquid mutual funds. The following tables summarize the assets measured at fair value on a recurring basis and indicates the level within the fair value hierarchy reflecting the valuation techniques utilized to determine fair value: October 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 41,250 $ — $ — January 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 40,797 $ — $ — The Company has classified cash and cash equivalents as Level 1 and certain non-trade receivables as Level 2 in the fair value hierarchy. |
Summary of business and signi_2
Summary of business and significant accounting policies (Policies) | 9 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of HealthEquity, Inc. and its wholly owned subsidiaries, HealthEquity Trust Company, HEQ Insurance Services, Inc., HealthEquity Advisors, LLC and HealthEquity Retirement Services, LLC (collectively referred to as the "Company"). The Company has a 22% ownership interest in a limited partnership for investment in and the management of early stage companies in the healthcare industry; this partnership interest is accounted for using the equity method of accounting. The investment was approximately $0.2 million as of October 31, 2018 and is included in other assets on the accompanying condensed consolidated balance sheet. The Company has a 1% ownership interest in a limited partnership that engages in the development of technology-based financial healthcare products. The Company elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting to account for the investment. The investment was $0.5 million as of October 31, 2018 and is included in other assets on the accompanying condensed consolidated balance sheet. Acquisitions of businesses are accounted for as business combinations, and accordingly, the results of operations of acquired businesses are included in the consolidated financial statements from the date of acquisition. All significant intercompany balances and transactions have been eliminated. |
Basis of presentation | Basis of presentation The accompanying condensed consolidated financial statements as of October 31, 2018 and for the three and nine months ended October 31, 2018 and 2017 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended January 31, 2018 . The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. |
Recent accounting pronouncements | Recent adopted accounting pronouncements Adoption of ASC 606 In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606") , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU and related subsequent amendments replaces most existing revenue recognition guidance in GAAP. The standard permits the use of either the retrospective or cumulative effect transition method (modified retrospective method). The Company adopted ASC 606 on February 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The Company recorded the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period. The adoption of the preceding standard did not have a material impact on the Company's revenue for the three and nine months ended October 31, 2018. Effective February 1, 2018, the Company capitalizes incremental contract acquisition costs, such as sales commissions, previously included in sales and marketing expenses in the condensed consolidated statement of operations, and amortizes these costs over the average economic life of an HSA Member. The Company's prior practice was to fully expense sales commissions when the HSA Member was added to the Company's platform. The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,008 $ 98,308 The impact of adoption on the Company's condensed consolidated statement of operations for the three and nine months ended October 31, 2018 is as follows: Three months ended October 31, 2018 Nine months ended October 31, 2018 (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 7,502 $ 7,658 $ (156 ) $ 21,605 $ 22,147 $ (542 ) Income from operations 18,986 18,830 156 61,089 60,547 542 Income tax provision (benefit) 1,745 1,675 70 (1,322 ) (1,530 ) 208 Net income $ 15,686 $ 15,600 $ 86 $ 60,780 $ 60,446 $ 334 The impact of adoption on the Company's condensed consolidated balance sheet as of October 31, 2018 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 8,953 $ 7,552 $ 1,401 Deferred tax asset 1,435 5,111 (3,676 ) Other assets 18,300 2,022 16,278 Deferred tax liability 661 — 661 Accumulated earnings $ 158,731 $ 145,389 $ 13,342 Disaggregation of revenue. The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the condensed consolidated statements of operations. All of the Company's sources of revenue are deemed to be revenue contracts with customers. Each revenue source is affected differently by economic factors as it relates to the nature, amount, timing and uncertainty. Costs to obtain or fulfill a contract. ASC 606 requires capitalizing the costs of obtaining a contract when those costs are incremental and expected to be recovered. Since incremental commissions paid to sales team members as a result of obtaining contracts are recoverable, the Company recorded a $17.2 million cumulative catch-up capitalized asset on February 1, 2018. As of October 31, 2018, the net amount capitalized as contract costs was $17.6 million , which is included in other current assets and other assets. In order to determine the amortization period for sales commissions contract costs, the Company applied the portfolio approach. Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA Member and 401(k) customer relationship, which is estimated to be 15 years and 10 years, respectively. Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the condensed consolidated statement of operations. Performance obligations. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Amounts excluded are not significant to the Company's condensed consolidated statements of operations. Service revenue. The Company hosts its platform, prepares statements, provides a mechanism for spending funds, and provides customer support services. All of these services are consumed as they are received. The Company will continue to recognize service revenue on a monthly basis as it transfers control and satisfies its performance obligations. Custodial revenue. The Company deposits custodial cash and investment assets at federally-insured custodial depository partners and with an investment partner. The deposit of funds represents a service that is simultaneously received and consumed by the custodial depository bank partners and investment partner. The Company will continue to recognize custodial revenue each month based on the amount received by its custodial bank partners and investment partners. Interchange revenue. The Company satisfies its interchange performance obligation each time payments are made with our cards via payment networks. The Company will continue to recognize interchange revenue in the month the payment transaction occurs. Contract balances. The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. The Company's deferred revenue as of October 31, 2018 and January 31, 2018 was $0.4 million and $0.5 million , respectively. The balances related to cash received in advance for a certain interchange revenue arrangement. The Company expects to satisfy its remaining obligations for this arrangement. Significant judgments. The Company makes no significant judgments in determining the amount or timing of revenue recognition. The Company has estimated the average economic life of an HSA Member and a 401(k) customer relationship to be 15 years and 10 years, respectively, and which has been determined to be the amortization period for the capitalized sales commissions contract costs. Practical expedients. The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level. The Company has also applied the practical expedient to recognized incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. Adoption of ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities . In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which clarifies certain aspects of the guidance issued in ASU 2016-01. The amendments in these updates revise an entity's accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The Company adopted these ASUs on February 1, 2018 using the modified retrospective method. The Company recorded the cumulative effect as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period.The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 due to the adoption of ASU 2016-01 were as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Deferred tax asset $ 5,461 $ (87 ) $ 5,374 Accumulated other comprehensive loss $ (269 ) $ 269 $ — Accumulated earnings $ 85,300 $ (356 ) $ 84,944 This ASU also eliminated the cost method of accounting for investments in equity securities that do not have readily determinable fair values and permits the election of a measurement alternative that allows such securities to be recorded at cost, less impairment, if any, plus or minus changes resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer. The Company adopted this provision on a prospective basis as it relates to its 1% ownership interest in a limited partnership and elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting. Gains and losses resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer or impairment will be recorded through net income in the period incurred. The impact of the adoption on the Company's condensed consolidated financial statements as of and for the three and nine months ended October 31, 2018 was not significant. Adoption of ASU 2018-02 In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which gives companies the option to reclassify between accumulated other comprehensive income ("AOCI") and retained earnings the income tax rate differential that has become stranded in AOCI as a result of the enactment of the Tax Cuts and Jobs Act and the revaluation of certain deferred tax assets and liabilities at the new federal income tax rate of 21%. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2018. As a result of adopting this standard, the reclassification of the income tax effects of this tax reform during the year ended January 31, 2018 resulted in an increase to retained earnings and a decrease to AOCI in the amount of $45,000 related to the decrease in the federal corporate income tax rate. The Company's policy is to use the portfolio approach in releasing income tax effects from AOCI. Adoption of ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory , which updates the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Adoption of ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), which provides guidance on the classification of certain cash receipts and cash payments. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Adoption of ASU 2017-09 In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about changes to the terms or conditions of a share-based payment award. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the nine months ended October 31, 2018, and prospectively applies this standard to awards modified on or after the adoption date. There was no impact on the Company's condensed consolidated financial statements as a result of the adoption. Recent issued accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (codified as "ASC 842"), which sets out the principles for the recognition, measurement, presentation and disclosure for both parties to a contract (i.e., lessees and lessors). ASC 842 supersedes the previous leases standard, ASC 840 leases. ASC 842 is effective for financial statements issued for reporting periods beginning after December 15, 2018 and requires a modified retrospective transition, and provides for certain practical expedients; early adoption is permitted. In July 2018, the FASB issued ASU 2018-11- Leases ("Topic 842") – Targeted Improvements, which provides an additional transition method to adopt the new lease standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. The Company will adopt ASC 842 effective February 1, 2019, using the alternative transition method under Topic 842. Although the Company is in the process of evaluating the impact of adoption of ASC 842 on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company’s balance sheet for facility operating lease agreements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost be presented at the net amount expected to be collected. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company does not plan to early adopt this ASU. The Company believes the adoption of this ASU will have an immaterial impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes step two from the goodwill impairment test. As a result, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units' fair value. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption; however, it does not believe this ASU will have a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, "Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. As this relates to disclosure only, the Company believes the adoption of this ASU will have an immaterial impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU allows the capitalization of implementation costs incurred in a hosting arrangement. This ASU is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the potential effect of this ASU on the consolidated financial statements. In August 2018, the SEC adopted a final rule under SEC Release No. 33-10532, Disclosure Update and Simplification , that amends certain disclosure requirements that were duplicative, overlapping, outdated or superseded. The amendments also expanded the disclosure requirements relating to stockholders' equity for interim financial statements, to require changes in stockholders’ equity, in the form of reconciliation, for the current and comparative year-to-date periods, with subtotals for each interim period. This final rule was effective on November 5, 2018. As permitted by the SEC, the Company will apply the disclosure change in stockholders’ equity analysis commencing with its Form 10-Q for the fiscal quarter ending April 30, 2019. |
Revenue recognition | Disaggregation of revenue. The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the condensed consolidated statements of operations. All of the Company's sources of revenue are deemed to be revenue contracts with customers. Each revenue source is affected differently by economic factors as it relates to the nature, amount, timing and uncertainty. Costs to obtain or fulfill a contract. ASC 606 requires capitalizing the costs of obtaining a contract when those costs are incremental and expected to be recovered. Since incremental commissions paid to sales team members as a result of obtaining contracts are recoverable, the Company recorded a $17.2 million cumulative catch-up capitalized asset on February 1, 2018. As of October 31, 2018, the net amount capitalized as contract costs was $17.6 million , which is included in other current assets and other assets. In order to determine the amortization period for sales commissions contract costs, the Company applied the portfolio approach. Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA Member and 401(k) customer relationship, which is estimated to be 15 years and 10 years, respectively. Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the condensed consolidated statement of operations. Performance obligations. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Amounts excluded are not significant to the Company's condensed consolidated statements of operations. Service revenue. The Company hosts its platform, prepares statements, provides a mechanism for spending funds, and provides customer support services. All of these services are consumed as they are received. The Company will continue to recognize service revenue on a monthly basis as it transfers control and satisfies its performance obligations. Custodial revenue. The Company deposits custodial cash and investment assets at federally-insured custodial depository partners and with an investment partner. The deposit of funds represents a service that is simultaneously received and consumed by the custodial depository bank partners and investment partner. The Company will continue to recognize custodial revenue each month based on the amount received by its custodial bank partners and investment partners. Interchange revenue. The Company satisfies its interchange performance obligation each time payments are made with our cards via payment networks. The Company will continue to recognize interchange revenue in the month the payment transaction occurs. Contract balances. The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. The Company's deferred revenue as of October 31, 2018 and January 31, 2018 was $0.4 million and $0.5 million , respectively. The balances related to cash received in advance for a certain interchange revenue arrangement. The Company expects to satisfy its remaining obligations for this arrangement. Significant judgments. The Company makes no significant judgments in determining the amount or timing of revenue recognition. The Company has estimated the average economic life of an HSA Member and a 401(k) customer relationship to be 15 years and 10 years, respectively, and which has been determined to be the amortization period for the capitalized sales commissions contract costs. Practical expedients. The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level. The Company has also applied the practical expedient to recognized incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. |
Summary of business and signi_3
Summary of business and significant accounting policies (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cumulative effect of changes | The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,008 $ 98,308 The impact of adoption on the Company's condensed consolidated statement of operations for the three and nine months ended October 31, 2018 is as follows: Three months ended October 31, 2018 Nine months ended October 31, 2018 (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 7,502 $ 7,658 $ (156 ) $ 21,605 $ 22,147 $ (542 ) Income from operations 18,986 18,830 156 61,089 60,547 542 Income tax provision (benefit) 1,745 1,675 70 (1,322 ) (1,530 ) 208 Net income $ 15,686 $ 15,600 $ 86 $ 60,780 $ 60,446 $ 334 The impact of adoption on the Company's condensed consolidated balance sheet as of October 31, 2018 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 8,953 $ 7,552 $ 1,401 Deferred tax asset 1,435 5,111 (3,676 ) Other assets 18,300 2,022 16,278 Deferred tax liability 661 — 661 Accumulated earnings $ 158,731 $ 145,389 $ 13,342 The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of February 1, 2018 due to the adoption of ASU 2016-01 were as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Deferred tax asset $ 5,461 $ (87 ) $ 5,374 Accumulated other comprehensive loss $ (269 ) $ 269 $ — Accumulated earnings $ 85,300 $ (356 ) $ 84,944 |
Net income per share (Tables)
Net income per share (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted net income per share: (in thousands, except per share data) Three months ended October 31, Nine months ended October 31, 2018 2017 2018 2017 Numerator (basic and diluted): Net income $ 15,686 $ 10,482 $ 60,780 $ 41,457 Denominator (basic): Weighted-average common shares outstanding 62,088 60,562 61,718 60,160 Denominator (diluted): Weighted-average common shares outstanding 62,088 60,562 61,718 60,160 Weighted-average dilutive effect of stock options and restricted stock units 1,835 1,306 1,910 1,543 Diluted weighted-average common shares outstanding 63,923 61,868 63,628 61,703 Net income per share: Basic $ 0.25 $ 0.17 $ 0.98 $ 0.69 Diluted $ 0.25 $ 0.17 $ 0.96 $ 0.67 |
Cash, cash equivalents and ma_2
Cash, cash equivalents and marketable securities (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of marketable securities | Cash, cash equivalents and marketable securities as of October 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 289,007 $ — $ — $ 289,007 Marketable securities: Mutual funds 41,727 335 (812 ) 41,250 Total cash, cash equivalents and marketable securities $ 330,734 $ 335 $ (812 ) $ 330,257 Cash, cash equivalents and marketable securities as of January 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 199,472 $ — $ — $ 199,472 Marketable securities: Mutual funds 41,153 270 (626 ) 40,797 Total cash, cash equivalents and marketable securities $ 240,625 $ 270 $ (626 ) $ 240,269 |
Marketable securities classified by contractual maturity date | The following table summarizes the cost basis and fair value of the marketable securities by contractual maturity as of October 31, 2018 : (in thousands) Cost basis Fair value One year or less $ 26,021 $ 25,895 Over one year and less than five years 15,706 15,355 Total $ 41,727 $ 41,250 |
Property and equipment (Tables)
Property and equipment (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consisted of the following as of October 31, 2018 and January 31, 2018 : (in thousands) October 31, 2018 January 31, 2018 Leasehold improvements $ 3,775 $ 2,292 Furniture and fixtures 5,075 4,785 Computer equipment 9,291 8,174 Property and equipment, gross 18,141 15,251 Accumulated depreciation (9,398 ) (7,415 ) Property and equipment, net $ 8,743 $ 7,836 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | The gross carrying amount and associated accumulated amortization of intangible assets were as follows as of October 31, 2018 and January 31, 2018 : (in thousands) October 31, 2018 January 31, 2018 Amortized intangible assets: Capitalized software development costs $ 37,995 $ 31,993 Software 4,440 8,863 Other intangible assets 2,882 2,882 Acquired intangible member assets 85,110 83,915 Intangible assets, gross 130,427 127,653 Accumulated amortization (49,697 ) (44,018 ) Intangible assets, net $ 80,730 $ 83,635 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future minimum lease payments required under non-cancelable obligations as of October 31, 2018 are as follows: Year ending January 31, (in thousands) Office lease Other agreements Total 2019 $ 957 $ 1,114 $ 2,071 2020 3,689 3,113 6,802 2021 3,933 3,095 7,028 2022 5,589 1,803 7,392 2023 5,728 40 5,768 Thereafter 50,124 11 50,135 Total $ 70,020 $ 9,176 $ 79,196 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of share based compensation recognized | The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income during the periods presented: Three months ended October 31, Nine months ended October 31, (in thousands) 2018 2017 2018 2017 Cost of revenue $ 788 $ 720 $ 2,008 $ 1,903 Sales and marketing 990 561 2,586 1,403 Technology and development 1,386 831 3,677 2,365 General and administrative 2,570 1,553 7,190 4,797 Total stock-based compensation expense $ 5,734 $ 3,665 $ 15,461 $ 10,468 |
Summary of stock-based compensation expense | The following table shows stock-based compensation by award type: Three months ended October 31, Nine months ended October 31, (in thousands) 2018 2017 2018 2017 Stock options $ 1,917 $ 1,947 $ 5,664 $ 5,846 Performance stock options 178 346 503 1,032 Restricted stock units 1,956 835 5,543 2,245 Performance restricted stock units 793 537 1,843 1,345 Restricted stock awards 172 — 399 — Performance restricted stock awards 718 — 1,509 — Total stock-based compensation expense $ 5,734 $ 3,665 $ 15,461 $ 10,468 |
Summary of assumptions | The key input assumptions that were utilized in the valuation of the stock options granted during the periods presented: Three months ended October 31, Nine months ended October 31, 2018 2017 2018 2017 Expected dividend yield — % — % — % — % Expected stock price volatility 37.09 % 37.79 % 37.09% - 37.84% 37.79% - 38.01% Risk-free interest rate 2.79 % 1.18 % 2.52% - 2.79% 1.18% - 2.07% Expected life of options 6.25 years 4.50 years 5.17 - 6.25 years 4.50 - 6.25 years |
Summary of stock option activity | A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2018 3,699 $0.10 - 51.44 $ 22.83 7.26 $ 102,796 Granted 115 $50.41 - 82.39 $ 65.05 Exercised (1,222 ) $0.10 - 44.53 $ 17.48 Forfeited (116 ) $14.00 - 44.53 $ 30.48 Outstanding as of October 31, 2018 2,476 $0.10 - 82.39 $ 27.08 6.96 $ 160,195 Vested and expected to vest as of October 31, 2018 2,476 $ 27.08 6.96 $ 160,195 Exercisable as of October 31, 2018 806 $ 21.81 6.45 $ 56,427 |
Summary of restricted stock unit activity | A summary of the RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2018 451 $ 44.10 — $ — Granted 285 66.67 275 61.92 Vested (76 ) 45.46 — — Forfeited (27 ) 46.39 (19 ) 61.72 Outstanding as of October 31, 2018 633 $ 54.00 256 $ 61.93 |
Fair value (Tables)
Fair value (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets measured at fair value on a recurring basis | The following tables summarize the assets measured at fair value on a recurring basis and indicates the level within the fair value hierarchy reflecting the valuation techniques utilized to determine fair value: October 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 41,250 $ — $ — January 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 40,797 $ — $ — |
Summary of business and signi_4
Summary of business and significant accounting policies (Narrative) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Feb. 01, 2018 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Equity method investment, ownership percentage | 22.00% | ||
Equity method investments | $ 200 | ||
Cost method investment, ownership percentage | 1.00% | ||
Cost method investments | $ 500 | ||
Capitalized contract costs | 17,600 | ||
Deferred revenue | $ 400 | $ 500 | |
Effect of change higher (lower) | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract costs | $ 17,200 | ||
Accumulated earnings (deficit) | Accounting Standards Update 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | 45 | ||
Accumulated compre- hensive loss | Accounting Standards Update 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | $ (45) | ||
HSA Member | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract cost, amortization period | 15 years | ||
401(k) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract cost, amortization period | 10 years |
Summary of business and signi_5
Summary of business and significant accounting policies (Adoption of New Accounting Pronouncement - Balance Sheet Effects) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Feb. 01, 2018 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | $ 8,953 | $ 4,676 | $ 3,310 |
Deferred tax asset | 1,435 | 1,274 | 5,461 |
Other assets | 18,300 | 18,027 | 2,180 |
Deferred tax liability | 661 | 18 | 0 |
Accumulated earnings | 158,731 | 98,308 | 85,300 |
Accumulated other comprehensive loss | 0 | (269) | |
Without adoption of ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 7,552 | 3,310 | |
Deferred tax asset | 5,111 | 5,461 | |
Other assets | 2,022 | 2,180 | |
Deferred tax liability | 0 | 0 | |
Accumulated earnings | 145,389 | 85,300 | |
Accounting Standards Update 2014-09 | Adjustments | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 1,401 | 1,366 | |
Deferred tax asset | (3,676) | (4,187) | |
Other assets | 16,278 | 15,847 | |
Deferred tax liability | 661 | 18 | |
Accumulated earnings | $ 13,342 | 13,008 | |
Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | 5,461 | ||
Accumulated earnings | 85,300 | ||
Accumulated other comprehensive loss | $ (269) | ||
Adjustments | Accounting Standards Update 2018-03 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | (87) | ||
Accumulated earnings | (356) | ||
Accumulated other comprehensive loss | 269 | ||
Pro Forma | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | 5,374 | ||
Accumulated earnings | 84,944 | ||
Accumulated other comprehensive loss | $ 0 |
Summary of business and signi_6
Summary of business and significant accounting policies (Adoption of New Accounting Pronouncements - Statement of Operations Effects) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales and marketing | $ 7,502 | $ 5,892 | $ 21,605 | $ 15,707 |
Income from operations | 18,986 | 13,562 | 61,089 | 45,984 |
Income tax provision (benefit) | 1,745 | 2,685 | (1,322) | 4,004 |
Net income | 15,686 | $ 10,482 | 60,780 | $ 41,457 |
Without adoption of ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales and marketing | 7,658 | 22,147 | ||
Income from operations | 18,830 | 60,547 | ||
Income tax provision (benefit) | 1,675 | (1,530) | ||
Net income | 15,600 | 60,446 | ||
Accounting Standards Update 2014-09 | Effect of change higher (lower) | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales and marketing | (156) | (542) | ||
Income from operations | 156 | 542 | ||
Income tax provision (benefit) | 70 | 208 | ||
Net income | $ 86 | $ 334 |
Net income per share (Details)
Net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Numerator (basic and diluted): | ||||
Net income | $ 15,686 | $ 10,482 | $ 60,780 | $ 41,457 |
Denominator (basic): | ||||
Weighted-average common shares outstanding (in shares) | 62,088 | 60,562 | 61,718 | 60,160 |
Denominator (diluted): | ||||
Weighted-average common shares outstanding (in shares) | 62,088 | 60,562 | 61,718 | 60,160 |
Weighted-average dilutive effect of stock options and restricted stock units (in shares) | 1,835 | 1,306 | 1,910 | 1,543 |
Diluted weighted-average common shares outstanding (in shares) | 63,923 | 61,868 | 63,628 | 61,703 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.25 | $ 0.17 | $ 0.98 | $ 0.69 |
Diluted (in usd per share) | $ 0.25 | $ 0.17 | $ 0.96 | $ 0.67 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 36 | 800 | 100 | 700 |
Cash, cash equivalents and ma_3
Cash, cash equivalents and marketable securities (Amortized Cost to Fair Value) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jan. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, cost basis | $ 289,007 | $ 199,472 | $ 184,367 | $ 139,954 |
Cash and cash equivalents, fair value | 289,007 | 199,472 | ||
Marketable securities: | ||||
Total cash, cash equivalents and marketable securities, cost basis | 330,734 | 240,625 | ||
Total gross unrealized gains | 335 | 270 | ||
Total gross unrealized losses | (812) | (626) | ||
Total cash, cash equivalents and marketable securities | 330,257 | 240,269 | ||
Mutual funds | ||||
Marketable securities: | ||||
Cost basis | 41,727 | 41,153 | ||
Gross unrealized gains | 335 | 270 | ||
Gross unrealized losses | (812) | (626) | ||
Fair value | $ 41,250 | $ 40,797 |
Cash, cash equivalents and ma_4
Cash, cash equivalents and marketable securities (Contractual Maturity) (Details) $ in Thousands | Oct. 31, 2018USD ($) |
Cost basis | |
One year or less | $ 26,021 |
Over one year and less than five years | 15,706 |
Total | 41,727 |
Fair value | |
One year or less | 25,895 |
Over one year and less than five years | 15,355 |
Total | $ 41,250 |
Cash, cash equivalents and ma_5
Cash, cash equivalents and marketable securities (Unrealized Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Oct. 31, 2018 | Oct. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Unrealized loss on marketable securities | $ 0.1 | $ 0.1 |
Property and equipment (Schedul
Property and equipment (Schedule of property and equipment) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18,141 | $ 15,251 |
Accumulated depreciation | (9,398) | (7,415) |
Property and equipment, net | 8,743 | 7,836 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,775 | 2,292 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,075 | 4,785 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 9,291 | $ 8,174 |
Property and equipment (Narrati
Property and equipment (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.9 | $ 0.7 | $ 2.6 | $ 2 |
Intangible assets and goodwil_2
Intangible assets and goodwill (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Capitalized software development costs | $ 2,200,000 | $ 2,100,000 | $ 6,400,000 | $ 6,300,000 |
Software development costs incurred and expensed | 3,400,000 | 3,000,000 | 10,000,000 | 8,900,000 |
Amortization expense | 3,700,000 | 3,300,000 | 10,900,000 | 9,200,000 |
Loss on disposal of software development costs and other | 700,000 | 844,000 | 97,000 | |
Change in goodwill | $ 0 | $ 0 | $ 0 | $ 0 |
Intangible assets and goodwil_3
Intangible assets and goodwill (Schedule of finite-lived intangible assets) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 130,427 | $ 127,653 |
Accumulated amortization | (49,697) | (44,018) |
Intangible assets, net | 80,730 | 83,635 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 37,995 | 31,993 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 4,440 | 8,863 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,882 | 2,882 |
Acquired intangible member assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 85,110 | $ 83,915 |
Commitments and contingencies_2
Commitments and contingencies (Narrative) (Details) - USD ($) $ in Millions | Sep. 27, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||||
Increase in rent expense | $ 35.5 | ||||
Lease expense for office space | $ 1.4 | $ 1 | $ 4 | $ 3.1 | |
Expenses for other lease agreements | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.3 |
Commitments and contingencies_3
Commitments and contingencies (Future Minimum Rental) (Details) $ in Thousands | Jan. 31, 2018USD ($) |
Operating Leased Assets [Line Items] | |
2,019 | $ 2,071 |
2,020 | 6,802 |
2,021 | 7,028 |
2,022 | 7,392 |
2,023 | 5,768 |
Thereafter | 50,135 |
Total | 79,196 |
Office lease | |
Operating Leased Assets [Line Items] | |
2,019 | 957 |
2,020 | 3,689 |
2,021 | 3,933 |
2,022 | 5,589 |
2,023 | 5,728 |
Thereafter | 50,124 |
Total | 70,020 |
Other agreements | |
Operating Leased Assets [Line Items] | |
2,019 | 1,114 |
2,020 | 3,113 |
2,021 | 3,095 |
2,022 | 1,803 |
2,023 | 40 |
Thereafter | 11 |
Total | $ 9,176 |
Indebtedness (Details)
Indebtedness (Details) - Line of Credit - Secured Revolving Credit Facility | Sep. 30, 2015USD ($) | Oct. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||
Secured revolving credit facility, aggregate principal | $ 100,000,000 | |
Facility term | 5 years | |
Amounts drawn under Credit Agreement | $ 0 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.20% | |
Minimum interest coverage ratio | 3 | |
Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.30% | |
Maximum leverage ratio | 3 | |
London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Variable rate borrowing spread | 1.50% | |
London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt Instrument [Line Items] | ||
Variable rate borrowing spread | 2.00% | |
Customary Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Variable rate borrowing spread | 0.50% | |
Customary Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Variable rate borrowing spread | 1.00% |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Income tax provision (benefit) | $ 1,745 | $ 2,685 | $ (1,322) | $ 4,004 | |
Effective tax rate - (benefit) expense | (10.00%) | (20.40%) | 2.20% | (8.80%) | |
Decrease in effective tax rate, primarily due to research and development tax credits | 11.90% | 15.70% | 24.10% | 27.30% | |
Provisional income tax | $ 500 | ||||
Unrecognized tax benefits | $ 1,500 | $ 1,500 | $ 900 | ||
Unrecognized tax benefits that would impact the effective tax rate | $ 1,400 | $ 1,400 |
Stock-based compensation (Stock
Stock-based compensation (Stock-based compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 5,734 | $ 3,665 | $ 15,461 | $ 10,468 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 788 | 720 | 2,008 | 1,903 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 990 | 561 | 2,586 | 1,403 |
Technology and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,386 | 831 | 3,677 | 2,365 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,570 | $ 1,553 | $ 7,190 | $ 4,797 |
Stock-based compensation (Sto_2
Stock-based compensation (Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 5,734 | $ 3,665 | $ 15,461 | $ 10,468 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,917 | 1,947 | 5,664 | 5,846 |
Performance stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 178 | 346 | 503 | 1,032 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,956 | 835 | 5,543 | 2,245 |
Performance restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 793 | 537 | 1,843 | 1,345 |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 172 | 0 | 399 | 0 |
Performance restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 718 | $ 0 | $ 1,509 | $ 0 |
Stock-based compensation (Narra
Stock-based compensation (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Oct. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 2,600,000 | ||
Percentage of capital stock | 3.00% | ||
Unrecognized stock compensation expense to be recognized in future | $ 13.1 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
Forfeiture period | 90 days | ||
Weighted-average vesting period of non-vested awards expected to vest | 1 year 3 months | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average vesting period of non-vested awards expected to vest | 2 years 8 months | ||
Award vesting period | 4 years | ||
Performance units awards (in shares) | 285,000 | ||
Unrecognized stock-based compensation expense related to restricted stock units to be recognized in future | $ 26.4 | ||
Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance units awards (in shares) | 146,964 | ||
Performance Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance units awards (in shares) | 227,760 | ||
RSAs and PRSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average vesting period of non-vested awards expected to vest | 2 years 7 months | ||
Performance units awards (in shares) | 275,000 | ||
Unrecognized stock-based compensation expense related to restricted stock units to be recognized in future | $ 8 | ||
Minimum | Performance Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights percentage | 0.00% | ||
Maximum | Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights percentage | 150.00% | ||
Maximum | Performance Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights percentage | 200.00% |
Stock-based compensation (Assum
Stock-based compensation (Assumptions) (Details) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% |
Expected stock price volatility | 37.09% | 37.79% | ||
Expected stock price volatility, minimum | 37.09% | 37.79% | ||
Expected stock price volatility, maximum | 37.84% | 38.01% | ||
Risk-free interest rate | 2.79% | 1.18% | ||
Risk-free interest rate, minimum | 2.52% | 1.18% | ||
Risk-free interest rate, maximum | 2.79% | 2.07% | ||
Expected life of options | 6 years 3 months | 4 years 6 months | ||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of options | 5 years 2 months 2 days | 4 years 6 months | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of options | 6 years 3 months | 6 years 3 months |
Stock-based compensation (Sto_3
Stock-based compensation (Stock option activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2018 | Jan. 31, 2018 | |
Number of options (shares) | ||
Opening balance (shares) | 3,699 | |
Granted (shares) | 115 | |
Exercised (shares) | (1,222) | |
Forfeited (shares) | (116) | |
Ending balance (shares) | 2,476 | 3,699 |
Range of exercise prices (usd per share) | ||
Beginning balance, minimum (usd per share) | $ 0.10 | |
Beginning balance, maximum (usd per share) | 51.44 | |
Granted, minimum (usd per share) | 50.41 | |
Granted, maximum (usd per share) | 82.39 | |
Exercised, minimum (usd per share) | 0.10 | |
Exercised, maximum (usd per share) | 44.53 | |
Forfeited, minimum (usd per share) | 14 | |
Forfeited, maximum (usd per share) | 44.53 | |
Ending balance, minimum (usd per share) | 0.10 | $ 0.10 |
Ending balance, maximum (usd per share) | 82.39 | 51.44 |
Weighted- average exercise price (usd per share) | ||
Opening balance (usd per share) | 22.83 | |
Granted (usd per share) | 65.05 | |
Exercised (usd per share) | 17.48 | |
Forfeited (usd per share) | 30.48 | |
Ending balance (usd per share) | $ 27.08 | $ 22.83 |
Weighted- average contractual term (in years) | 6 years 11 months 14 days | 7 years 3 months 5 days |
Aggregate intrinsic value | $ 160,195 | $ 102,796 |
Vested and expected to vest as of year end (shares) | 2,476 | |
Vested and expected to vest as of year end, weighted average exercise price (usd per share) | $ 27.08 | |
Vested and expected to vest as of year end, weighted average contractual term (in years) | 6 years 11 months 14 days | |
Vested and expected to vest as of year end, aggregate intrinsic value (usd per share) | $ 160,195 | |
Exercisable as of year end (shares) | 806 | |
Exercisable as of year end, weighted-average exercise price (usd per share) | $ 21.81 | |
Exercisable as of year end, weighted-average contractual term (in years) | 6 years 5 months 12 days | |
Exercisable as of year end, aggregate intrinsic value | $ 56,427 |
Stock-based compensation (Restr
Stock-based compensation (Restricted stock unity activity) (Details) shares in Thousands | 9 Months Ended |
Oct. 31, 2018$ / sharesshares | |
Restricted stock units | |
Shares | |
Unvested, beginning balance (shares) | shares | 451 |
Granted (shares) | shares | 285 |
Vested (shares) | shares | (76) |
Forfeited (shares) | shares | (27) |
Unvested, ending balance (shares) | shares | 633 |
Weighted-average grant date fair value | |
Unvested, beginning balance (usd per share) | $ / shares | $ 44.10 |
Granted (usd per share) | $ / shares | 66.67 |
Vested (usd per share) | $ / shares | 45.46 |
Forfeited (usd per share) | $ / shares | 46.39 |
Unvested, ending balance (usd per share) | $ / shares | $ 54 |
Restricted stock awards | |
Shares | |
Unvested, beginning balance (shares) | shares | 0 |
Granted (shares) | shares | 275 |
Vested (shares) | shares | 0 |
Forfeited (shares) | shares | (19) |
Unvested, ending balance (shares) | shares | 256 |
Weighted-average grant date fair value | |
Unvested, beginning balance (usd per share) | $ / shares | $ 0 |
Granted (usd per share) | $ / shares | 61.92 |
Vested (usd per share) | $ / shares | 0 |
Forfeited (usd per share) | $ / shares | 61.72 |
Unvested, ending balance (usd per share) | $ / shares | $ 61.93 |
Fair value (Details)
Fair value (Details) - Recurring - Mutual funds - USD ($) $ in Thousands | Oct. 31, 2018 | Jan. 31, 2018 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities: | $ 41,250 | $ 40,797 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities: | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities: | $ 0 | $ 0 |