Document and Entity Information
Document and Entity Information | 3 Months Ended |
Oct. 31, 2015shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Oct. 31, 2015 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Entity Registrant Name | Guidewire Software, Inc. |
Entity Central Index Key | 1,528,396 |
Entity Filer Category | Large Accelerated Filer |
Current Fiscal Year End Date | --07-31 |
Entity Common Stock, Shares Outstanding | 71,491,693 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 192,731 | $ 212,362 |
Short-term investments | 343,800 | 359,273 |
Accounts receivable | 54,303 | 62,062 |
Deferred tax assets, current | 13,832 | 13,845 |
Prepaid expenses and other current assets | 14,416 | 14,102 |
Total current assets | 619,082 | 661,644 |
Long-term investments | 127,118 | 106,117 |
Property and equipment, net | 13,418 | 12,160 |
Intangible assets, net | 3,639 | 3,999 |
Deferred tax assets, noncurrent | 12,795 | 5,896 |
Goodwill | 9,205 | 9,205 |
Other assets | 1,675 | 926 |
TOTAL ASSETS | 786,932 | 799,947 |
CURRENT LIABILITIES: | ||
Accounts payable | 5,943 | 8,816 |
Accrued employee compensation | 17,318 | 37,235 |
Deferred revenues, current | 46,973 | 50,766 |
Other current liabilities | 6,477 | 7,592 |
Total current liabilities | 76,711 | 104,409 |
Deferred revenues, noncurrent | 2,658 | 1,800 |
Other liabilities | 3,951 | 4,350 |
Total liabilities | 83,320 | 110,559 |
STOCKHOLDERS’ EQUITY: | ||
Common stock | 7 | 7 |
Additional paid-in capital | 679,080 | 662,869 |
Accumulated other comprehensive loss | (6,700) | (6,343) |
Accumulated deficit | 31,225 | 32,855 |
Total stockholders’ equity | 703,612 | 689,388 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 786,932 | $ 799,947 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Revenues : | ||
License | $ 32,340 | $ 28,820 |
Maintenance | 14,013 | 12,520 |
Services | 35,927 | 38,394 |
Total revenues | 82,280 | 79,734 |
Cost of revenues: | ||
License | 1,164 | 1,082 |
Maintenance | 2,475 | 2,242 |
Services | 31,531 | 32,447 |
Total cost of revenues | 35,170 | 35,771 |
Gross profit : | ||
License | 31,176 | 27,738 |
Maintenance | 11,538 | 10,278 |
Services | 4,396 | 5,947 |
Total gross profit | 47,110 | 43,963 |
Operating expenses: | ||
Research and development | 25,672 | 20,310 |
Sales and marketing | 19,291 | 17,529 |
General and administrative | 11,110 | 9,762 |
Total operating expenses | 56,073 | 47,601 |
Income (loss) from operations | (8,963) | (3,638) |
Interest income, net | 696 | 512 |
Other income (expense), net | 217 | (483) |
Loss before income taxes | (8,050) | (3,609) |
Provision for (benefit from) income taxes | (6,420) | (612) |
Net income (loss) | $ (1,630) | $ (2,997) |
Earnings (loss) per share: | ||
Basic | $ (0.02) | $ (0.04) |
Diluted | $ (0.02) | $ (0.04) |
Shares used in computing earnings (loss) per share: | ||
Basic | 71,242,897 | 69,316,700 |
Diluted | 71,242,897 | 69,316,700 |
Condensed Consolidated Stateme4
Condensed Consolidated Statement of Comprehensive Income (Loss) Statement - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,630) | $ (2,997) |
Foreign currency translation adjustments | (287) | (1,269) |
Unrealized gains (losses) on available-for-sale securities, net of tax of $4 and $8 | (50) | 33 |
Reclassification adjustment for realized gains included in net loss | (20) | (3) |
Other comprehensive loss | (357) | (1,239) |
Comprehensive loss | $ (1,987) | $ (4,236) |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive Income (Loss) Parenthetical - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Tax provision on unrealized gains on available-for-sale securities | $ 4 | $ 8 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,630) | $ (2,997) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,791 | 1,773 |
Stock-based compensation | 15,147 | 11,988 |
Excess tax benefit from exercise of stock options and vesting of RSUs | (475) | 0 |
Deferred tax assets | (6,905) | (955) |
Amortization of premium on available-for-sale securities | 877 | 1,414 |
Loss on disposals of property and equipment | (18) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,638 | 9,493 |
Prepaid expenses and other assets | (1,071) | (814) |
Accounts payable | (2,542) | 87 |
Accrued employee compensation | (19,840) | (17,232) |
Other liabilities | (1,039) | 10 |
Deferred revenues | (2,859) | (8,315) |
Net cash used in operating activities | (10,890) | (5,548) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of available-for-sale securities | (195,336) | (113,730) |
Sales of available-for-sale securities | 188,867 | 102,539 |
Purchase of property and equipment | (3,016) | (1,249) |
Net cash used in investing activities | (9,485) | (12,440) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock upon exercise of stock options | 1,463 | 1,445 |
Taxes remitted on RSU awards vested | (874) | (8,570) |
Excess tax benefit from exercise of stock options and vesting of RSUs | 475 | 0 |
Net cash provided by (used in) financing activities | 1,064 | (7,125) |
Effect of foreign exchange rate changes on cash and cash equivalents | (320) | (1,478) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (19,631) | (26,591) |
CASH AND CASH EQUIVALENTS—Beginning of period | 212,362 | 148,101 |
CASH AND CASH EQUIVALENTS—End of period | 192,731 | 121,510 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 394 | 506 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Accruals for purchase of property and equipment | $ 177 | $ 703 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies and Estimates | 3 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Summary of Significant Accounting Policies and Estimates | The Company and Summary of Significant Accounting Policies and Estimates Business Guidewire Software, Inc., a Delaware corporation, was incorporated on September 20, 2001. Guidewire Software, Inc., together with its subsidiaries (the “Company”), provides a technology platform which consists of three key elements: core transaction processing, data management and analytics, and digital engagement. It supports core insurance operations, including underwriting and policy administration, claim management and billing. The Company’s customers include insurance carriers for property and casualty insurance. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and accompanying notes include the Company and its wholly-owned subsidiaries, and reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the interim periods presented. All inter-company balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and related notes, together with management’s discussion and analysis of financial condition and results of operations, presented in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s consolidated financial statements for the fiscal year ended July 31, 2015 included in the Company’s Annual Report on Form 10-K. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition, the useful lives of property and equipment and intangible assets, allowance for doubtful accounts, valuation allowance for deferred tax assets, stock-based compensation, annual bonus attainment, income tax uncertainties, valuation of goodwill and intangible assets, and contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. Cash equivalents consist of commercial paper and money market funds. Investments Management determines the appropriate classification of investments at the time of purchase based upon management’s intent with regard to such investments. All investments are held as available-for-sale investments. The Company classifies investments as short-term when they have remaining contractual maturities of one year or less from the balance sheet date, and as long-term when the investments have remaining contractual maturities of more than one year from the balance sheet date. All investments are recorded at fair value with unrealized holding gains and losses included in accumulated other comprehensive loss. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, investments and accounts receivable. The Company maintains its cash, cash equivalents and investments with high quality financial institutions. The Company is exposed to credit risk for cash held in financial institutions in the event of a default to the extent that such amounts recorded on the balance sheet are in excess of amounts that are insured by the Federal Deposit Insurance Corporation (“FDIC”). No customer accounted for 10% or more of the Company’s revenues for the three months ended October 31, 2015 or 2014 . Two customers individually accounted for 10% or more of the Company’s total accounts receivable as of October 31, 2015 and no customer accounted for 10% or more of the Company’s total accounts receivable as of July 31, 2015 . Revenue Recognition The Company enters into arrangements to deliver multiple products or services (multiple-elements). The Company applies software revenue recognition rules and allocates the total revenues among elements based on vendor-specific objective evidence (“VSOE”) of fair value of each element. The Company recognizes revenue on a net basis excluding taxes collected from customers and remitted to government authorities. Revenues are derived from three sources: (i) License fees, related to term (or time-based) licenses, perpetual software licenses, and other; (ii) Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if, available during the maintenance term; and (iii) Services fees, related to professional services related to implementation of our software, reimbursable travel and training. Revenues are recognized when all of the following criteria are met: • Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period. • Delivery or performance has occurred . The Company’s software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials. • Fees are fixed or determinable. The Company assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Term and perpetual license fees are not considered to be fixed or determinable until they become due. Fees from term licenses are generally invoiced in annual, or in certain cases quarterly, installments over the term of the agreement beginning on the effective date of the license. Perpetual license fees are generally due between 30 and 60 days from delivery of software, however in certain cases extended payment terms may be offered. • Collectability is probable. Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from 30 to 90 days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied. VSOE of fair value does not exist for the Company’s software licenses; therefore, the Company allocates revenues to software licenses using the residual method. Under the residual method, the amount recognized for license fees is the difference between the total fixed and determinable fees and the VSOE of fair value for the undelivered elements under the arrangement. The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for those elements when sold separately. VSOE of fair value for maintenance is established using the stated maintenance renewal rate in the customer’s contract. For term licenses with duration of one year or less, no VSOE of fair value for maintenance exists. VSOE of fair value for services is established if a substantial majority of historical stand-alone selling prices for a service fall within a reasonably narrow price range. If the undelivered elements are all service elements and VSOE of fair value does not exist for one or more service element, the total arrangement fee is recognized ratably over the longest service period starting at software delivery, assuming all the related services have been made available to the customer. In certain offerings sold as fixed fee arrangements, the Company recognizes services revenues on a proportional performance basis as performance obligations are completed by using the ratio of labor hours to date as an input measure compared to total estimated labor hours for the consulting services. In cases where professional services are deemed to be essential to the functionality of the software, the arrangement is accounted for using contract accounting until the essential services are complete. If reliable estimates of total project costs can be made, the Company applies the percentage-of-completion method whereby percentage toward completion is measured by using the ratio of service billings to date compared to total estimated service billings for the consulting services. Service billings approximate labor hours as an input measure since they are generally billed monthly on a time and material basis. The fees related to the maintenance are recognized over the period the maintenance is provided. The Company generally invoices fees for licenses and maintenance to its customers in annual or, in certain cases, quarterly installments payable in advance. Deferred revenues represent amounts, which are billed to or collected from customers for which one or more of the revenue recognition criteria have not been met. The deferred revenues balance does not represent the total contract value of annual or multi-year, non-cancellable arrangements. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement carrying amounts of existing assets and liabilities by using enacted tax rates in effect for the year in which the difference is expected to reverse. Deferred tax assets and liabilities are classified as either current or noncurrent based on the related asset or liability. Deferred tax assets related to excess tax benefits are recorded when utilized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded when it is more likely than not that some portion or all of such deferred tax assets will not be realized and is based on the positive and negative evidence about the future including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The effective tax rate in a given financial statement period may also be materially impacted by changes in the mix and level of income or losses, changes in the expected outcome of audits, or changes in the deferred tax valuation allowance. The Company records interest and penalties related to unrecognized tax benefits as income tax expense in its condensed consolidated statement of operations. Stock-Based Compensation The Company recognizes compensation expense related to its stock options and restricted stock units (“RSUs”) granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures. The awards are subject to time-based vesting, which generally occurs over a period of 4 years . Option awards expire 10 years from the grant date. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, of the Company’s stock options using the Black-Scholes option-pricing model. The Company recognizes the fair value of stock-based compensation for awards which contain only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes the compensation cost for awards which contain performance conditions based upon the probability of that performance condition being met, net of estimated forfeitures, using the graded method. Recent Accounting Pronouncement Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU 2015-17, Income Taxes (Subtopic 740-10) which provides guidance for balance sheet classification of deferred taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current on the balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods with earlier application permitted as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have not yet selected a transition method and continue to evaluate the impact that this guidance will have on our consolidated financial statements. Cloud Computing Arrangements that Include a Software Element In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for service contracts. ASU 2015-05 is effective for the Company in the first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all arrangements entered into or materially modified after the effective date and represent a change in accounting principle; or (ii) retrospectively. The Company has evaluated the impact of the adoption of ASU 2015-05 and concluded that the adoption will not have a material impact on its consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In July 2015, the FASB deferred the effective date to annual reporting periods and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The standard will be effective for the Company beginning August 1, 2018 and permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method and continue to evaluate the impact that this guidance will have on our consolidated financial statements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Oct. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Available-for-sale investments within cash equivalents and investments consist of the following: October 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) U.S. agency securities $ 104,668 $ 16 $ (8 ) $ 104,676 Commercial paper 120,295 11 (1 ) 120,305 Corporate bonds 265,127 91 (281 ) 264,937 U.S. government bonds 43,081 3 (28 ) 43,056 Foreign government bonds 8,630 5 — 8,635 Money market funds 100,704 — — 100,704 Total $ 642,505 $ 126 $ (318 ) $ 642,313 July 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) U.S. agency securities $ 82,946 $ 21 $ (4 ) $ 82,963 Commercial paper 142,822 13 (4 ) 142,831 Corporate bonds 281,942 47 (216 ) 281,773 U.S. government bonds 32,529 13 (2 ) 32,540 Foreign government bonds 8,663 7 (2 ) 8,668 Certificate of deposit 2,700 — — 2,700 Money market funds 88,319 — — 88,319 Total $ 639,921 $ 101 $ (228 ) $ 639,794 The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: October 31, 2015 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Commercial paper $ 56,926 $ (1 ) $ — $ — $ 56,926 $ (1 ) U.S. agency securities 35,508 (8 ) — — 35,508 (8 ) Corporate bonds 142,383 (280 ) 5,875 (1 ) 148,258 (281 ) U.S. government bonds 25,057 (28 ) — — 25,057 (28 ) Foreign government bonds 2,900 * — — 2,900 * Total $ 262,774 $ (317 ) $ 5,875 $ (1 ) $ 268,649 $ (318 ) * Amount less than one thousand dollars. As of October 31, 2015 , the Company had 96 investments in a gross unrealized loss position. The unrealized losses on its available-for-sale securities were primarily a result of changes in interest rates subsequent to the initial purchase of these securities. The Company does not intend to sell, nor believe it will need to sell, these securities before recovering the associated unrealized losses. The Company does not consider any portion of the unrealized losses at October 31, 2015 to be an other-than-temporary impairment, nor are any unrealized losses considered to be credit losses. The Company has recorded the securities at fair value in its condensed consolidated balance sheets, with unrealized gains and losses reported as a component of accumulated other comprehensive loss. The amounts of realized gains and losses reclassified into earnings are based on the specific identification of the securities sold. The realized gains and losses from sales of securities in the periods presented were not significant. The following table summarizes the contractual maturities of the Company’s available-for-sale securities as of October 31, 2015 : Less Than 12 Months 12 to 36 Months Total (in thousands) U.S. agency securities $ 78,848 $ 25,828 $ 104,676 Commercial paper 120,305 — 120,305 Corporate bonds 178,710 86,227 264,937 U.S. government bonds 27,993 15,063 43,056 Foreign government bonds 8,635 — 8,635 Money market funds 100,704 — 100,704 Total $ 515,195 $ 127,118 $ 642,313 Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows: Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2—Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and Level 3—Unobservable inputs that are supported by little or no market activity, which require the Company to develop its own assumptions. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of the Company’s accounts receivable, accounts payable and accrued liabilities approximates their fair value due to the short-term nature of these instruments. The Company bases the fair value of its Level 1 financial instruments, which are in active markets, using quoted market prices for identical instruments. The Company obtains the fair value of its Level 2 financial instruments, which are not in active markets, from a third-party professional pricing service using quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. The Company’s professional pricing service gathers observable inputs for all of its fixed income securities from a variety of industry data providers (e.g. large custodial institutions) and other third-party sources. Once the observable inputs are gathered, all data points are considered and an average price is determined. The Company validates the quoted market prices provided by its primary pricing service by comparing their assessment of the fair values of its Level 2 investment portfolio balance against the fair values of its Level 2 investment portfolio balance provided by its investment managers. The Company’s investment managers use similar techniques to its professional pricing service to derive pricing as described above. The Company did not have any Level 3 financial assets or liabilities as of October 31, 2015 or July 31, 2015 . The following tables summarize the Company’s financial assets measured at fair value on a recurring basis, by level within the fair value hierarchy as of October 31, 2015 and July 31, 2015 : October 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents: Commercial paper $ — $ 70,691 $ — $ 70,691 Money market funds 100,704 — — 100,704 Short-term investments: U.S. agency securities — 78,848 — 78,848 Commercial paper — 49,614 — 49,614 Corporate bonds — 178,710 — 178,710 U.S. government bonds — 27,993 — 27,993 Foreign government bonds — 8,635 — 8,635 Long-term investments: U.S. agency securities — 25,828 — 25,828 U.S. government bonds — 15,063 — 15,063 Corporate bonds — 86,227 — 86,227 Total assets $ 100,704 $ 541,609 $ — $ 642,313 July 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents: Commercial paper $ — $ 86,085 $ — $ 86,085 Money market funds 88,319 — — 88,319 Short-term investments: U.S. agency securities — 68,212 — 68,212 Commercial paper — 56,746 — 56,746 U. S. government bonds — 19,983 — 19,983 Foreign government bonds — 8,668 — 8,668 Corporate bonds — 202,964 — 202,964 Certificate of deposit — 2,700 — 2,700 Long-term investments: U.S. agency securities — 14,751 — 14,751 Corporate bonds — 78,809 — 78,809 U.S. government bonds — 12,557 — 12,557 Total assets $ 88,319 $ 551,475 $ — $ 639,794 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Oct. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Property and Equipment, Net Property and equipment consist of the following: October 31, 2015 July 31, 2015 (in thousands) Computer hardware $ 17,477 $ 15,099 Software 4,873 4,867 Furniture and fixtures 3,126 3,065 Leasehold improvements 8,089 8,040 Total property and equipment 33,565 31,071 Less accumulated depreciation (20,147 ) (18,911 ) Property and equipment, net $ 13,418 $ 12,160 As of October 31, 2015 and July 31, 2015 , no property and equipment was pledged as collateral against borrowings. Depreciation expense was $1.4 million and $1.4 million for the three months ended October 31, 2015 and 2014 , respectively. Intangible Assets Intangible assets consist of the following: October 31, 2015 July 31, 2015 Acquired technology: (in thousands) Cost $ 7,200 $ 7,200 Accumulated amortization (3,561 ) (3,201 ) Intangible assets, net $ 3,639 $ 3,999 Amortization expense was $0.4 million and $0.4 million for the three months ended October 31, 2015 and 2014 , respectively. Estimated aggregate amortization expense for each of the next three fiscal years is as follows: Future Amortization (in thousands) Fiscal year ending July 31, 2016 (remainder of fiscal year) 1,080 2017 1,440 2018 1,119 Total $ 3,639 Accrued Employee Compensation Accrued employee compensation consists of the following: October 31, 2015 July 31, 2015 (in thousands) Accrued bonuses $ 4,641 $ 19,819 Accrued commission 674 5,008 Accrued vacation 8,374 7,980 Accrued salaries, payroll taxes and benefits 3,629 4,428 Total $ 17,318 $ 37,235 Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component during the three months ended October 31, 2015 were as follows: Foreign Currency Items Unrealized gain (loss) on available-for-sale securities Total (in thousands) Balance as of July 31, 2015 $ (6,247 ) $ (96 ) $ (6,343 ) Other comprehensive gain (loss) before reclassification (287 ) (46 ) (333 ) Amounts reclassified from accumulated other comprehensive loss to earnings — (20 ) (20 ) Tax effect — (4 ) (4 ) Balance as of October 31, 2015 $ (6,534 ) $ (166 ) $ (6,700 ) |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Loss Per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the three months ended October 31, 2015 and 2014 : Three Months Ended October 31, 2015 2014 (in thousands, except share and per share amounts) Numerator: Net loss $ (1,630 ) $ (2,997 ) Net loss per share: Basic $ (0.02 ) $ (0.04 ) Diluted $ (0.02 ) $ (0.04 ) Denominator: Weighted average shares used in computing net loss per share: Basic 71,242,897 69,316,700 Diluted 71,242,897 69,316,700 The following weighted shares outstanding of potential common stock were excluded from the computation of diluted loss per share for the periods presented because including them would have been antidilutive: Three Months Ended October 31, 2015 2014 Stock options to purchase common stock 1,573,487 2,386,474 Restricted stock units 3,360,099 3,763,160 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Oct. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies There has been no material change in the Company’s contractual obligations and commitments other than in the ordinary course of business since the Company’s fiscal year ended July 31, 2015 . See the Annual Report on Form 10-K for the fiscal year ended July 31, 2015 for additional information regarding the Company’s contractual obligations. Leases The Company leases certain facilities and equipment under operating leases. On December 5, 2011, the Company entered into a seven -year lease for a facility to serve as its corporate headquarters, located in Foster City, California, for approximately 97,674 square feet of space which commenced on August 1, 2012. In connection with this lease, the Company opened an unsecured letter of credit with Silicon Valley Bank for $1.2 million . On July 1, 2015 , the unsecured letter of credit was reduced to $0.4 million in accordance with the lease agreement. Lease expense for all worldwide facilities and equipment, which is being recognized on a straight-line basis over terms of the various leases, was $1.4 million and $1.6 million for the three months ended October 31, 2015 and 2014 , respectively. Letters of Credit The Company had two outstanding letters of credit required to secure contractual commitments and prepayments as of October 31, 2015 and July 31, 2015 , respectively. In addition to the unsecured letter of credit for the building lease, the Company had an unsecured letter of credit agreement related to a customer arrangement for Polish Zloty 10.0 million (approximately $2.6 million as of October 31, 2015 ) to secure contractual commitments and prepayments. No amounts were outstanding under the Company’s unsecured letters of credit as of October 31, 2015 or July 31, 2015 . Legal Proceedings From time to time, the Company is involved in various legal proceedings and receives claims, arising from the normal course of business activities. The Company accrues for estimated losses in the accompanying condensed consolidated financial statements for matters with respect to which the Company believes the likelihood of an adverse outcome is probable and the amount of the loss is reasonably estimable. Indemnification The Company sells software licenses and services to its customers under contracts (“Software License”). Each Software License contains the terms of the contractual arrangement with the customer and generally includes certain provisions for defending the customer against any claims that the Company’s software infringes upon a patent, copyright, trademark, or other proprietary right of a third party. Software Licenses also indemnify the customer against losses, expenses, and liabilities from damages that may be assessed against the customer in the event the Company’s software is found to infringe upon such third party rights. The Company has not had to reimburse any of its customers for losses related to indemnification provisions and no material claims against the Company were outstanding as of October 31, 2015 or July 31, 2015 . For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under various Software Licenses, the Company cannot estimate the amount of potential future payments, if any, related to indemnification provisions. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of these persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-based Compensation | 3 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity and Stock-based Compensation [Abstract] | |
Stockholders' Equity and Stock-based Compensation | Stockholders’ Equity and Stock-Based Compensation Stock-Based Compensation Expense Stock-based compensation expense related to all employee and non-employee stock-based awards is as follows: Three Months Ended October 31, 2015 2014 Stock-based compensation expenses: (in thousands) Cost of license revenues $ 89 $ 49 Cost of maintenance revenues 339 277 Cost of services revenues 4,363 3,513 Research and development 3,672 2,143 Sales and marketing 3,430 2,987 General and administrative 3,254 3,019 Total stock-based compensation expenses $ 15,147 $ 11,988 As of October 31, 2015 , total unamortized compensation cost, adjusted for estimated forfeitures, was as follows: As of October 31, 2015 Unrecognized Expense Weighted Average Expected Recognition Period (in thousands) (in years) Stock options $ 4,444 2.1 Restricted stock units 136,218 2.7 $ 140,662 RSUs RSU activity under the Company’s equity incentive plans is as follows: RSUs Outstanding Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (1) Balance as of July 31, 2015 2,882,674 $ 42.65 $ 170,222 Granted 1,160,754 $ 54.00 Released (356,094 ) $ 34.29 $ 18,439 Canceled (117,521 ) $ 44.13 Balance as of October 31, 2015 3,569,813 $ 47.13 $ 207,870 Expected to vest as of October 31, 2015 3,282,240 $ 46.83 $ 191,125 (1) Aggregate intrinsic value at each period end represents the total market value of RSUs at the Company’s closing stock price of $58.23 and $59.05 on October 31, 2015 and July 31, 2015 , respectively. Aggregate intrinsic value for released RSUs represents the total market value of released RSUs at date of release. Stock Options Stock option activity under the Company’s equity incentive plans is as follows: Stock Options Outstanding Number of Stock Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (1) (in years) (in thousands) Balance as of July 31, 2015 1,822,062 $ 14.29 4.9 $ 81,548 Granted 10,000 $ 54.00 Exercised (146,744 ) $ 9.96 $ 6,433 Canceled (16,376 ) $ 42.33 Balance as of October 31, 2015 1,668,942 $ 14.64 4.8 $ 72,753 Vested and expected to vest as of October 31, 2015 1,656,065 $ 14.38 4.7 $ 72,616 Exercisable as of October 31, 2015 1,402,411 $ 9.09 4.1 $ 68,921 (1) Aggregate intrinsic value at each period end represents the difference between the Company's closing stock prices of $58.23 and $59.05 on October 31, 2015 and July 31, 2015 , respectively, and the exercise price of outstanding options. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price. Valuation of Awards The assumptions used to estimate the grant date fair value of options and weighted average grant date fair value of options are as follows: Three Months Ended October 31, 2015 2014 Expected life (in years) 4.9 6.0 Risk-free interest rate 1.49% 1.92% Expected volatility 38.8% 45.1% Expected dividend yield —% —% Weighted average fair value of options at grant date $19.18 $20.53 Beginning fiscal year 2016, the Company began estimating the expected term using a historical data method, instead of the simplified method, because it now has sufficient data to estimate the stock option exercise period based on its historical stock option activity and employee termination data. In addition, the Company began estimating the volatility using its own common stock data, instead of volatility of several comparable public listed peers, as the Company now has sufficient trading history of its stock. Common Stock Reserved for Issuance As of October 31, 2015 and July 31, 2015 , the Company was authorized to issue 500,000,000 shares of common stock with a par value of $0.0001 per share, and 71,491,693 and 71,005,738 shares of common stock were issued and outstanding, respectively. As of October 31, 2015 and July 31, 2015 , the Company had reserved shares of common stock for future issuance as follows: October 31, 2015 July 31, 2015 Exercise of stock options to purchase common stock 1,668,942 1,822,062 Vesting of restricted stock units 3,569,813 2,882,674 Shares available under stock plans 13,343,932 14,363,906 Total common stock reserved for issuance 18,582,687 19,068,642 |
Income Taxes
Income Taxes | 3 Months Ended |
Oct. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized income tax benefits of $6.4 million and $0.6 million for the three months ended October 31, 2015 and 2014 , respectively. The change was primarily due to a larger loss before taxes for the three months ended October 31, 2015 , as compared to the same period a year ago. The effective tax rate of 79.8% for the three months ended October 31, 2015 differs from the statutory U.S. federal income tax rate of 35% mainly due to permanent differences for foreign stock-based compensation, U.S. domestic production activity deduction, and the tax rate differences between the United States and foreign countries. The Company provides U.S. income taxes on the earnings of foreign subsidiaries, unless the subsidiaries’ earnings are considered indefinitely reinvested outside the United States. As of October 31, 2015 , U.S. income taxes were not provided for on the cumulative total of $25.8 million undistributed earnings from certain foreign subsidiaries. As of October 31, 2015 , the unrecognized deferred tax liability for these earnings was approximately $8.7 million . During the three months ended October 31, 2015 , the change in unrecognized tax benefits from the beginning of the period was $0.2 million . Accordingly, as of October 31, 2015 , the Company had unrecognized tax benefits of $2.8 million that, if recognized, would affect the Company’s effective tax rate. |
Segment Information
Segment Information | 3 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in one segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews separate revenues information for the Company’s license, maintenance and professional services offerings, while all other financial information is reviewed on a consolidated basis. All of the Company’s principal operations and decision-making functions are located in the United States. The following table sets forth revenues by country and region based on the billing address of the customer: Three Months Ended October 31, 2015 2014 (in thousands) United States $ 43,107 $ 38,948 Canada 9,058 8,387 Other Americas 2,449 1,858 Total Americas 54,614 49,193 United Kingdom 9,687 12,198 Other EMEA 6,875 11,789 Total EMEA 16,562 23,987 Total APAC 11,104 6,554 Total revenues $ 82,280 $ 79,734 No country, other than those presented above, accounted for more than 10% of revenues during the three months ended October 31, 2015 and 2014 . The following table sets forth the Company’s long-lived assets, including intangibles and goodwill, net by geographic region: October 31, 2015 July 31, 2015 (in thousands) Americas $ 23,810 $ 22,746 EMEA 2,051 2,183 APAC 401 435 Total $ 26,262 $ 25,364 |
The Company and Summary of Si15
The Company and Summary of Significant Accounting Policies and Estimates (Policies) | 3 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Guidewire Software, Inc., a Delaware corporation, was incorporated on September 20, 2001. Guidewire Software, Inc., together with its subsidiaries (the “Company”), provides a technology platform which consists of three key elements: core transaction processing, data management and analytics, and digital engagement. It supports core insurance operations, including underwriting and policy administration, claim management and billing. The Company’s customers include insurance carriers for property and casualty insurance. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and accompanying notes include the Company and its wholly-owned subsidiaries, and reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the interim periods presented. All inter-company balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and related notes, together with management’s discussion and analysis of financial condition and results of operations, presented in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s consolidated financial statements for the fiscal year ended July 31, 2015 included in the Company’s Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition, the useful lives of property and equipment and intangible assets, allowance for doubtful accounts, valuation allowance for deferred tax assets, stock-based compensation, annual bonus attainment, income tax uncertainties, valuation of goodwill and intangible assets, and contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. |
Cash. Cash Equivalents and Investments | Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. Cash equivalents consist of commercial paper and money market funds. Investments Management determines the appropriate classification of investments at the time of purchase based upon management’s intent with regard to such investments. All investments are held as available-for-sale investments. The Company classifies investments as short-term when they have remaining contractual maturities of one year or less from the balance sheet date, and as long-term when the investments have remaining contractual maturities of more than one year from the balance sheet date. All investments are recorded at fair value with unrealized holding gains and losses included in accumulated other comprehensive loss. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, investments and accounts receivable. The Company maintains its cash, cash equivalents and investments with high quality financial institutions. The Company is exposed to credit risk for cash held in financial institutions in the event of a default to the extent that such amounts recorded on the balance sheet are in excess of amounts that are insured by the Federal Deposit Insurance Corporation (“FDIC”). |
Revenue Recognition | Revenue Recognition The Company enters into arrangements to deliver multiple products or services (multiple-elements). The Company applies software revenue recognition rules and allocates the total revenues among elements based on vendor-specific objective evidence (“VSOE”) of fair value of each element. The Company recognizes revenue on a net basis excluding taxes collected from customers and remitted to government authorities. Revenues are derived from three sources: (i) License fees, related to term (or time-based) licenses, perpetual software licenses, and other; (ii) Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if, available during the maintenance term; and (iii) Services fees, related to professional services related to implementation of our software, reimbursable travel and training. Revenues are recognized when all of the following criteria are met: • Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period. • Delivery or performance has occurred . The Company’s software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials. • Fees are fixed or determinable. The Company assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Term and perpetual license fees are not considered to be fixed or determinable until they become due. Fees from term licenses are generally invoiced in annual, or in certain cases quarterly, installments over the term of the agreement beginning on the effective date of the license. Perpetual license fees are generally due between 30 and 60 days from delivery of software, however in certain cases extended payment terms may be offered. • Collectability is probable. Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from 30 to 90 days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied. VSOE of fair value does not exist for the Company’s software licenses; therefore, the Company allocates revenues to software licenses using the residual method. Under the residual method, the amount recognized for license fees is the difference between the total fixed and determinable fees and the VSOE of fair value for the undelivered elements under the arrangement. The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for those elements when sold separately. VSOE of fair value for maintenance is established using the stated maintenance renewal rate in the customer’s contract. For term licenses with duration of one year or less, no VSOE of fair value for maintenance exists. VSOE of fair value for services is established if a substantial majority of historical stand-alone selling prices for a service fall within a reasonably narrow price range. If the undelivered elements are all service elements and VSOE of fair value does not exist for one or more service element, the total arrangement fee is recognized ratably over the longest service period starting at software delivery, assuming all the related services have been made available to the customer. In certain offerings sold as fixed fee arrangements, the Company recognizes services revenues on a proportional performance basis as performance obligations are completed by using the ratio of labor hours to date as an input measure compared to total estimated labor hours for the consulting services. In cases where professional services are deemed to be essential to the functionality of the software, the arrangement is accounted for using contract accounting until the essential services are complete. If reliable estimates of total project costs can be made, the Company applies the percentage-of-completion method whereby percentage toward completion is measured by using the ratio of service billings to date compared to total estimated service billings for the consulting services. Service billings approximate labor hours as an input measure since they are generally billed monthly on a time and material basis. The fees related to the maintenance are recognized over the period the maintenance is provided. |
Deferred Revenues | The Company generally invoices fees for licenses and maintenance to its customers in annual or, in certain cases, quarterly installments payable in advance. Deferred revenues represent amounts, which are billed to or collected from customers for which one or more of the revenue recognition criteria have not been met. The deferred revenues balance does not represent the total contract value of annual or multi-year, non-cancellable arrangements. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement carrying amounts of existing assets and liabilities by using enacted tax rates in effect for the year in which the difference is expected to reverse. Deferred tax assets and liabilities are classified as either current or noncurrent based on the related asset or liability. Deferred tax assets related to excess tax benefits are recorded when utilized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded when it is more likely than not that some portion or all of such deferred tax assets will not be realized and is based on the positive and negative evidence about the future including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The effective tax rate in a given financial statement period may also be materially impacted by changes in the mix and level of income or losses, changes in the expected outcome of audits, or changes in the deferred tax valuation allowance. The Company records interest and penalties related to unrecognized tax benefits as income tax expense in its condensed consolidated statement of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense related to its stock options and restricted stock units (“RSUs”) granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures. The awards are subject to time-based vesting, which generally occurs over a period of 4 years . Option awards expire 10 years from the grant date. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, of the Company’s stock options using the Black-Scholes option-pricing model. The Company recognizes the fair value of stock-based compensation for awards which contain only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes the compensation cost for awards which contain performance conditions based upon the probability of that performance condition being met, net of estimated forfeitures, using the graded method. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU 2015-17, Income Taxes (Subtopic 740-10) which provides guidance for balance sheet classification of deferred taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current on the balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods with earlier application permitted as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have not yet selected a transition method and continue to evaluate the impact that this guidance will have on our consolidated financial statements. Cloud Computing Arrangements that Include a Software Element In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for service contracts. ASU 2015-05 is effective for the Company in the first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all arrangements entered into or materially modified after the effective date and represent a change in accounting principle; or (ii) retrospectively. The Company has evaluated the impact of the adoption of ASU 2015-05 and concluded that the adoption will not have a material impact on its consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In July 2015, the FASB deferred the effective date to annual reporting periods and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The standard will be effective for the Company beginning August 1, 2018 and permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method and continue to evaluate the impact that this guidance will have on our consolidated financial statements. |
Fair Value of Financial Instr16
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Oct. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | Available-for-sale investments within cash equivalents and investments consist of the following: October 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) U.S. agency securities $ 104,668 $ 16 $ (8 ) $ 104,676 Commercial paper 120,295 11 (1 ) 120,305 Corporate bonds 265,127 91 (281 ) 264,937 U.S. government bonds 43,081 3 (28 ) 43,056 Foreign government bonds 8,630 5 — 8,635 Money market funds 100,704 — — 100,704 Total $ 642,505 $ 126 $ (318 ) $ 642,313 July 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value (in thousands) U.S. agency securities $ 82,946 $ 21 $ (4 ) $ 82,963 Commercial paper 142,822 13 (4 ) 142,831 Corporate bonds 281,942 47 (216 ) 281,773 U.S. government bonds 32,529 13 (2 ) 32,540 Foreign government bonds 8,663 7 (2 ) 8,668 Certificate of deposit 2,700 — — 2,700 Money market funds 88,319 — — 88,319 Total $ 639,921 $ 101 $ (228 ) $ 639,794 |
Schedule of Unrealized Loss on Investments | The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: October 31, 2015 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Commercial paper $ 56,926 $ (1 ) $ — $ — $ 56,926 $ (1 ) U.S. agency securities 35,508 (8 ) — — 35,508 (8 ) Corporate bonds 142,383 (280 ) 5,875 (1 ) 148,258 (281 ) U.S. government bonds 25,057 (28 ) — — 25,057 (28 ) Foreign government bonds 2,900 * — — 2,900 * Total $ 262,774 $ (317 ) $ 5,875 $ (1 ) $ 268,649 $ (318 ) |
Investments Classified by Contractual Maturity Date | The following table summarizes the contractual maturities of the Company’s available-for-sale securities as of October 31, 2015 : Less Than 12 Months 12 to 36 Months Total (in thousands) U.S. agency securities $ 78,848 $ 25,828 $ 104,676 Commercial paper 120,305 — 120,305 Corporate bonds 178,710 86,227 264,937 U.S. government bonds 27,993 15,063 43,056 Foreign government bonds 8,635 — 8,635 Money market funds 100,704 — 100,704 Total $ 515,195 $ 127,118 $ 642,313 |
Fair Value, Assets Measured on Recurring Basis | The following tables summarize the Company’s financial assets measured at fair value on a recurring basis, by level within the fair value hierarchy as of October 31, 2015 and July 31, 2015 : October 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents: Commercial paper $ — $ 70,691 $ — $ 70,691 Money market funds 100,704 — — 100,704 Short-term investments: U.S. agency securities — 78,848 — 78,848 Commercial paper — 49,614 — 49,614 Corporate bonds — 178,710 — 178,710 U.S. government bonds — 27,993 — 27,993 Foreign government bonds — 8,635 — 8,635 Long-term investments: U.S. agency securities — 25,828 — 25,828 U.S. government bonds — 15,063 — 15,063 Corporate bonds — 86,227 — 86,227 Total assets $ 100,704 $ 541,609 $ — $ 642,313 July 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents: Commercial paper $ — $ 86,085 $ — $ 86,085 Money market funds 88,319 — — 88,319 Short-term investments: U.S. agency securities — 68,212 — 68,212 Commercial paper — 56,746 — 56,746 U. S. government bonds — 19,983 — 19,983 Foreign government bonds — 8,668 — 8,668 Corporate bonds — 202,964 — 202,964 Certificate of deposit — 2,700 — 2,700 Long-term investments: U.S. agency securities — 14,751 — 14,751 Corporate bonds — 78,809 — 78,809 U.S. government bonds — 12,557 — 12,557 Total assets $ 88,319 $ 551,475 $ — $ 639,794 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Oct. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Property and equipment | Property and equipment consist of the following: October 31, 2015 July 31, 2015 (in thousands) Computer hardware $ 17,477 $ 15,099 Software 4,873 4,867 Furniture and fixtures 3,126 3,065 Leasehold improvements 8,089 8,040 Total property and equipment 33,565 31,071 Less accumulated depreciation (20,147 ) (18,911 ) Property and equipment, net $ 13,418 $ 12,160 |
Goodwill and Intangible Assets | Intangible assets consist of the following: October 31, 2015 July 31, 2015 Acquired technology: (in thousands) Cost $ 7,200 $ 7,200 Accumulated amortization (3,561 ) (3,201 ) Intangible assets, net $ 3,639 $ 3,999 |
Future Amortization Expense | Estimated aggregate amortization expense for each of the next three fiscal years is as follows: Future Amortization (in thousands) Fiscal year ending July 31, 2016 (remainder of fiscal year) 1,080 2017 1,440 2018 1,119 Total $ 3,639 |
Accrued Employee Compensation | Accrued employee compensation consists of the following: October 31, 2015 July 31, 2015 (in thousands) Accrued bonuses $ 4,641 $ 19,819 Accrued commission 674 5,008 Accrued vacation 8,374 7,980 Accrued salaries, payroll taxes and benefits 3,629 4,428 Total $ 17,318 $ 37,235 |
Components of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss by component during the three months ended October 31, 2015 were as follows: Foreign Currency Items Unrealized gain (loss) on available-for-sale securities Total (in thousands) Balance as of July 31, 2015 $ (6,247 ) $ (96 ) $ (6,343 ) Other comprehensive gain (loss) before reclassification (287 ) (46 ) (333 ) Amounts reclassified from accumulated other comprehensive loss to earnings — (20 ) (20 ) Tax effect — (4 ) (4 ) Balance as of October 31, 2015 $ (6,534 ) $ (166 ) $ (6,700 ) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
Company's basic and diluted earnings per share | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the three months ended October 31, 2015 and 2014 : Three Months Ended October 31, 2015 2014 (in thousands, except share and per share amounts) Numerator: Net loss $ (1,630 ) $ (2,997 ) Net loss per share: Basic $ (0.02 ) $ (0.04 ) Diluted $ (0.02 ) $ (0.04 ) Denominator: Weighted average shares used in computing net loss per share: Basic 71,242,897 69,316,700 Diluted 71,242,897 69,316,700 |
Schedule of Antidilutive Securities excluded from EPS | The following weighted shares outstanding of potential common stock were excluded from the computation of diluted loss per share for the periods presented because including them would have been antidilutive: Three Months Ended October 31, 2015 2014 Stock options to purchase common stock 1,573,487 2,386,474 Restricted stock units 3,360,099 3,763,160 |
Stockholders' Equity and Stoc19
Stockholders' Equity and Stock-based Compensation (Tables) | 3 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity and Stock-based Compensation [Abstract] | |
Stock-based compensation expense | Stock-based compensation expense related to all employee and non-employee stock-based awards is as follows: Three Months Ended October 31, 2015 2014 Stock-based compensation expenses: (in thousands) Cost of license revenues $ 89 $ 49 Cost of maintenance revenues 339 277 Cost of services revenues 4,363 3,513 Research and development 3,672 2,143 Sales and marketing 3,430 2,987 General and administrative 3,254 3,019 Total stock-based compensation expenses $ 15,147 $ 11,988 |
Unrecognized compensation cost, adjusted for estimated forfeitures | As of October 31, 2015 , total unamortized compensation cost, adjusted for estimated forfeitures, was as follows: As of October 31, 2015 Unrecognized Expense Weighted Average Expected Recognition Period (in thousands) (in years) Stock options $ 4,444 2.1 Restricted stock units 136,218 2.7 $ 140,662 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | RSU activity under the Company’s equity incentive plans is as follows: RSUs Outstanding Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (1) Balance as of July 31, 2015 2,882,674 $ 42.65 $ 170,222 Granted 1,160,754 $ 54.00 Released (356,094 ) $ 34.29 $ 18,439 Canceled (117,521 ) $ 44.13 Balance as of October 31, 2015 3,569,813 $ 47.13 $ 207,870 Expected to vest as of October 31, 2015 3,282,240 $ 46.83 $ 191,125 |
Schedule of Share-based Compensation, Stock Options, Activity | Stock option activity under the Company’s equity incentive plans is as follows: Stock Options Outstanding Number of Stock Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (1) (in years) (in thousands) Balance as of July 31, 2015 1,822,062 $ 14.29 4.9 $ 81,548 Granted 10,000 $ 54.00 Exercised (146,744 ) $ 9.96 $ 6,433 Canceled (16,376 ) $ 42.33 Balance as of October 31, 2015 1,668,942 $ 14.64 4.8 $ 72,753 Vested and expected to vest as of October 31, 2015 1,656,065 $ 14.38 4.7 $ 72,616 Exercisable as of October 31, 2015 1,402,411 $ 9.09 4.1 $ 68,921 (1) Aggregate intrinsic value at each period end represents the difference between the Company's closing stock prices of $58.23 and $59.05 on October 31, 2015 and July 31, 2015 , respectively, and the exercise price of outstanding options. |
Black-Scholes valuation assumptions | Three Months Ended October 31, 2015 2014 Expected life (in years) 4.9 6.0 Risk-free interest rate 1.49% 1.92% Expected volatility 38.8% 45.1% Expected dividend yield —% —% Weighted average fair value of options at grant date $19.18 $20.53 |
Common Stock Reserved for Issuance | As of October 31, 2015 and July 31, 2015 , the Company had reserved shares of common stock for future issuance as follows: October 31, 2015 July 31, 2015 Exercise of stock options to purchase common stock 1,668,942 1,822,062 Vesting of restricted stock units 3,569,813 2,882,674 Shares available under stock plans 13,343,932 14,363,906 Total common stock reserved for issuance 18,582,687 19,068,642 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Revenues by country | The following table sets forth revenues by country and region based on the billing address of the customer: Three Months Ended October 31, 2015 2014 (in thousands) United States $ 43,107 $ 38,948 Canada 9,058 8,387 Other Americas 2,449 1,858 Total Americas 54,614 49,193 United Kingdom 9,687 12,198 Other EMEA 6,875 11,789 Total EMEA 16,562 23,987 Total APAC 11,104 6,554 Total revenues $ 82,280 $ 79,734 |
Property and equipment, net by geographic region | The following table sets forth the Company’s long-lived assets, including intangibles and goodwill, net by geographic region: October 31, 2015 July 31, 2015 (in thousands) Americas $ 23,810 $ 22,746 EMEA 2,051 2,183 APAC 401 435 Total $ 26,262 $ 25,364 |
The Company and Summary of Si21
The Company and Summary of Significant Accounting Policies and Estimates (Details Textual) - customer | 3 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2015 | |
Company and Summary of Significant Accounting Policies and Estimates (Textual) [Abstract] | |||
Number of Customers Concentration Of Credit Risk | 0 | 0 | |
Percentage of Revenue | 10.00% | 10.00% | |
Number of Customers Concentration of Credit Risk Receivables | 2 | 0 | |
Percentage of accounts receivable | 10.00% | 10.00% | |
Restricted Stock Units (RSUs) | |||
Company and Summary of Significant Accounting Policies and Estimates (Textual) [Abstract] | |||
Period of RSUs time based Vesting | 4 years | ||
Stock Options | |||
Company and Summary of Significant Accounting Policies and Estimates (Textual) [Abstract] | |||
Period of expiration for share based payment awards | 10 years | ||
Minimum | |||
Company and Summary of Significant Accounting Policies and Estimates (Textual) [Abstract] | |||
Range of General Payment Terms | 30 days | ||
Maximum | |||
Company and Summary of Significant Accounting Policies and Estimates (Textual) [Abstract] | |||
Range of General Payment Terms | 90 days |
Fair Value of Financial Instr22
Fair Value of Financial Instruments Fair Value of Financial Instruments (Details 1) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 642,505 | $ 639,921 |
Unrealized Gains | 126 | 101 |
Unrealized Losses | (318) | (228) |
Total assets | 642,313 | 639,794 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 104,668 | 82,946 |
Unrealized Gains | 16 | 21 |
Unrealized Losses | (8) | (4) |
Total assets | 104,676 | 82,963 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 120,295 | 142,822 |
Unrealized Gains | 11 | 13 |
Unrealized Losses | (1) | (4) |
Total assets | 120,305 | 142,831 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 265,127 | 281,942 |
Unrealized Gains | 91 | 47 |
Unrealized Losses | (281) | (216) |
Total assets | 264,937 | 281,773 |
U.S. government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 43,081 | 32,529 |
Unrealized Gains | 3 | 13 |
Unrealized Losses | (28) | (2) |
Total assets | 43,056 | 32,540 |
Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 8,630 | 8,663 |
Unrealized Gains | 5 | 7 |
Unrealized Losses | 0 | (2) |
Total assets | 8,635 | 8,668 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 100,704 | 88,319 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Total assets | $ 100,704 | 88,319 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 2,700 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Total assets | $ 2,700 |
Fair Value of Financial Instr23
Fair Value of Financial Instruments (Details 2) $ in Thousands | Oct. 31, 2015USD ($)investment |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | $ 262,774 |
Less than 12 Months, Aggregate Losses | (317) |
Twelve Months or Longer, Fair Value | 5,875 |
12 Months or Longer, Aggregate Losses | (1) |
Fair Value | 268,649 |
Aggregate Losses | $ (318) |
Number of Positions | investment | 96 |
Commercial paper | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | $ 56,926 |
Less than 12 Months, Aggregate Losses | (1) |
Twelve Months or Longer, Fair Value | 0 |
12 Months or Longer, Aggregate Losses | 0 |
Fair Value | 56,926 |
Aggregate Losses | (1) |
U.S. agency securities | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | 35,508 |
Less than 12 Months, Aggregate Losses | (8) |
Twelve Months or Longer, Fair Value | 0 |
12 Months or Longer, Aggregate Losses | 0 |
Fair Value | 35,508 |
Aggregate Losses | (8) |
Corporate bonds | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | 142,383 |
Less than 12 Months, Aggregate Losses | (280) |
Twelve Months or Longer, Fair Value | 5,875 |
12 Months or Longer, Aggregate Losses | (1) |
Fair Value | 148,258 |
Aggregate Losses | (281) |
U.S. government bonds | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | 25,057 |
Less than 12 Months, Aggregate Losses | (28) |
Twelve Months or Longer, Fair Value | 0 |
12 Months or Longer, Aggregate Losses | 0 |
Fair Value | 25,057 |
Aggregate Losses | (28) |
Foreign government bonds | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis, Alternative [Abstract] | |
Less than Twelve Months, Fair Value | 2,900 |
Twelve Months or Longer, Fair Value | 0 |
12 Months or Longer, Aggregate Losses | 0 |
Fair Value | $ 2,900 |
Fair Value of Financial Instr24
Fair Value of Financial Instruments Fair Value of Financial Instruments (Details 3) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | $ 515,195 | |
12 Months or Greater | 127,118 | |
Estimated Fair Value | 642,313 | $ 639,794 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 78,848 | |
12 Months or Greater | 25,828 | |
Estimated Fair Value | 104,676 | 82,963 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 120,305 | |
12 Months or Greater | 0 | |
Estimated Fair Value | 120,305 | 142,831 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 178,710 | |
12 Months or Greater | 86,227 | |
Estimated Fair Value | 264,937 | 281,773 |
U.S. government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 27,993 | |
12 Months or Greater | 15,063 | |
Estimated Fair Value | 43,056 | 32,540 |
Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 8,635 | |
12 Months or Greater | 0 | |
Estimated Fair Value | 8,635 | 8,668 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less than 12 Months | 100,704 | |
12 Months or Greater | 0 | |
Estimated Fair Value | $ 100,704 | 88,319 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | $ 2,700 |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Details 4) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 642,313 | $ 639,794 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 100,704 | 88,319 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 541,609 | 551,475 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 78,848 | 68,212 |
Long-term investments: | 25,828 | 14,751 |
Total assets | 104,676 | 82,963 |
U.S. agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
U.S. agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 78,848 | 68,212 |
Long-term investments: | 25,828 | 14,751 |
U.S. agency securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 49,614 | 56,746 |
Total assets | 120,305 | 142,831 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 49,614 | 56,746 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
U.S. government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 27,993 | 19,983 |
Long-term investments: | 15,063 | 12,557 |
Total assets | 43,056 | 32,540 |
U.S. government bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
U.S. government bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 27,993 | 19,983 |
Long-term investments: | 15,063 | 12,557 |
U.S. government bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 8,635 | 8,668 |
Total assets | 8,635 | 8,668 |
Foreign government bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Foreign government bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 8,635 | 8,668 |
Foreign government bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 178,710 | 202,964 |
Long-term investments: | 86,227 | 78,809 |
Total assets | 264,937 | 281,773 |
Corporate bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Corporate bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 178,710 | 202,964 |
Long-term investments: | 86,227 | 78,809 |
Corporate bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 2,700 | |
Total assets | 2,700 | |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | |
Certificates of deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 2,700 | |
Certificates of deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 70,691 | 86,085 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 70,691 | 86,085 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 100,704 | 88,319 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 100,704 | 88,319 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | $ 0 | $ 0 |
Balance Sheet Components (Detai
Balance Sheet Components (Details 1) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Balance Sheet Related Disclosures [Abstract] | ||
Computer hardware | $ 17,477 | $ 15,099 |
Software | 4,873 | 4,867 |
Furniture and fixtures | 3,126 | 3,065 |
Leasehold improvements | 8,089 | 8,040 |
Total property and equipment | 33,565 | 31,071 |
Less accumulated depreciation | (20,147) | (18,911) |
Property, Plant and Equipment, Net | $ 13,418 | $ 12,160 |
Balance Sheet Components (Det27
Balance Sheet Components (Details 2) $ in Thousands | Oct. 31, 2015USD ($) |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 9,205 |
Balance at end of period | $ 9,205 |
Balance Sheet Components (Det28
Balance Sheet Components (Details 3) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 3,639 | |
Acquired Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,200 | $ 7,200 |
Accumulated amortization | (3,561) | (3,201) |
Intangible assets, net | $ 3,639 | $ 3,999 |
Balance Sheet Components (Det29
Balance Sheet Components (Details 4) $ in Thousands | Oct. 31, 2015USD ($) |
Balance Sheet Related Disclosures [Abstract] | |
2016 (remainder of fiscal year) | $ 1,080 |
2,017 | 1,440 |
2,018 | 1,119 |
Intangible assets, net | $ 3,639 |
Balance Sheet Components (Det30
Balance Sheet Components (Details 5) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued bonuses | $ 4,641 | $ 19,819 |
Accrued commission | 674 | 5,008 |
Accrued vacation | 8,374 | 7,980 |
Accrued salaries, payroll taxes and benefits | 3,629 | 4,428 |
Total | $ 17,318 | $ 37,235 |
Balance Sheet Components (Det31
Balance Sheet Components (Details 6) $ in Thousands | 3 Months Ended |
Oct. 31, 2015USD ($) | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at beginning of period | $ (6,343) |
Other comprehensive gain (loss) before reclassification | (333) |
Amounts reclassified from accumulated other comprehensive loss to earnings | (20) |
Tax effect | (4) |
Balance at end of period | (6,700) |
Accumulated Translation Adjustment [Member] | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at beginning of period | (6,247) |
Other comprehensive gain (loss) before reclassification | (287) |
Amounts reclassified from accumulated other comprehensive loss to earnings | 0 |
Tax effect | 0 |
Balance at end of period | (6,534) |
Available-for-sale Securities [Member] | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance at beginning of period | (96) |
Other comprehensive gain (loss) before reclassification | (46) |
Amounts reclassified from accumulated other comprehensive loss to earnings | (20) |
Tax effect | (4) |
Balance at end of period | $ (166) |
Balance Sheet Components (Det32
Balance Sheet Components (Details Textual) - USD ($) | 3 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |||
Property and equipment pledged as collateral | $ 0 | $ 0 | |
Depreciation | 1,400,000 | $ 1,400,000 | |
Amortization expense | $ 360,000 | $ 360,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Numerator: | ||
Net loss | $ (1,630) | $ (2,997) |
Net loss per share: | ||
Basic | $ (0.02) | $ (0.04) |
Diluted | $ (0.02) | $ (0.04) |
Weighted average shares used in computing net loss per share: | ||
Basic | 71,242,897 | 69,316,700 |
Diluted | 71,242,897 | 69,316,700 |
Net Income (Loss) Per Share (34
Net Income (Loss) Per Share (Details 2) - shares | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Stock options to purchase common stock | ||
Net Income (Loss) Per Share (Textual) [Abstract] | ||
Schedule of antidilutive securities excluded from EPS | 1,573,487 | 2,386,474 |
Restricted stock units | ||
Net Income (Loss) Per Share (Textual) [Abstract] | ||
Schedule of antidilutive securities excluded from EPS | 3,360,099 | 3,763,160 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) $ in Millions | 3 Months Ended | ||||||
Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2015PLNft² | Oct. 31, 2015USD ($)ft² | Jul. 31, 2015letter_of_credit | Jul. 01, 2015USD ($) | Aug. 01, 2012USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Duration of lease for a facility to serve as its corporate headquarters | 7 years | ||||||
Rentable area of current corporate headquarters | ft² | 97,674 | 97,674 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | PLN | PLN 10,000,000 | ||||||
Lease expense for all worldwide facilities and equipment | $ 1.4 | $ 1.6 | |||||
Number of Unsecured Credit Facilities Outstanding | letter_of_credit | 2 | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 2.6 | ||||||
Line of Credit Associated With Operating Lease | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0.4 | $ 1.2 |
Stockholders' Equity and Stoc36
Stockholders' Equity and Stock-based Compensation (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | $ 15,147 | $ 11,988 |
Unrecognized Expense | 140,662 | |
Cost of license revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 89 | 49 |
Cost of maintenance revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 339 | 277 |
Cost of services revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 4,363 | 3,513 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 3,672 | 2,143 |
Sales and marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 3,430 | 2,987 |
General and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expenses | 3,254 | $ 3,019 |
Stock Options | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Unrecognized Expense | $ 4,444 | |
Average Expected Recognition Period | 2 years 1 month 6 days | |
Restricted Stock Units (RSUs) | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Unrecognized Expense | $ 136,218 | |
Average Expected Recognition Period | 2 years 8 months 12 days |
Stockholders' Equity and Stoc37
Stockholders' Equity and Stock-based Compensation (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Jul. 31, 2015 | ||
Number of Stock Options Outstanding | |||
Balance at beginning of period | 1,822,062 | ||
Granted | 10,000 | ||
Exercised | (146,744) | ||
Canceled | (16,376) | ||
Balance at end of period | 1,668,942 | 1,822,062 | |
Vested and expected to vest as of October 31, 2015 | 1,656,065 | ||
Exercisable as of October 31, 2015 | 1,402,411 | ||
Weighted Average Exercise Price | |||
Balance at beginning of period | $ 14.29 | ||
Granted | 54 | ||
Exercised | 9.96 | ||
Canceled | 42.33 | ||
Balance at end of period | 14.64 | $ 14.29 | |
Vested and expected to vest as of October 31, 2015 | 14.38 | ||
Exercisable as of October 31, 2015 | $ 9.09 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Weighted Average Remaining Contractual Life | 4 years 9 months 18 days | 4 years 10 months 24 days | |
Vested and expected to vest as of October 31, 2015 | 4 years 8 months 12 days | ||
Exercisable as of October 31, 2015 | 4 years 1 month 6 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Aggregate Intrinsic Value [Abstract] | |||
Aggregate intrinsic value | [1] | $ 72,753 | $ 81,548 |
Exercised | 6,433 | ||
Vested and expected to vest as of October 31, 2015 | [1] | 72,616 | |
Exercisable as of October 31, 2015 | [1] | $ 68,921 | |
Share Price | $ 58.23 | $ 59.05 | |
Restricted Stock Units (RSUs) [Member] | |||
Number of RSUs Outstanding | |||
Balance at beginning of period | 2,882,674 | ||
Granted | 1,160,754 | ||
Released | (356,094) | ||
Canceled | (117,521) | ||
Balance at end of period | 3,569,813 | 2,882,674 | |
Expected to vest as of October 31, 2015 | 3,282,240 | ||
Weighted Average Grant Date Fair Value | |||
Balance at beginning of period | $ 42.65 | ||
Granted | 54 | ||
Released | 34.29 | ||
Canceled | 44.13 | ||
Balance at end of period | 47.13 | $ 42.65 | |
Expected to vest as of October 31, 2015 | $ 46.83 | ||
Aggregate intrinsic value, Nonvested | [2] | $ 207,870 | $ 170,222 |
Aggregate intrinsic value, Vested | [2] | 18,439 | |
Aggregate intrinsic value, Expected to vest | [2] | $ 191,125 | |
[1] | Aggregate intrinsic value at each period end represents the difference between the Company's closing stock prices of $58.23 and $59.05 on October 31, 2015 and July 31, 2015, respectively, and the exercise price of outstanding options. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price. | ||
[2] | Aggregate intrinsic value at each period end represents the total market value of RSUs at the Company’s closing stock price of $58.23 and $59.05 on October 31, 2015 and July 31, 2015, respectively. Aggregate intrinsic value for released RSUs represents the total market value of released RSUs at date of release. |
Stockholders' Equity and Stoc38
Stockholders' Equity and Stock-based Compensation (Details 3) - $ / shares | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Summary of assumptions for fair value of employee stock option estimates | ||
Risk-free interest rate, minimum | 1.49% | 1.92% |
Risk-free interest rate, maximum | 1.49% | 1.92% |
Expected volatility, minimum | 38.80% | 45.10% |
Expected volatility, maximum | 38.80% | 45.10% |
Expected dividend yield | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 19.18 | |
Grant date fair value (USD per share), Options | $ 20.53 | |
Minimum | ||
Summary of assumptions for fair value of employee stock option estimates | ||
Expected life (in years) | 4 years 10 months 24 days | 6 years |
Maximum | ||
Summary of assumptions for fair value of employee stock option estimates | ||
Expected life (in years) | 4 years 10 months 24 days | 6 years |
Stockholders' Equity and Stoc39
Stockholders' Equity and Stock-based Compensation (Details 4) - shares | Oct. 31, 2015 | Jul. 31, 2015 |
Common Stock Reserved for Issuance | ||
Exercise of stock options to purchase common stock | 1,668,942 | 1,822,062 |
Issuances of shares available under stock plans | 13,343,932 | 14,363,906 |
Total common stock reserved for issuance | 18,582,687 | 19,068,642 |
Restricted Stock Units (RSUs) | ||
Common Stock Reserved for Issuance | ||
Vesting of restricted stock units | 3,569,813 | 2,882,674 |
Stockholders' Equity and Stoc40
Stockholders' Equity and Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2015 | |
Class of Stock [Line Items] | |||
Unrecognized Expense | $ 140,662 | ||
Total intrinsic value of options exercised | $ 6,433 | ||
Grant date fair value (USD per share), Options | $ 20.53 | ||
Stockholders Equity and Stock Based Compensation (Additional Textual) [Abstract] | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common Stock, Shares, Outstanding | 71,491,693 | 71,005,738 | |
Restricted Stock Units (RSUs) | |||
Class of Stock [Line Items] | |||
Unrecognized Expense | $ 136,218 | ||
Grant date fair value (USD per share) | $ 54 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Benefit from income taxes | $ (6,420) | $ (612) |
Effective Income Tax Rate, Continuing Operations | 79.80% | |
Percentage of Statutory federal income tax rate | 35.00% | |
Undistributed Earnings of Foreign Subsidiaries | $ 25,800 | |
Undistributed earnings from certain foreign subsidiaries | 8,700 | |
Unrecognized Tax Benefits, Period Increase (Decrease) | 200 | |
Unrecognized tax benefits | $ 2,800 |
Segment Information (Details 1)
Segment Information (Details 1) $ in Thousands | 3 Months Ended | |
Oct. 31, 2015USD ($)country | Oct. 31, 2014USD ($)country | |
Revenues : | ||
Total revenues | $ 82,280 | $ 79,734 |
Entity-wide revenue attributable to other country | country | 0 | 0 |
EntityWideRevenueMajorCountryPercentage | 10.00% | 10.00% |
United States | ||
Revenues : | ||
Total revenues | $ 43,107 | $ 38,948 |
Canada | ||
Revenues : | ||
Total revenues | 9,058 | 8,387 |
United Kingdom | ||
Revenues : | ||
Total revenues | 9,687 | 12,198 |
Other EMEA | ||
Revenues : | ||
Total revenues | 6,875 | 11,789 |
Other | ||
Revenues : | ||
Total revenues | 2,449 | 1,858 |
Americas | ||
Revenues : | ||
Total revenues | 54,614 | 49,193 |
EMEA | ||
Revenues : | ||
Total revenues | 16,562 | 23,987 |
APAC | ||
Revenues : | ||
Total revenues | $ 11,104 | $ 6,554 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Thousands | Oct. 31, 2015 | Jul. 31, 2015 |
Long-lived asset, including intangibles and goodwill | ||
Total | $ 26,262 | $ 25,364 |
Americas | ||
Long-lived asset, including intangibles and goodwill | ||
Total | 23,810 | 22,746 |
EMEA | ||
Long-lived asset, including intangibles and goodwill | ||
Total | 2,051 | 2,183 |
APAC | ||
Long-lived asset, including intangibles and goodwill | ||
Total | $ 401 | $ 435 |