Balance Sheet Components | 6. Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): As of October 31, 2019 As of April 30, 2019 Prepaid hosting costs $ 12,959 $ 12,006 Deposits 1,335 1,268 Prepaid software subscription costs 4,614 4,326 Deferred stock-based compensation expense 379 784 Prepaid value added taxes 6,363 4,239 Other 6,209 8,249 Total prepaid expenses and other current assets $ 31,859 $ 30,872 Property and Equipment, Net The cost and accumulated depreciation of property and equipment were as follows (in thousands): Useful Life (in years) As of October 31, 2019 As of April 30, 2019 Leasehold improvements Lesser of estimated useful life or remaining lease term $ 6,978 $ 6,176 Computer hardware and software 3 5,612 5,393 Furniture and fixtures 3-5 3,779 3,094 Assets under construction 3,365 1,243 Total property and equipment 19,734 15,906 Less: accumulated depreciation (11,732 ) (10,458 ) Property and equipment, net $ 8,002 $ 5,448 Depreciation expense related to property and equipment was $0.7 million for both the three months ended October 31, 2019 and 2018, and $1.3 million and $1.5 million for the six months ended October 31, 2019 and 2018, respectively. Intangible Assets, Net Intangible assets consisted of the following as of October 31, 2019 and April 30, 2019 (in thousands): October 31, 2019 Gross Fair Value Accumulated Amortization Net Book Value Weighted Average Remaining Useful Life (in years) Developed technology $ 43,330 $ 7,297 $ 36,033 4.5 Trade names 3,072 923 2,149 3.9 Customer relationships 20,898 617 20,281 3.9 Total $ 67,300 $ 8,837 $ 58,463 April 30, 2019 Gross Fair Value Accumulated Amortization Net Book Value Weighted Average Remaining Useful Life (in years) Developed technology $ 12,130 $ 5,646 $ 6,484 2.5 Trade names 972 863 109 2.2 Customer relationships 398 268 130 2.2 Total $ 13,500 $ 6,777 $ 6,723 Amortization expense for the intangible assets for the three and six months ended October 31, 2019 and 2018 was as follows (in thousands): Three Months Ended October 31, Six Months Ended October 31, 2019 2018 2019 2018 Cost of revenue—cost of license—self-managed $ 158 $ 97 $ 255 $ 194 Cost of revenue—cost of subscription—self-managed and SaaS 861 637 1,397 1,213 Sales and marketing 379 40 408 77 Total amortization of acquired intangible assets $ 1,398 $ 774 $ 2,060 $ 1,484 The expected future amortization expense related to the intangible assets as of October 31, 2019 was as follows (in thousands, by fiscal year): Remainder of 2020 $ 7,270 2021 14,506 2022 13,286 2023 11,952 2024 8,715 Thereafter 2,734 Total $ 58,463 Goodwill The following table represents the changes to goodwill (in thousands): Carrying Amount Balance as of April 30, 2019 $ 19,846 Addition from acquisition 179,213 Foreign currency translation adjustment (262 ) Balance as of October 31, 2019 $ 198,797 There was no impairment of goodwill during the six months ended October 31, 2019 and 2018. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): As of October 31, 2019 As of April 30, 2019 Accrued expenses $ 9,496 $ 8,124 Income taxes payable 162 149 Value added taxes payable 3,430 4,236 Share repurchase liability 1,117 1,612 Other 7,613 4,619 Total accrued expenses and other liabilities $ 21,818 $ 18,740 Accrued Compensation and Benefits Accrued compensation and benefits consisted of the following (in thousands): As of October 31, 2019 As of April 30, 2019 Accrued vacation $ 14,898 $ 9,655 Accrued commissions 8,036 6,510 Accrued payroll taxes and withholding taxes 17,279 1,868 Post-combination compensation liability - 655 Other 4,765 3,459 Total accrued compensation and benefits $ 44,978 $ 22,147 Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. For annual contracts, the Company typically invoices customers at the time of entering into the contract. For multi-year agreements, the Company generally invoices customers on an annual basis prior to each anniversary of the contract start date. The Company records unbilled accounts receivable related to revenue recognized in excess of amounts invoiced as the Company has an unconditional right to invoice and receive payment in the future related to those fulfilled obligations. Invoicing customers prior to performance creates a contract liability, deferred revenue, which is recognized in accordance with the Company’s revenue recognition policy. The following table provides information about unbilled accounts receivable, deferred contract acquisition costs and deferred revenue from contracts with customers (in thousands): As of October 31, 2019 As of April 30, 2019 Unbilled accounts receivable, included in accounts receivable, net $ 2,630 $ 1,710 Deferred contract acquisition costs $ 29,234 $ 26,150 Deferred revenue $ 201,331 $ 170,666 Significant changes in the unbilled accounts receivable and the deferred revenue balances were as follows (in thousands): Unbilled Accounts Receivable Six Months Ended October 31, 2019 2018 Beginning balance $ 1,710 $ 1,139 Amounts transferred to accounts receivable from unbilled accounts receivable presented at the beginning of the period (1,710 ) (1,139 ) Additions through acquisition 321 - Revenue recognized during the period in excess of invoices issued 2,309 1,294 Ending balance $ 2,630 $ 1,294 Deferred Revenue Six Months Ended October 31, 2019 2018 Beginning balance $ 170,666 $ 102,561 Increases due to invoices issued, excluding amounts recognized as revenue during the period 135,665 94,830 Increase from acquisition, net of revenue recognized 6,147 - Revenue recognized that was included in deferred revenue balance at beginning of period (111,147 ) (70,112 ) Ending balance $ 201,331 $ 127,279 Deferred Contract Acquisition Costs During the six months ended October 31, 2018 and the fiscal year ending April 30, 2019, sales commissions for renewal of a contract were considered commensurate with the commissions paid for the acquisition of the initial contract given there was no substantive difference in commission rates in proportion to their respective contract values. During the six months ended October 31, 2019, the Company updated its sales commissions plan by incorporating different commission rates for initial subscription contract sales and subsequent subscription renewals. Subsequent to this change, sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rates in proportion to their respective contract values. Accordingly, commissions paid upon the initial acquisition of a contract are now amortized over an estimated period of benefit of five years while commissions paid related to renewal contracts are now amortized . Deferred contract acquisition costs are expensed commensurate with the pattern of revenue recognition as performance obligations are satisfied. Amortization of deferred contract acquisition costs is recognized in sales and marketing expense in the consolidated statement of operations. The Company periodically reviews the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. The Company did not recognize any impairment of deferred contract acquisition costs during the six months ended October 31, 2019. The following table summarizes the activity of the deferred contract acquisition costs (in thousands): Six Months Ended October 31, 2019 2018 Beginning balance $ 26,150 $ 18,079 Capitalization of contract acquisition costs 17,005 13,637 Amortization of deferred contract acquisition costs (13,921 ) (8,848 ) Ending balance $ 29,234 $ 22,868 |