| Balance Sheet Components | Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): As of As of Prepaid hosting costs $ 8,342 $ 12,228 Deposits 2,454 1,857 Prepaid software subscription costs 4,043 3,104 Prepaid taxes 1,451 3,612 Prepaid value added taxes 5,574 5,167 Other 7,042 6,655 Total prepaid expenses and other current assets $ 28,906 $ 32,623 Property and Equipment, Net The cost and accumulated depreciation of property and equipment were as follows (in thousands): Useful Life (in years) As of As of Leasehold improvements Lesser of estimated useful $ 8,281 $ 8,405 Computer hardware and software 3 5,197 5,687 Furniture and fixtures 3 - 5 5,223 5,072 Assets under construction 3,057 1,661 Total property and equipment 21,758 20,825 Less: accumulated depreciation (13,093) (13,065) Property and equipment, net $ 8,665 $ 7,760 Depreciation expense related to property and equipment was $0.8 million for each of the three months ended January 31, 2021 and 2020, respectively. Depreciation expense related to property and equipment was $2.2 million and $2.1 million for the nine months ended January 31, 2021 and 2020, respectively. Intangible Assets, Net Intangible assets consisted of the following as of January 31, 2021 and April 30, 2020 (in thousands): January 31, 2021 Gross Fair Accumulated Net Book Weighted Developed technology $ 44,830 $ 18,742 $ 26,088 3.5 Customer relationships 19,598 7,091 12,507 2.7 Trade names 2,872 1,644 1,228 2.7 Total $ 67,300 $ 27,477 $ 39,823 3.2 April 30, 2020 Gross Fair Accumulated Net Book Weighted Developed technology $ 44,830 $ 12,412 $ 32,418 4.1 Customer relationships 19,598 3,210 16,388 3.4 Trade names 2,872 1,223 1,649 3.4 Total $ 67,300 $ 16,845 $ 50,455 3.9 Amortization expense for the intangible assets for the three and nine months ended January 31, 2021 and 2020 was as follows (in thousands): Three Months Ended January 31, Nine Months Ended January 31, 2021 2020 2021 2020 Cost of revenue—cost of license—self-managed $ 346 $ 347 $ 1,039 $ 602 Cost of revenue—cost of subscription—self-managed and SaaS 1,764 2,660 5,289 4,057 Sales and marketing 1,428 1,451 4,302 1,859 Total amortization of acquired intangible assets $ 3,538 $ 4,458 $ 10,630 $ 6,518 The expected future amortization expense related to the intangible assets as of January 31, 2021 was as follows (in thousands, by fiscal year): Remainder of 2021 $ 3,537 2022 12,947 2023 11,890 2024 8,715 2025 2,734 Total $ 39,823 Goodwill The following table represents the changes to goodwill (in thousands): Carrying Balance as of April 30, 2020 $ 197,877 Foreign currency translation adjustment 788 Balance as of January 31, 2021 $ 198,665 There was no impairment of goodwill during the nine months ended January 31, 2021 and 2020. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): As of As of Accrued expenses $ 13,280 $ 10,864 Value added taxes payable 5,808 7,230 Other 6,136 4,116 Total accrued expenses and other liabilities $ 25,224 $ 22,210 Accrued Compensation and Benefits Accrued compensation and benefits consisted of the following (in thousands): As of As of Accrued vacation $ 22,200 $ 17,971 Accrued commissions 9,220 16,259 Accrued payroll taxes and withholding taxes 6,535 7,588 Other 4,552 6,591 Total accrued compensation and benefits $ 42,507 $ 48,409 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 As of Unbilled accounts receivable, included in accounts receivable, net $ 5,837 $ 2,622 Deferred contract acquisition costs $ 72,187 $ 43,549 Deferred revenue $ 334,010 $ 259,702 Significant changes in the unbilled accounts receivable and th e deferred revenue balances were as follows (in thousands): Unbilled Accounts Receivable Nine Months Ended January 31, 2021 2020 Beginning balance $ 2,622 $ 1,710 Amounts transferred to accounts receivable from unbilled accounts receivable presented at the beginning of the period (2,622) (1,710) Additions through acquisition — 321 Revenue recognized during the period in excess of invoices issued 5,837 1,774 Ending balance $ 5,837 $ 2,095 Deferred Revenue Nine Months Ended January 31, 2021 2020 Beginning balance $ 259,702 $ 170,666 Increases due to invoices issued, excluding amounts recognized as revenue during the period 274,292 175,469 Amounts transferred to deferred revenue from accrued expenses and other liabilities upon entering into contracts with customers, net of revenue recognized during the period 5,424 — Increase from acquisition, net of revenue recognized — 6,147 Revenue recognized that was included in deferred revenue balance at beginning of period (205,408) (142,488) Ending balance $ 334,010 $ 209,794 Deferred Contract Acquisition Costs Deferred contract acquisition costs represent costs that are incremental to the acquisition of customer contracts, which consist mainly of sales commissions and associated payroll taxes. The Company determines whether costs should be deferred based on sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract. The Company determines the period of benefit for commissions paid for the acquisition of an initial subscription contract by taking into consideration its initial estimated customer life and the technological life of its software and related significant features. 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 amortized over an estimated period of benefit of five years while commissions paid related to renewal contracts are amortized based on the pattern of the associated revenue recognition over the related contractual renewal period. Commissions paid on professional services are typically amortized in accordance with the associated revenue as the commissions paid on new and renewal professional services are commensurate with each other. 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 nine months ended January 31, 2021. The following table summarizes the activity of the deferred contract acquisition costs (in thousands): Nine Months Ended January 31, 2021 2020 Beginning balance $ 43,549 $ 26,150 Capitalization of contract acquisition costs 57,093 26,331 Amortization of deferred contract acquisition costs (28,455) (20,581) Ending balance $ 72,187 $ 31,900 Allowance for Credit Losses The following is a summary of the changes in the Company’s allowance for credit losses (in thousands): Balance at April 30, 2020 $ 1,247 Cumulative-effect adjustment from adoption of ASU 2016-13 (367) Provision 3,441 Write-offs (2,490) Balance at January 31, 2021 $ 1,831 |
