Cover Page
Cover Page - shares | 3 Months Ended | |
Oct. 31, 2023 | Nov. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38413 | |
Entity Registrant Name | ZSCALER, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1173892 | |
Entity Address, Address Line One | 120 Holger Way | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95134 | |
City Area Code | 408 | |
Local Phone Number | 533-0288 | |
Title of 12(b) Security | Common Stock, $0.001 Par Value | |
Trading Symbol | ZS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Shares Outstanding | 148,333,445 | |
Entity Central Index Key | 0001713683 | |
Current Fiscal Year End Date | --07-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 1,361,723 | $ 1,262,206 |
Short-term investments | 962,681 | 838,026 |
Accounts receivable, net | 366,843 | 582,636 |
Deferred contract acquisition costs | 119,417 | 115,827 |
Prepaid expenses and other current assets | 80,926 | 91,619 |
Total current assets | 2,891,590 | 2,890,314 |
Property and equipment, net | 265,592 | 242,355 |
Operating lease right-of-use assets | 77,137 | 70,671 |
Deferred contract acquisition costs, noncurrent | 253,386 | 259,407 |
Acquired intangible assets, net | 25,623 | 25,859 |
Goodwill | 92,415 | 89,192 |
Other noncurrent assets | 29,841 | 30,519 |
Total assets | 3,635,584 | 3,608,317 |
Current liabilities: | ||
Accounts payable | 23,234 | 18,481 |
Accrued expenses and other current liabilities | 70,950 | 64,975 |
Accrued compensation | 97,568 | 136,800 |
Deferred revenue | 1,244,528 | 1,281,143 |
Operating lease liabilities | 38,138 | 34,469 |
Total current liabilities | 1,474,418 | 1,535,868 |
Convertible senior notes, net | 1,134,026 | 1,134,159 |
Deferred revenue, noncurrent | 155,016 | 158,533 |
Operating lease liabilities, noncurrent | 43,606 | 41,917 |
Other noncurrent liabilities | 20,993 | 12,728 |
Total liabilities | 2,828,059 | 2,883,205 |
Commitments and contingencies (Note 10) | ||
Stockholders’ Equity | ||
Common stock; $0.001 par value; 1,000,000 shares authorized as of October 31, 2023 and July 31, 2023; 148,313 and 147,169 shares issued and outstanding as of October 31, 2023 and July 31, 2023, respectively | 148 | 147 |
Additional paid-in capital | 1,949,189 | 1,816,915 |
Accumulated other comprehensive loss | (17,955) | (1,576) |
Accumulated deficit | (1,123,857) | (1,090,374) |
Total stockholders’ equity | 807,525 | 725,112 |
Total liabilities and stockholders’ equity | $ 3,635,584 | $ 3,608,317 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2023 | Jul. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 148,313,000 | 147,169,000 |
Common stock, shares outstanding (in shares) | 148,313,000 | 147,169,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 496,703 | $ 355,548 |
Cost of revenue | 111,394 | 76,697 |
Gross profit | 385,309 | 278,851 |
Operating expenses: | ||
Sales and marketing | 267,111 | 228,836 |
Research and development | 113,539 | 74,946 |
General and administrative | 50,716 | 44,156 |
Total operating expenses | 431,366 | 347,938 |
Loss from operations | (46,057) | (69,087) |
Interest income | 25,942 | 7,865 |
Interest expense | (3,159) | (1,331) |
Other expense, net | (1,212) | (863) |
Loss before income taxes | (24,486) | (63,416) |
Provision for income taxes | 8,997 | 4,746 |
Net loss | $ (33,483) | $ (68,162) |
Net loss per share, basic (in dollars per share) | $ (0.23) | $ (0.48) |
Net loss per share, diluted (in dollars per share) | $ (0.23) | $ (0.48) |
Weighted-average shares used in computing net loss per share, basic (in shares) | 147,625 | 143,476 |
Weighted-average shares used in computing net loss per share, diluted (in shares) | 147,625 | 143,476 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (33,483) | $ (68,162) |
Available-for-sale securities: | ||
Change in net unrealized losses on available-for-sale securities | (589) | (2,648) |
Cash flow hedging instruments: | ||
Change in net unrealized losses | (15,136) | (14,039) |
Net realized losses (gains) reclassified into net loss | (654) | 4,713 |
Net change on cash flow hedges | (15,790) | (9,326) |
Other comprehensive loss | (16,379) | (11,974) |
Comprehensive loss | $ (49,862) | $ (80,136) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Jul. 31, 2022 | 143,038 | |||||||
Beginning balance at Jul. 31, 2022 | $ 573,300 | $ (169,899) | $ 143 | $ 1,590,885 | $ (273,738) | $ (25,850) | $ (991,878) | $ 103,839 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 109 | |||||||
Issuance of common stock upon exercise of stock options | 982 | 982 | ||||||
Vesting of restricted stock units and other stock issuances (in shares) | 1,063 | |||||||
Vesting of restricted stock units and other stock issuances | 0 | $ 1 | (1) | |||||
Stock-based compensation | 107,028 | 107,028 | ||||||
Other comprehensive loss | (11,974) | (11,974) | ||||||
Net loss | (68,162) | (68,162) | ||||||
Ending balance (in shares) at Oct. 31, 2022 | 144,210 | |||||||
Ending balance at Oct. 31, 2022 | $ 431,275 | $ 144 | 1,425,156 | (37,824) | (956,201) | |||
Beginning balance (in shares) at Jul. 31, 2023 | 147,169 | 147,169 | ||||||
Beginning balance at Jul. 31, 2023 | $ 725,112 | $ 147 | 1,816,915 | (1,576) | (1,090,374) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 151 | 151 | ||||||
Issuance of common stock upon exercise of stock options | $ 1,256 | 1,256 | ||||||
Vesting of restricted stock units and other stock issuances (in shares) | 993 | |||||||
Vesting of restricted stock units and other stock issuances | 0 | $ 1 | (1) | |||||
Stock-based compensation | 131,019 | 131,019 | ||||||
Other comprehensive loss | (16,379) | (16,379) | ||||||
Net loss | $ (33,483) | (33,483) | ||||||
Ending balance (in shares) at Oct. 31, 2023 | 148,313 | 148,313 | ||||||
Ending balance at Oct. 31, 2023 | $ 807,525 | $ 148 | $ 1,949,189 | $ (17,955) | $ (1,123,857) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash Flows From Operating Activities | ||
Net loss | $ (33,483) | $ (68,162) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization expense | 13,962 | 11,876 |
Amortization expense of acquired intangible assets | 3,036 | 2,552 |
Amortization of deferred contract acquisition costs | 30,111 | 22,325 |
Amortization of debt issuance costs | 977 | 972 |
Non-cash operating lease costs | 9,903 | 7,108 |
Stock-based compensation expense | 129,138 | 105,173 |
Accretion of investments purchased at a discount | (3,199) | (165) |
Unrealized losses on hedging transactions | 1,564 | 1,185 |
Deferred income taxes | (43) | 65 |
Other | 1,031 | (937) |
Changes in operating assets and liabilities, net of effects of business combinations | ||
Accounts receivable | 215,082 | 130,636 |
Deferred contract acquisition costs | (27,680) | (26,795) |
Prepaid expenses, other current and noncurrent assets | 1,349 | (7,579) |
Accounts payable | 4,596 | 3,000 |
Accrued expenses, other current and noncurrent liabilities | 4,859 | 3,627 |
Accrued compensation | (39,232) | (32,797) |
Deferred revenue | (40,154) | (15,340) |
Operating lease liabilities | (11,011) | (8,287) |
Net cash provided by operating activities | 260,806 | 128,457 |
Cash Flows From Investing Activities | ||
Purchases of property, equipment and other assets | (28,659) | (25,202) |
Capitalized internal-use software | (7,429) | (7,641) |
Payments for business acquisitions, net of cash acquired | (4,377) | 0 |
Purchase of strategic investments | 0 | (700) |
Purchases of short-term investments | (375,929) | (210,255) |
Proceeds from maturities of short-term investments | 253,849 | 186,096 |
Net cash used in investing activities | (162,545) | (57,702) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock upon exercise of stock options | 1,256 | 982 |
Other | 0 | (2) |
Net cash provided by financing activities | 1,256 | 980 |
Net increase in cash and cash equivalents | 99,517 | 71,735 |
Cash and cash equivalents at beginning of period | 1,262,206 | 1,013,210 |
Cash and cash equivalents at end of period | 1,361,723 | 1,084,945 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for income taxes, net of tax refunds | 5,286 | 3,003 |
Non-Cash Activities | ||
Operating lease right-of-use assets obtained in exchange for operating lease obligations, net of terminations | 15,617 | 10,390 |
Net change in purchased equipment included in accounts payable and accrued expenses | $ 489 | $ 1,592 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 3 Months Ended |
Oct. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies Description of the Business Zscaler, Inc. ("Zscaler," the "Company," "we," "us," or "our") is a cloud security company that developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and organization’s policies. Our solution is a purpose-built, multi-tenant, distributed cloud platform that incorporates the security functionality needed to enable users, applications, and devices to safely and efficiently utilize authorized applications and services based on an organization’s business policies. We deliver our solutions using a software-as-a-service ("SaaS") business model and sell subscriptions to customers to access our cloud platform, together with related support services. We were incorporated in Delaware in September 2007 and conduct business worldwide, with presence in North America, Europe and Asia. Our headquarters are in San Jose, California. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") and applicable regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting, and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company's audited consolidated financial statements and related notes in its Annual Report on Form 10-K for the fiscal year ended July 31, 2023 (the "Fiscal 2023 Form 10-K"), as filed with the SEC on September 14, 2023. Interim Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of July 31, 2023 was derived from the audited consolidated financial statements as of that date. The accompanying interim unaudited condensed consolidated financial statements, including the condensed consolidated balance sheet as of October 31, 2023, the condensed consolidated statements of operations for the three months ended October 31, 2023 and 2022, the condensed consolidated statements of comprehensive loss for the three months ended October 31, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three months ended October 31, 2023 and 2022 and the condensed consolidated statements of cash flows for the three months ended October 31, 2023 and 2022 are unaudited. The related financial data and the other financial information disclosed in the accompanying notes to these interim unaudited condensed consolidated financial statements are also unaudited. These interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with our annual consolidated financial statements and, in our opinion, include all normal recurring adjustments necessary to state fairly our quarterly results. The results of operations for the three months ended October 31, 2023 are not necessarily indicative of the results to be expected for our fiscal year ending July 31, 2024 or for any other future fiscal year or interim period. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, the determination of revenue recognition, deferred revenue, deferred contract acquisition costs, capitalized internal-use software, valuation of acquired intangible assets, period of benefit generated from our deferred contract acquisition costs, allowance for doubtful accounts, valuation of common stock options and stock-based awards, useful lives of property and equipment, useful lives of acquired intangible assets, recoverability of goodwill, valuation of deferred tax assets and liabilities, loss contingencies related to litigation, fair value of convertible senior notes and the discount rate used for operating leases. Management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ significantly from these estimates, and such differences may be material to the condensed consolidated financial statements. Due to uncertainty in the macroeconomic environment, including but not limited to the effects of inflation, and geopolitical events, there is ongoing disruption in the global economy and financial markets. We are not aware of any specific event or circumstances that would require an update to our estimates, judgments or assumptions or a revision to the carrying value of our assets or liabilities as of the date of issuance of these condensed consolidated financial statements. These estimates, judgments and assumptions may change in the future, as new events occur or additional information is obtained . In August 2023, we completed an assessment of the useful lives of our servers and networking equipment, which resulted in an extension of their useful lives from four five Fiscal Year Our fiscal year ends on July 31. References to fiscal 2024, for example, refer to our fiscal year ending July 31, 2024. Significant Accounting Polici es Our significant accounting policies are described in the Fiscal 2023 Form 10-K. There have been no significant changes to these policies that have had a material impact on the condensed consolidated financial statements and related notes for the three months ended October 31, 2023. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue Subscription and support revenue is recognized over time and accounted for approximately 97% of our revenue for each of the three months ended October 31, 2023 and 2022. The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our cloud platform: Three Months Ended October 31, 2023 2022 Amount % Revenue Amount % Revenue (in thousands, except for percentage data) United States $ 247,531 50 % $ 175,515 49 % Europe, Middle East and Africa 157,245 32 % 116,993 33 % Asia Pacific 75,080 15 % 52,270 15 % Other 16,847 3 % 10,770 3 % Total $ 496,703 100 % $ 355,548 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended October 31, 2023 2022 Amount % Revenue Amount % Revenue (in thousands, except for percentage data) Channel partners $ 454,456 91 % $ 329,357 93 % Direct customers 42,247 9 % 26,191 7 % Total $ 496,703 100 % $ 355,548 100 % Significant Customers No single customer accounted for 10% or more of the total revenue in the periods presented. The following table summarizes the concentration of 10% or more of the total balance of accounts receivable, net: October 31, 2023 July 31, 2023 Channel partner A 10% * (*) Represents less than 10%. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. Deferred revenue, including current and noncurrent balances, as of October 31, 2023 and July 31, 2023 was $1,399.5 million and $1,439.7 million, respectively. In the three months ended October 31, 2023 and 2022, we recognized revenue of $462.9 million and $329.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of these periods. Remaining Performance Obligations The typical subscription and support term is one Costs to Obtain and Fulfill a Contract We capitalize sales commission and associated payroll taxes paid to sales personnel that are incremental to the acquisition of channel partner and direct customer contracts. These costs are recorded as deferred contract acquisition costs in the condensed consolidated balance sheets. The activity of the deferred contract acquisition costs consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Beginning balance $ 375,234 $ 297,002 Capitalization of contract acquisition costs 27,680 26,795 Amortization of deferred contract acquisition costs (30,111) (22,325) Ending balance $ 372,803 $ 301,472 The outstanding balance of the deferred contract acquisition costs consisted of the following: October 31, 2023 July 31, 2023 (in thousands) Deferred contract acquisition costs, current $ 119,417 $ 115,827 Deferred contract acquisition costs, noncurrent 253,386 259,407 Total deferred contract acquisition costs $ 372,803 $ 375,234 Sales commissions accrued but not paid as of October 31, 2023 and July 31, 2023, totaled $18.2 million and $48.0 million, respectively, which are included within accrued compensation in the condensed consolidated balance sheets. |
Cash Equivalents and Short-Term
Cash Equivalents and Short-Term Investments | 3 Months Ended |
Oct. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Short-Term Investments | Cash Equivalents and Short-Term Investments Cash equivalents and short-term investments consisted of the following as of October 31, 2023: Amortized Unrealized Unrealized Fair Value Cash equivalents: (in thousands) Money market funds $ 899,921 $ — $ — $ 899,921 U.S. treasury securities 190,281 — (14) 190,267 U.S. government agency securities 110,554 — (15) 110,539 Corporate debt securities 22,665 — — 22,665 Total cash equivalents $ 1,223,421 $ — $ (29) $ 1,223,392 Short-term investments: U.S. treasury securities $ 184,061 $ — $ (2,717) $ 181,344 U.S. government agency securities 296,931 — (2,965) 293,966 Corporate debt securities 492,648 2 (5,279) 487,371 Total short-term investments $ 973,640 $ 2 $ (10,961) $ 962,681 Total cash equivalents and short-term investments $ 2,197,061 $ 2 $ (10,990) $ 2,186,073 Cash equivalents and short-term investments consisted of the following as of July 31, 2023: Amortized Unrealized Unrealized Fair Value Cash equivalents: (in thousands) Money market funds $ 768,003 $ — $ — $ 768,003 U.S. treasury securities 157,250 — (30) 157,220 U.S. government agency securities 166,671 — (35) 166,636 Corporate debt securities 38,800 — — 38,800 Total cash equivalents $ 1,130,724 $ — $ (65) $ 1,130,659 Short-term investments: U.S. treasury securities $ 175,451 $ — $ (1,875) $ 173,576 U.S. government agency securities 266,392 2 (4,299) 262,095 Corporate debt securities 406,517 49 (4,211) 402,355 Total short-term investments $ 848,360 $ 51 $ (10,385) $ 838,026 Total cash equivalents and short-term investments $ 1,979,084 $ 51 $ (10,450) $ 1,968,685 The amortized cost and fair value of our short-term investments based on their stated maturities consisted of the following as of October 31, 2023: Amortized Fair Value (in thousands) Due within one year $ 535,738 $ 532,490 Due between one to three years 437,902 430,191 Total $ 973,640 $ 962,681 Short-term investments that were in an unrealized loss position as of October 31, 2023 consisted of the following: Less than 12 Months Greater than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (in thousands) U.S. treasury securities $ 181,343 $ (2,717) $ — $ — $ 181,343 $ (2,717) U.S. government agency securities 193,452 (455) 100,514 (2,510) 293,966 (2,965) Corporate debt securities 314,180 (3,760) 64,495 (1,519) 378,675 (5,279) Total $ 688,975 $ (6,932) $ 165,009 $ (4,029) $ 853,984 $ (10,961) Short-term investments that were in an unrealized loss position as of July 31, 2023 consisted of the following: Less than 12 Months Greater than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (in thousands) U.S. treasury securities $ 173,576 $ (1,875) $ — $ — $ 173,576 $ (1,875) U.S. government agency securities 119,558 (292) 131,530 (4,007) 251,088 (4,299) Corporate debt securities 232,504 (2,034) 82,599 (2,177) 315,103 (4,211) Total $ 525,638 $ (4,201) $ 214,129 $ (6,184) $ 739,767 $ (10,385) We review the individual securities that have unrealized losses in our short-term investment portfolio on a regular basis. We evaluate, among others, whether we have the intention to sell any of these investments and whether it is not more likely than not that we will be required to sell any of them before recovery of the amortized cost basis. Neither of these criteria were met in any period presented. We additionally evaluate whether the decline in fair value of the corporate debt securities below their amortized cost basis is related to credit losses or other factors. Based on this evaluation, we determined that unrealized losses of the above securities were primarily attributable to changes in interest rates and non-credit related factors. Accordingly, we determined that an allowance for credit losses was unnecessary for our short-term investments as of October 31, 2023 and July 31, 2023. As of October 31, 2023 and July 31, 2023, we recorded $9.5 million and $7.2 million, respectively, of accrued interest receivable within prepaid expenses and other current assets in the condensed consolidated balance sheets. Strategic Investments |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Oct. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our money market funds are classified within Level I due to the highly liquid nature of these assets and have quoted prices in active markets. Certain of our investments in available-for-sale securities (i.e., U.S. treasury securities, U.S. government agency securities and corporate debt securities), as well as our assets and liabilities arising from our foreign currency forward contracts and our interest rate swap contracts, are classified within Level II. The fair value of our Level II financial assets and liabilities is determined by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments, for substantially the full term of the financial assets and liabilities. Assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of October 31, 2023, consisted of the following: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 899,921 $ 899,921 $ — $ — U.S. treasury securities 190,267 — 190,267 — U.S. government agency securities 110,539 — 110,539 — Corporate debt securities 22,665 — 22,665 — Total cash equivalents $ 1,223,392 $ 899,921 $ 323,471 $ — Short-term investments: U.S. treasury securities $ 181,344 $ — $ 181,344 $ — U.S. government agency securities 293,966 — 293,966 — Corporate debt securities 487,371 — 487,371 — Total short-term investments $ 962,681 $ — $ 962,681 $ — Total cash equivalents and short-term investments $ 2,186,073 $ 899,921 $ 1,286,152 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 4,740 $ — $ 4,740 $ — Foreign currency contracts assets-noncurrent (2) $ 137 $ — $ 137 $ — Foreign currency contracts liabilities-current (3) $ 5,978 $ — $ 5,978 $ — Foreign currency contracts liabilities-noncurrent (4) $ 2,286 $ — $ 2,286 $ — Interest rate contracts liabilities-current (3) $ 5,334 $ — $ 5,334 $ — Interest rate contracts liabilities-noncurrent (4) $ 3,787 $ — $ 3,787 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 914 $ — $ 914 $ — Foreign currency contracts liabilities-current (3) $ 860 $ — $ 860 $ — (1) Included within prepaid expenses and other current assets in the condensed consolidated balance sheets. (2) Included within other noncurrent assets in the condensed consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the condensed consolidated balance sheets. (4) Included within other noncurrent liabilities in the condensed consolidated balance sheets. Assets that are measured at fair value on a recurring basis consisted of the following as of July 31, 2023: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 768,003 $ 768,003 $ — $ — U.S. treasury securities 157,220 — 157,220 — U.S. government agency securities 166,636 — 166,636 — Corporate debt securities 38,800 — 38,800 — Total cash equivalents $ 1,130,659 $ 768,003 $ 362,656 $ — Short-term investments: U.S. treasury securities $ 173,576 $ — $ 173,576 $ — U.S. government agency securities 262,095 — 262,095 — Corporate debt securities 402,355 — 402,355 — Total short-term investments $ 838,026 $ — $ 838,026 $ — Total cash equivalents and short-term investments $ 1,968,685 $ 768,003 $ 1,200,682 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 12,581 $ — $ 12,581 $ — Foreign currency contract assets-noncurrent (2) $ 2,264 $ — $ 2,264 $ — Foreign currency contracts liabilities-current (3) $ 1,452 $ — $ 1,452 $ — Foreign currency contracts liabilities-noncurrent (4) $ 669 $ — $ 669 $ — Interest rate contracts liabilities-current (3) $ 6,439 $ — $ 6,439 $ — Interest rate contracts liabilities-noncurrent (4) $ 1,588 $ — $ 1,588 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 2,061 $ — $ 2,061 $ — Foreign currency contracts liabilities-current (3) $ 465 $ — $ 465 $ — (1) Included within prepaid expenses and other current assets in the consolidated balance sheets. (2) Included within other noncurrent assets in the consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the consolidated balance sheets. (4) Included within other noncurrent liabilities in the consolidated balance sheets. We did not have transfers between levels of the fair value hierarchy of assets measured at fair value during the periods presented. Refer to Note 9, Convertible Senior Notes, for the carrying amount and estimated fair value of our convertible senior notes as of October 31, 2023 and July 31, 2023. |
Property and Equipment and Purc
Property and Equipment and Purchased Intangible Assets | 3 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment and Purchased Intangible Assets | Property and Equipment and Purchased Intangible Assets Property and equipment consisted of the following: October 31, 2023 July 31, 2023 (in thousands) Hosting equipment $ 307,479 $ 280,851 Capitalized internal-use software 133,023 120,877 Computers and equipment 7,516 7,107 Purchased software 1,311 1,311 Furniture and fixtures 1,028 1,025 Leasehold improvements 7,960 7,608 Total property and equipment, gross 458,317 418,779 Less: Accumulated depreciation and amortization (192,725) (176,424) Total property and equipment, net $ 265,592 $ 242,355 Purchased intangible assets consist of internet protocol (IP) addresses and source codes, which are amortized on a straight-line basis over an estimated useful life ranging from five years to 10 years. As of October 31, 2023, their historical cost and accumulated amortization were $10.1 million and $1.8 million, respectively. As of July 31, 2023, their historical cost and accumulated amortization were $8.6 million and $1.6 million, respectively. Purchased intangible assets are included within other noncurrent assets in the condensed consolidated balance sheets. We recognized depreciation and amortization expense on property and equipment and purchased intangible assets of $14.0 million and $11.9 million for the three months ended October 31, 2023 and 2022, respectively. Additionally, we recognized stock-based compensation expense on the amortization of capitalized stock-based compensation associated with capitalized internal-use software of $2.9 million and $1.7 million for the three months ended October 31, 2023 and 2022, respectively. |
Property and Equipment and Purchased Intangible Assets | Property and Equipment and Purchased Intangible Assets Property and equipment consisted of the following: October 31, 2023 July 31, 2023 (in thousands) Hosting equipment $ 307,479 $ 280,851 Capitalized internal-use software 133,023 120,877 Computers and equipment 7,516 7,107 Purchased software 1,311 1,311 Furniture and fixtures 1,028 1,025 Leasehold improvements 7,960 7,608 Total property and equipment, gross 458,317 418,779 Less: Accumulated depreciation and amortization (192,725) (176,424) Total property and equipment, net $ 265,592 $ 242,355 Purchased intangible assets consist of internet protocol (IP) addresses and source codes, which are amortized on a straight-line basis over an estimated useful life ranging from five years to 10 years. As of October 31, 2023, their historical cost and accumulated amortization were $10.1 million and $1.8 million, respectively. As of July 31, 2023, their historical cost and accumulated amortization were $8.6 million and $1.6 million, respectively. Purchased intangible assets are included within other noncurrent assets in the condensed consolidated balance sheets. We recognized depreciation and amortization expense on property and equipment and purchased intangible assets of $14.0 million and $11.9 million for the three months ended October 31, 2023 and 2022, respectively. Additionally, we recognized stock-based compensation expense on the amortization of capitalized stock-based compensation associated with capitalized internal-use software of $2.9 million and $1.7 million for the three months ended October 31, 2023 and 2022, respectively. |
Business Combinations
Business Combinations | 3 Months Ended |
Oct. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Securelyshare Software Private Ltd. On August 31, 2023, we completed the acquisition of Securelyshare Software Private Ltd. ("Securelyshare"), an early-stage technology company incorporated in India. We plan to integrate this company's technology into our cloud platform. Pursuant to the terms of the purchase agreement, the purchase price consideration was $5.3 million in cash, of which $0.8 million was held back as an indemnity holdback amount for eighteen months after the transaction closing date. The transaction was accounted for as a business combination. We recognized intangible assets of $2.8 million for developed technology and goodwill of $3.2 million. The developed technology is amortized over its economic useful life of five years. Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and is primarily attributable to the acquired workforce and expected operating synergies and is not expected to be deductible for Indian income tax purposes. The acquisition qualified as a stock transaction for tax purposes. As a result, we recognized a deferred tax liability of $0.7 million, generated primarily from the difference between the tax basis and fair value of the acquired developed technology, which increased goodwill by the same amount. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 3 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill Changes in the carrying amount of goodwill for the three months ended October 31, 2023 consisted of the following: Amount (in thousands) Balance as of July 31, 2023 $ 89,192 Goodwill acquired 3,223 Balance as of October 31, 2023 $ 92,415 Acquired Intangible Assets Acquired intangible assets consist of developed technology and customer relationships acquired through our business acquisitions and asset acquisitions. Acquired intangible assets are amortized using the straight-line method over their estimated useful lives. During the three months ended October 31, 2023, in connection with the acquisition of Securelyshare, we acquired developed technology with a fair value of $2.8 million with an estimated useful life of five years. For further information refer to Note 6, Business Combinations. Changes in acquired intangible assets for the three months ended October 31, 2023 consisted of the following: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful life July 31, 2023 Additions October 31, 2023 July 31, 2023 Amortization Expense October 31, 2023 July 31, 2023 October 31, 2023 October 31, 2023 (in thousands) (years) Developed technology $ 53,456 $ 2,800 $ 56,256 $ (29,259) $ (2,810) $ (32,069) $ 24,197 $ 24,187 3.1 Customer relationships 3,560 — 3,560 (1,898) (226) (2,124) 1,662 1,436 2.2 Total $ 57,016 $ 2,800 $ 59,816 $ (31,157) $ (3,036) $ (34,193) $ 25,859 $ 25,623 3.0 Amortization expense of acquired intangible assets for the three months ended October 31, 2023 and 2022 was $3.0 million and $2.6 million, respectively. Amortization expense of developed technology and customer relationships is included primarily within cost of revenue and sales and marketing expenses, respectively, in the condensed consolidated statements of operations. Future amortization expense of acquired intangible assets as of October 31, 2023 consists of the following: Amount Fiscal Year ending July 31, (in thousands) 2024 (remaining nine months) $ 8,797 2025 6,825 2026 5,812 2027 2,988 2028 1,155 Thereafter 46 Total $ 25,623 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Oct. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Foreign Currency Forward Contracts As a global business, we are exposed to foreign currency exchange rate risk. Substantially all of our revenue is transacted in U.S. dollars; however, a portion of our cost of revenue and operating expenditures are incurred outside of the United States and are denominated in foreign currencies, making them subject to fluctuations in foreign currency exchange rates. In order to mitigate the impact of foreign currency fluctuations on our future cash flows and earnings, we enter into foreign currency forward contracts, which we designate as cash flow hedges. All cash flow hedges were considered effective during the three months ended October 31, 2023 and 2022. We also use foreign currency forward contracts to mitigate variability in gains and losses generated from the remeasurement of certain monetary assets and liabilities denominated in foreign currencies. The outstanding non-designated derivative instruments are carried at fair value with the change in fair value recorded in other expense, net in the condensed consolidated statement of operations in the same period as the changes in fair value from the remeasurement of the underlying assets and liabilities. Cash flows from such derivatives are classified as operating activities. These foreign exchange contracts typically have maturities of approximately one As of October 31, 2023 and July 31, 2023, the total notional amount of our outstanding designated foreign currency forward contracts was $458.7 million and $457.6 million, respectively, and for our outstanding non-designated foreign currency forward contracts was $162.1 million and $182.9 million, respectively. The maximum length of time over which forecasted foreign currency denominated operating expenses are hedged is 21 months. As of October 31, 2023, an estimated $2.1 million of the unrealized gain related to our cash flow hedges are expected to be released into earnings over the next 12 months. Refer to Note 4, Fair Value Measurements, for the fair value of our derivative instruments as reported on the condensed consolidated balance sheet as of October 31, 2023 and July 31, 2023. During the three months ended October 31, 2023 and 2022, changes in the fair value of our non-designated derivative instruments recorded within other expense, net within the condensed consolidated statement of operations, were not material. The changes in accumulated other comprehensive income (loss) ("AOCI") related to our cash flow hedges consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Balance of AOCI as of July 31, 2023 $ 8,937 $ (13,744) Net unrealized losses recognized in accumulated other comprehensive income (15,136) (14,039) Losses (gains) reclassified from AOCI into the condensed consolidated statement of operations (1) (654) 4,713 Balance of AOCI as of October 31, 2023 $ (6,853) $ (23,070) (1) Losses (gains) related to our cash flow hedges reclassified from AOCI into the condensed consolidated statement of operations consisted of the following : Three Months Ended October 31, 2023 2022 (in thousands) Cost of revenue $ (176) $ 708 Sales and marketing (295) 3,297 Research and development (92) 464 General and administrative (91) 244 Total $ (654) $ 4,713 Our derivative contracts expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the underlying contracts. We mitigate this credit risk by transacting with major financial institutions with high credit ratings and standards. We periodically assess the creditworthiness of our counterparties to ensure they continue to meet our credit quality requirements. We also enter into master netting arrangements, which permit net settlement of transactions with the same counterparty. The potential impact of these rights of set-off associated with our derivative instruments was not material as of October 31, 2023 and July 31, 2023. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments. We do not enter into derivative contracts for trading or speculative purposes. Interest Rate Swap Contracts During the three months ended April 30, 2023, we entered into interest rate swaps contracts, maturing on July 1, 2025, designated as fair value hedges intended to hedge a portion of our fair value risk exposure due to changing interest rates by economically converting the fixed interest rate of a certain tranche of our convertible senior notes to a floating interest rate. As of October 31, 2023, the carrying amount of the hedged convertible senior notes was $495.9 million and the total notional amount of our outstanding interest rate swaps was $500.0 million. The gains and losses related to changes in the fair value of the interest rate swaps are included within interest expense in the condensed consolidated statement of operations and substantially offset changes in the fair value of the hedged portion of the underlying convertible senior notes that are attributable to the changes in underlying benchmark interest rates. As of October 31, 2023 and July 31, 2023, the cumulative amount of fair value hedge accounting adjustments included in the carrying amount of hedged liabilities was $9.4 million and $8.3 million, respectively. The effect of derivative instruments designated as fair value hedges included within interest expense in the condensed statement of operations for the three months ended October 31, 2023 consisted of the following: Gains (Losses) (in thousands) Interest rate swaps: Hedged items $ (1,110) Derivatives designated as hedging instruments 1,094 Total $ (16) |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes On June 25, 2020, we issued $1,150.0 million in aggregate principal amount of 0.125% convertible senior notes due 2025 (the “Notes”), including the exercise in full by the initial purchasers of the Notes of their option to purchase an additional $150.0 million principal amount of the Notes. The Notes are unsecured obligations and bear interest at a rate of 0.125% per year and interest is payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes mature on July 1, 2025, unless earlier converted, redeemed or repurchased. The total net proceeds from the offering, after deducting initial purchase discounts and other debt issuance costs, was $1,130.5 million. Refer to Note 9, Convertible Senior Notes, to the audited consolidated financial statements included in our Fiscal 2023 Form 10-K for further information on the Notes. During the three months ended October 31, 2023, the conditions allowing holders of the Notes to convert were not met. During the three months ended April 30, 2023, we entered into interest rate swap contracts designated as fair value hedges of certain of our Notes. For further information refer to Note 8, Derivative Instruments. The net carrying amount of the liability component of the Notes consisted of the following: October 31, July 31, 2023 2023 (in thousands) Principal amount $ 1,149,993 $ 1,149,993 Less: Unamortized debt issuance costs 6,551 7,528 Hedge accounting fair value adjustments 9,416 8,306 Total $ 1,134,026 $ 1,134,159 The interest expense related to the Notes consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Contractual interest expense $ 359 $ 359 Amortization of debt issuance costs 977 972 Total $ 1,336 $ 1,331 The total fair value of the Notes was $1,404.3 million and $1,411.4 million as of October 31, 2023 and July 31, 2023, respectively. The fair value was determined based on the closing trading price per $1,000 of the Notes as of the last day of trading for the period. We consider the fair value of the Notes as of October 31, 2023 to be a Level II measurement as they are not actively traded. The fair value of the Notes is primarily affected by the trading price of our common stock and market interest rates. In connection with the pricing of the Notes, we entered into capped call transactions with the option counterparties (the "Capped Calls"). The Capped Calls each have an initial strike price of $150.80 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $246.76 per share, subject to certain adjustments. The Capped Calls are generally expected to reduce potential dilution to our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap. During the three months ended October 31, 2023 and 2022 , we have not exercised any Capped Call options. Refer to Note 9, Convertible Senior Notes, to the audited consolidated financial statements included in our Fiscal 2023 Form 10-K for further information on the Capped Calls. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Non-cancelable Purchase Obligations In the normal course of business, we enter into non-cancelable purchase commitments with various third parties to purchase products and services such as technology equipment, subscription-based cloud service arrangements, corporate and marketing events and consulting services. During the three months ended October 31, 2023, there have been no material changes outside the ordinary course of business to our non-cancelable purchase commitments from those disclosed in our Fiscal 2023 Form 10-K. Other Commitments As of October 31, 2023 and July 31, 2023, we had outstanding irrevocable standby unsecured letters of credits and guarantees for an aggregate value of $2.8 million and $2.1 million, respectively with a bank, which serve as security under certain real estate leases. Legal Matters We are a party to various litigation matters from time to time and subject to claims that arise in the ordinary course of business, including patent, commercial, product liability, employment, class action, whistleblower and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. There is no pending or threatened legal proceeding to which we are a party that, in our opinion, is likely to have a material adverse effect on our future financial results or operations; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. The expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change and could adversely affect our results of operations. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plan Equity incentive awards which may be granted to eligible participants under our Fiscal Year 2018 Equity Incentive Plan (the "Plan") include restricted stock units, restricted stock, stock options, nonstatutory stock options, stock appreciation rights, performance units and performance shares. Stock Options The activity of stock options for the three months ended October 31, 2023 consisted of the following: Outstanding Weighted-Average Weighted-Average Aggregate (in thousands, except per share amounts) Balance as of July 31, 2023 1,267 $18.54 2.1 $ 179,678 Granted — — — — Exercised (151) $8.30 — $ 23,248 Canceled, forfeited or expired — — — — Balance as of October 31, 2023 1,116 $19.93 2.1 $ 154,781 Exercisable and expected to vest as of July 31, 2023 1,210 $12.82 1.8 $ 178,616 Exercisable and expected to vest as of October 31, 2023 1,065 $13.68 1.6 $ 154,496 The aggregate intrinsic value of the options exercised represents the difference between the fair value of our common stock on the date of exercise and their exercise price. The total intrinsic value of options exercised for the three months ended October 31, 2023 and 2022 was $23.2 million and $18.3 million, respectively. There were no stock options granted during the periods presented. Restricted Stock Units and Performance Stock Awards The activity of restricted stock units ("RSUs") and performance stock awards ("PSAs") consisted of the following for the three months ended October 31, 2023: Underlying Shares Weighted-Average Grant Date Fair Value Aggregate (in thousands, except per share data) Balance as of July 31, 2023 9,351 $139.95 $ 1,499,714 Granted 2,259 $160.89 Vested (993) $131.96 $ 154,937 Canceled or forfeited (376) $155.43 Balance as of October 31, 2023 10,241 $144.80 $ 1,625,139 As of October 31, 2023, the number of outstanding PSAs for which the performance metrics have not been defined as of such date was not material. These awards are not considered granted for accounting purposes as of October 31, 2023 and accordingly, have been excluded from the above table. Employee Stock Purchase Plan In fiscal 2018, we adopted the Fiscal Year 2018 Employee Stock Purchase Plan (the "ESPP"). ESPP employee payroll contributions accrued as of October 31, 2023 and July 31, 2023, were $18.6 million and $7.4 million, respectively, and are included within accrued compensation in the condensed consolidated balance sheets. Payroll contributions accrued as of October 31, 2023 will be used to purchase shares at the end of the current ESPP purchase period ending on December 15, 2023. Payroll contributions ultimately used to purchase shares are reclassified to stockholders’ equity on the purchase date. There were no shares issued under ESPP during the periods presented. Departure of the President of the Company In October 2022, our President, who led research and development activities, resigned from his position as President of the Company, but continues to serve as a member of our Board of Directors. In connection with his resignation as President of the Company, we recognized a reversal of stock-based compensation expense of $9.9 million associated with the cancellation of unvested incentive equity awards which was recognized in research and development expenses in the condensed consolidated statement of operations for the three months ended October 31, 2022. Stock-based Compensation Expense The components of stock-based compensation expense recognized in the condensed consolidated statements of operations consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Cost of revenue $ 12,584 $ 8,432 Sales and marketing 56,630 53,635 Research and development 40,193 24,531 General and administrative 19,731 18,575 Total $ 129,138 $ 105,173 |
Income Taxes
Income Taxes | 3 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, we update our estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period. Our quarterly tax provision, and estimate of our annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how we do business, and tax law developments. Our estimated annual effective tax rate for the year differs from the U.S. statutory rate of 21% as a result of our U.S. losses for which no benefit will be realized, as well as our foreign operations which are subject to tax rates that differ from those in the United States. We recorded provision for income taxes of $9.0 million a nd $4.7 million for the three months ended October 31, 2023 and 2022, respectively. The increase for the three months ended October 31, 2023 is primarily related to tax expense associated with the integration of a business acquisition. We are subject to income tax in the United States as well as other tax jurisdictions in which we conduct business. Earnings from our non-U.S. operations are subject to income taxes in the countries in which we operate. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. We assess our ability to realize the deferred tax assets on a quarterly basis and we establish a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. We weigh all available positive and negative evidence, including our earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies. Due to the weight of objectively verifiable negative evidence, including our history of losses in certain jurisdictions, we believe that it is more likely than not that our U.S. federal, state, and the United Kingdom ("U.K.") deferred tax assets will not be realized. Accordingly, we have maintained a valuation allowance on our U.S. federal, state and U.K. deferred tax assets. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The computation of basic and diluted net loss per share consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Net loss $ (33,483) $ (68,162) Weighted-average shares used in computing net loss per share, basic and diluted 147,625 143,476 Net loss per share, basic and diluted $ (0.23) $ (0.48) Since we have reported net losses for all periods presented, we have excluded all potentially dilutive securities from the calculation of the diluted net loss per share as their effect is antidilutive and accordingly, the basic and diluted net loss per share is the same for all periods presented. We calculated the potential dilutive effect of the Notes under the if-converted method. Under this method, diluted earnings per share are determined by assuming that all of the Notes were converted into shares of our common stock at the beginning of the reporting period. In connection with the issuance of the Notes, we entered into Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive. The Capped Calls are expected to partially offset the potential dilution to our common stock upon any conversion of the Notes. We have not exercised any of the Capped Calls as of October 31, 2023. The outstanding potentially dilutive securities that were excluded from the computation of diluted net loss per share as their effect would be antidilutive consisted of the following: October 31, 2023 2022 (in thousands) Unvested RSUs and shares of common stock 9,467 6,870 Stock options 1,116 1,564 Unvested PSAs (1) 867 755 Share purchase rights under the ESPP 1,065 812 Notes (2) 7,626 7,626 Total 20,141 17,627 (1) The number of unvested PSAs is estimated at 100% of the target number of shares granted and excludes unvested PSAs for which performance conditions have not been established as of October 31, 2023 and 2022, as they are not considered outstanding for accounting purposes. For further information refer to Note 11, Stock-Based Compensation. (2) The shares underlying the conversion option in the Notes were not considered in the calculation of diluted net loss per share as the effect would have been antidilutive. Based on the initial conversion price, the entire outstanding principal amount of the Notes as of October 31, 2023 would have been convertible into approximately 7.6 million shares of our common stock, which is reflected in the above table. Conversion notices received through October 31, 2023, have not been material. In connection with the issuance of the Notes, we entered into Capped Calls, which have not been included in the computation of the number of diluted shares outstanding, as their effect would be antidilutive. The Capped Calls are expected to partially offset the potential dilution to our common stock upon any conversion of the Notes. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) Attributable to Parent | $ (33,483) | $ (68,162) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Oct. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Oct. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") and applicable regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting, and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company's audited consolidated financial statements and related notes in its Annual Report on Form 10-K for the fiscal year ended July 31, 2023 (the "Fiscal 2023 Form 10-K"), as filed with the SEC on September 14, 2023. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, the determination of revenue recognition, deferred revenue, deferred contract acquisition costs, capitalized internal-use software, valuation of acquired intangible assets, period of benefit generated from our deferred contract acquisition costs, allowance for doubtful accounts, valuation of common stock options and stock-based awards, useful lives of property and equipment, useful lives of acquired intangible assets, recoverability of goodwill, valuation of deferred tax assets and liabilities, loss contingencies related to litigation, fair value of convertible senior notes and the discount rate used for operating leases. Management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ significantly from these estimates, and such differences may be material to the condensed consolidated financial statements. Due to uncertainty in the macroeconomic environment, including but not limited to the effects of inflation, and geopolitical events, there is ongoing disruption in the global economy and financial markets. We are not aware of any specific event or circumstances that would require an update to our estimates, judgments or assumptions or a revision to the carrying value of our assets or liabilities as of the date of issuance of these condensed consolidated financial statements. These estimates, judgments and assumptions may change in the future, as new events occur or additional information is obtained . In August 2023, we completed an assessment of the useful lives of our servers and networking equipment, which resulted in an extension of their useful lives from four five |
Fiscal Year | Fiscal Year Our fiscal year ends on July 31. References to fiscal 2024, for example, refer to our fiscal year ending July 31, 2024. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our cloud platform: Three Months Ended October 31, 2023 2022 Amount % Revenue Amount % Revenue (in thousands, except for percentage data) United States $ 247,531 50 % $ 175,515 49 % Europe, Middle East and Africa 157,245 32 % 116,993 33 % Asia Pacific 75,080 15 % 52,270 15 % Other 16,847 3 % 10,770 3 % Total $ 496,703 100 % $ 355,548 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended October 31, 2023 2022 Amount % Revenue Amount % Revenue (in thousands, except for percentage data) Channel partners $ 454,456 91 % $ 329,357 93 % Direct customers 42,247 9 % 26,191 7 % Total $ 496,703 100 % $ 355,548 100 % |
Schedule of Accounts Receivable | The following table summarizes the concentration of 10% or more of the total balance of accounts receivable, net: October 31, 2023 July 31, 2023 Channel partner A 10% * (*) Represents less than 10%. |
Schedule of Capitalized Contract Cost | The activity of the deferred contract acquisition costs consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Beginning balance $ 375,234 $ 297,002 Capitalization of contract acquisition costs 27,680 26,795 Amortization of deferred contract acquisition costs (30,111) (22,325) Ending balance $ 372,803 $ 301,472 The outstanding balance of the deferred contract acquisition costs consisted of the following: October 31, 2023 July 31, 2023 (in thousands) Deferred contract acquisition costs, current $ 119,417 $ 115,827 Deferred contract acquisition costs, noncurrent 253,386 259,407 Total deferred contract acquisition costs $ 372,803 $ 375,234 |
Cash Equivalents and Short-Te_2
Cash Equivalents and Short-Term Investments (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash Equivalents and Short-Term Investments | Cash equivalents and short-term investments consisted of the following as of October 31, 2023: Amortized Unrealized Unrealized Fair Value Cash equivalents: (in thousands) Money market funds $ 899,921 $ — $ — $ 899,921 U.S. treasury securities 190,281 — (14) 190,267 U.S. government agency securities 110,554 — (15) 110,539 Corporate debt securities 22,665 — — 22,665 Total cash equivalents $ 1,223,421 $ — $ (29) $ 1,223,392 Short-term investments: U.S. treasury securities $ 184,061 $ — $ (2,717) $ 181,344 U.S. government agency securities 296,931 — (2,965) 293,966 Corporate debt securities 492,648 2 (5,279) 487,371 Total short-term investments $ 973,640 $ 2 $ (10,961) $ 962,681 Total cash equivalents and short-term investments $ 2,197,061 $ 2 $ (10,990) $ 2,186,073 Cash equivalents and short-term investments consisted of the following as of July 31, 2023: Amortized Unrealized Unrealized Fair Value Cash equivalents: (in thousands) Money market funds $ 768,003 $ — $ — $ 768,003 U.S. treasury securities 157,250 — (30) 157,220 U.S. government agency securities 166,671 — (35) 166,636 Corporate debt securities 38,800 — — 38,800 Total cash equivalents $ 1,130,724 $ — $ (65) $ 1,130,659 Short-term investments: U.S. treasury securities $ 175,451 $ — $ (1,875) $ 173,576 U.S. government agency securities 266,392 2 (4,299) 262,095 Corporate debt securities 406,517 49 (4,211) 402,355 Total short-term investments $ 848,360 $ 51 $ (10,385) $ 838,026 Total cash equivalents and short-term investments $ 1,979,084 $ 51 $ (10,450) $ 1,968,685 |
Schedule of Maturities | The amortized cost and fair value of our short-term investments based on their stated maturities consisted of the following as of October 31, 2023: Amortized Fair Value (in thousands) Due within one year $ 535,738 $ 532,490 Due between one to three years 437,902 430,191 Total $ 973,640 $ 962,681 |
Schedule of Unrealized Loss on Investments | Short-term investments that were in an unrealized loss position as of October 31, 2023 consisted of the following: Less than 12 Months Greater than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (in thousands) U.S. treasury securities $ 181,343 $ (2,717) $ — $ — $ 181,343 $ (2,717) U.S. government agency securities 193,452 (455) 100,514 (2,510) 293,966 (2,965) Corporate debt securities 314,180 (3,760) 64,495 (1,519) 378,675 (5,279) Total $ 688,975 $ (6,932) $ 165,009 $ (4,029) $ 853,984 $ (10,961) Short-term investments that were in an unrealized loss position as of July 31, 2023 consisted of the following: Less than 12 Months Greater than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (in thousands) U.S. treasury securities $ 173,576 $ (1,875) $ — $ — $ 173,576 $ (1,875) U.S. government agency securities 119,558 (292) 131,530 (4,007) 251,088 (4,299) Corporate debt securities 232,504 (2,034) 82,599 (2,177) 315,103 (4,211) Total $ 525,638 $ (4,201) $ 214,129 $ (6,184) $ 739,767 $ (10,385) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets Measured on Recurring Basis | Assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of October 31, 2023, consisted of the following: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 899,921 $ 899,921 $ — $ — U.S. treasury securities 190,267 — 190,267 — U.S. government agency securities 110,539 — 110,539 — Corporate debt securities 22,665 — 22,665 — Total cash equivalents $ 1,223,392 $ 899,921 $ 323,471 $ — Short-term investments: U.S. treasury securities $ 181,344 $ — $ 181,344 $ — U.S. government agency securities 293,966 — 293,966 — Corporate debt securities 487,371 — 487,371 — Total short-term investments $ 962,681 $ — $ 962,681 $ — Total cash equivalents and short-term investments $ 2,186,073 $ 899,921 $ 1,286,152 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 4,740 $ — $ 4,740 $ — Foreign currency contracts assets-noncurrent (2) $ 137 $ — $ 137 $ — Foreign currency contracts liabilities-current (3) $ 5,978 $ — $ 5,978 $ — Foreign currency contracts liabilities-noncurrent (4) $ 2,286 $ — $ 2,286 $ — Interest rate contracts liabilities-current (3) $ 5,334 $ — $ 5,334 $ — Interest rate contracts liabilities-noncurrent (4) $ 3,787 $ — $ 3,787 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 914 $ — $ 914 $ — Foreign currency contracts liabilities-current (3) $ 860 $ — $ 860 $ — (1) Included within prepaid expenses and other current assets in the condensed consolidated balance sheets. (2) Included within other noncurrent assets in the condensed consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the condensed consolidated balance sheets. (4) Included within other noncurrent liabilities in the condensed consolidated balance sheets. Assets that are measured at fair value on a recurring basis consisted of the following as of July 31, 2023: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 768,003 $ 768,003 $ — $ — U.S. treasury securities 157,220 — 157,220 — U.S. government agency securities 166,636 — 166,636 — Corporate debt securities 38,800 — 38,800 — Total cash equivalents $ 1,130,659 $ 768,003 $ 362,656 $ — Short-term investments: U.S. treasury securities $ 173,576 $ — $ 173,576 $ — U.S. government agency securities 262,095 — 262,095 — Corporate debt securities 402,355 — 402,355 — Total short-term investments $ 838,026 $ — $ 838,026 $ — Total cash equivalents and short-term investments $ 1,968,685 $ 768,003 $ 1,200,682 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 12,581 $ — $ 12,581 $ — Foreign currency contract assets-noncurrent (2) $ 2,264 $ — $ 2,264 $ — Foreign currency contracts liabilities-current (3) $ 1,452 $ — $ 1,452 $ — Foreign currency contracts liabilities-noncurrent (4) $ 669 $ — $ 669 $ — Interest rate contracts liabilities-current (3) $ 6,439 $ — $ 6,439 $ — Interest rate contracts liabilities-noncurrent (4) $ 1,588 $ — $ 1,588 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 2,061 $ — $ 2,061 $ — Foreign currency contracts liabilities-current (3) $ 465 $ — $ 465 $ — (1) Included within prepaid expenses and other current assets in the consolidated balance sheets. (2) Included within other noncurrent assets in the consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the consolidated balance sheets. (4) Included within other noncurrent liabilities in the consolidated balance sheets. |
Schedule of Fair Value, Liabilities Measured on Recurring Basis | Assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of October 31, 2023, consisted of the following: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 899,921 $ 899,921 $ — $ — U.S. treasury securities 190,267 — 190,267 — U.S. government agency securities 110,539 — 110,539 — Corporate debt securities 22,665 — 22,665 — Total cash equivalents $ 1,223,392 $ 899,921 $ 323,471 $ — Short-term investments: U.S. treasury securities $ 181,344 $ — $ 181,344 $ — U.S. government agency securities 293,966 — 293,966 — Corporate debt securities 487,371 — 487,371 — Total short-term investments $ 962,681 $ — $ 962,681 $ — Total cash equivalents and short-term investments $ 2,186,073 $ 899,921 $ 1,286,152 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 4,740 $ — $ 4,740 $ — Foreign currency contracts assets-noncurrent (2) $ 137 $ — $ 137 $ — Foreign currency contracts liabilities-current (3) $ 5,978 $ — $ 5,978 $ — Foreign currency contracts liabilities-noncurrent (4) $ 2,286 $ — $ 2,286 $ — Interest rate contracts liabilities-current (3) $ 5,334 $ — $ 5,334 $ — Interest rate contracts liabilities-noncurrent (4) $ 3,787 $ — $ 3,787 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 914 $ — $ 914 $ — Foreign currency contracts liabilities-current (3) $ 860 $ — $ 860 $ — (1) Included within prepaid expenses and other current assets in the condensed consolidated balance sheets. (2) Included within other noncurrent assets in the condensed consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the condensed consolidated balance sheets. (4) Included within other noncurrent liabilities in the condensed consolidated balance sheets. Assets that are measured at fair value on a recurring basis consisted of the following as of July 31, 2023: Level I Level II Level III Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Cash equivalents: (in thousands) Money market funds $ 768,003 $ 768,003 $ — $ — U.S. treasury securities 157,220 — 157,220 — U.S. government agency securities 166,636 — 166,636 — Corporate debt securities 38,800 — 38,800 — Total cash equivalents $ 1,130,659 $ 768,003 $ 362,656 $ — Short-term investments: U.S. treasury securities $ 173,576 $ — $ 173,576 $ — U.S. government agency securities 262,095 — 262,095 — Corporate debt securities 402,355 — 402,355 — Total short-term investments $ 838,026 $ — $ 838,026 $ — Total cash equivalents and short-term investments $ 1,968,685 $ 768,003 $ 1,200,682 $ — Designated derivative instruments: Foreign currency contracts assets-current (1) $ 12,581 $ — $ 12,581 $ — Foreign currency contract assets-noncurrent (2) $ 2,264 $ — $ 2,264 $ — Foreign currency contracts liabilities-current (3) $ 1,452 $ — $ 1,452 $ — Foreign currency contracts liabilities-noncurrent (4) $ 669 $ — $ 669 $ — Interest rate contracts liabilities-current (3) $ 6,439 $ — $ 6,439 $ — Interest rate contracts liabilities-noncurrent (4) $ 1,588 $ — $ 1,588 $ — Non-designated derivative instruments: Foreign currency contracts assets-current (1) $ 2,061 $ — $ 2,061 $ — Foreign currency contracts liabilities-current (3) $ 465 $ — $ 465 $ — (1) Included within prepaid expenses and other current assets in the consolidated balance sheets. (2) Included within other noncurrent assets in the consolidated balance sheets. (3) Included within accrued expenses and other current liabilities in the consolidated balance sheets. (4) Included within other noncurrent liabilities in the consolidated balance sheets. |
Property and Equipment and Pu_2
Property and Equipment and Purchased Intangible Assets (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: October 31, 2023 July 31, 2023 (in thousands) Hosting equipment $ 307,479 $ 280,851 Capitalized internal-use software 133,023 120,877 Computers and equipment 7,516 7,107 Purchased software 1,311 1,311 Furniture and fixtures 1,028 1,025 Leasehold improvements 7,960 7,608 Total property and equipment, gross 458,317 418,779 Less: Accumulated depreciation and amortization (192,725) (176,424) Total property and equipment, net $ 265,592 $ 242,355 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the three months ended October 31, 2023 consisted of the following: Amount (in thousands) Balance as of July 31, 2023 $ 89,192 Goodwill acquired 3,223 Balance as of October 31, 2023 $ 92,415 |
Schedule of Acquired Intangible Assets | Changes in acquired intangible assets for the three months ended October 31, 2023 consisted of the following: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful life July 31, 2023 Additions October 31, 2023 July 31, 2023 Amortization Expense October 31, 2023 July 31, 2023 October 31, 2023 October 31, 2023 (in thousands) (years) Developed technology $ 53,456 $ 2,800 $ 56,256 $ (29,259) $ (2,810) $ (32,069) $ 24,197 $ 24,187 3.1 Customer relationships 3,560 — 3,560 (1,898) (226) (2,124) 1,662 1,436 2.2 Total $ 57,016 $ 2,800 $ 59,816 $ (31,157) $ (3,036) $ (34,193) $ 25,859 $ 25,623 3.0 |
Schedule of Future Amortization Expense | Future amortization expense of acquired intangible assets as of October 31, 2023 consists of the following: Amount Fiscal Year ending July 31, (in thousands) 2024 (remaining nine months) $ 8,797 2025 6,825 2026 5,812 2027 2,988 2028 1,155 Thereafter 46 Total $ 25,623 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Changes of AOCI Related to our Cash Flow Hedges and Cash Flow Hedges on our Consolidated Statement of Operations | The changes in accumulated other comprehensive income (loss) ("AOCI") related to our cash flow hedges consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Balance of AOCI as of July 31, 2023 $ 8,937 $ (13,744) Net unrealized losses recognized in accumulated other comprehensive income (15,136) (14,039) Losses (gains) reclassified from AOCI into the condensed consolidated statement of operations (1) (654) 4,713 Balance of AOCI as of October 31, 2023 $ (6,853) $ (23,070) (1) Losses (gains) related to our cash flow hedges reclassified from AOCI into the condensed consolidated statement of operations consisted of the following : Three Months Ended October 31, 2023 2022 (in thousands) Cost of revenue $ (176) $ 708 Sales and marketing (295) 3,297 Research and development (92) 464 General and administrative (91) 244 Total $ (654) $ 4,713 |
Schedule of Derivative Instruments Designated as Fair Value Hedges | The effect of derivative instruments designated as fair value hedges included within interest expense in the condensed statement of operations for the three months ended October 31, 2023 consisted of the following: Gains (Losses) (in thousands) Interest rate swaps: Hedged items $ (1,110) Derivatives designated as hedging instruments 1,094 Total $ (16) |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The net carrying amount of the liability component of the Notes consisted of the following: October 31, July 31, 2023 2023 (in thousands) Principal amount $ 1,149,993 $ 1,149,993 Less: Unamortized debt issuance costs 6,551 7,528 Hedge accounting fair value adjustments 9,416 8,306 Total $ 1,134,026 $ 1,134,159 The interest expense related to the Notes consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Contractual interest expense $ 359 $ 359 Amortization of debt issuance costs 977 972 Total $ 1,336 $ 1,331 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options | The activity of stock options for the three months ended October 31, 2023 consisted of the following: Outstanding Weighted-Average Weighted-Average Aggregate (in thousands, except per share amounts) Balance as of July 31, 2023 1,267 $18.54 2.1 $ 179,678 Granted — — — — Exercised (151) $8.30 — $ 23,248 Canceled, forfeited or expired — — — — Balance as of October 31, 2023 1,116 $19.93 2.1 $ 154,781 Exercisable and expected to vest as of July 31, 2023 1,210 $12.82 1.8 $ 178,616 Exercisable and expected to vest as of October 31, 2023 1,065 $13.68 1.6 $ 154,496 |
Schedule of Restricted Stock Units and Performance Stock Awards Activity | The activity of restricted stock units ("RSUs") and performance stock awards ("PSAs") consisted of the following for the three months ended October 31, 2023: Underlying Shares Weighted-Average Grant Date Fair Value Aggregate (in thousands, except per share data) Balance as of July 31, 2023 9,351 $139.95 $ 1,499,714 Granted 2,259 $160.89 Vested (993) $131.96 $ 154,937 Canceled or forfeited (376) $155.43 Balance as of October 31, 2023 10,241 $144.80 $ 1,625,139 |
Schedule of Allocation of Stock-based Compensation Expense | The components of stock-based compensation expense recognized in the condensed consolidated statements of operations consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Cost of revenue $ 12,584 $ 8,432 Sales and marketing 56,630 53,635 Research and development 40,193 24,531 General and administrative 19,731 18,575 Total $ 129,138 $ 105,173 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The computation of basic and diluted net loss per share consisted of the following: Three Months Ended October 31, 2023 2022 (in thousands) Net loss $ (33,483) $ (68,162) Weighted-average shares used in computing net loss per share, basic and diluted 147,625 143,476 Net loss per share, basic and diluted $ (0.23) $ (0.48) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The outstanding potentially dilutive securities that were excluded from the computation of diluted net loss per share as their effect would be antidilutive consisted of the following: October 31, 2023 2022 (in thousands) Unvested RSUs and shares of common stock 9,467 6,870 Stock options 1,116 1,564 Unvested PSAs (1) 867 755 Share purchase rights under the ESPP 1,065 812 Notes (2) 7,626 7,626 Total 20,141 17,627 (1) The number of unvested PSAs is estimated at 100% of the target number of shares granted and excludes unvested PSAs for which performance conditions have not been established as of October 31, 2023 and 2022, as they are not considered outstanding for accounting purposes. For further information refer to Note 11, Stock-Based Compensation. (2) The shares underlying the conversion option in the Notes were not considered in the calculation of diluted net loss per share as the effect would have been antidilutive. Based on the initial conversion price, the entire outstanding principal amount of the Notes as of October 31, 2023 would have been convertible into approximately 7.6 million shares of our common stock, which is reflected in the above table. Conversion notices received through October 31, 2023, have not been material. In connection with the issuance of the Notes, we entered into Capped Calls, which have not been included in the computation of the number of diluted shares outstanding, as their effect would be antidilutive. The Capped Calls are expected to partially offset the potential dilution to our common stock upon any conversion of the Notes. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Details) - Servers and Networking Equipment - USD ($) $ in Millions | 3 Months Ended | |
Oct. 31, 2023 | Jul. 31, 2023 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Useful life | 5 years | 4 years |
Long Lived Tangible Assets Amortization Period | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Decreased depreciation expense | $ 3.1 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Concentration Risk [Line Items] | |||
Deferred revenue | $ 1,399.5 | $ 1,439.7 | |
Contract with customer, liability, revenue recognized | 462.9 | $ 329.3 | |
Revenue, remaining performance obligation | 3,487.4 | ||
Accrued sales commissions | $ 18.2 | $ 48 | |
Minimum | |||
Concentration Risk [Line Items] | |||
Contract with customer, term of contract | 1 year | ||
Maximum | |||
Concentration Risk [Line Items] | |||
Contract with customer, term of contract | 3 years | ||
Transferred Over Time | Product Concentration Risk | Subscription and Support | Revenue Benchmark | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 97% | 97% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 496,703 | $ 355,548 |
Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 496,703 | $ 355,548 |
Revenue percentage | 100% | 100% |
Revenue Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 496,703 | $ 355,548 |
Revenue percentage | 100% | 100% |
Revenue Benchmark | Customer Concentration Risk | Channel partners | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 454,456 | $ 329,357 |
Revenue percentage | 91% | 93% |
Revenue Benchmark | Customer Concentration Risk | Direct customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 42,247 | $ 26,191 |
Revenue percentage | 9% | 7% |
United States | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 247,531 | $ 175,515 |
Revenue percentage | 50% | 49% |
Europe, Middle East and Africa | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 157,245 | $ 116,993 |
Revenue percentage | 32% | 33% |
Asia Pacific | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 75,080 | $ 52,270 |
Revenue percentage | 15% | 15% |
Other | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 16,847 | $ 10,770 |
Revenue percentage | 3% | 3% |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable (Details) | 3 Months Ended |
Oct. 31, 2023 | |
Customer Concentration Risk | Channel partner A | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 10% |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation (Details) | Oct. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-11-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 51% |
Recognized transaction price period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-11-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 95% |
Recognized transaction price period | 3 years |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Changes in Capitalized Contract Cost [Roll Forward] | |||
Beginning balance | $ 375,234 | $ 297,002 | |
Capitalization of contract acquisition costs | 27,680 | 26,795 | |
Amortization of deferred contract acquisition costs | (30,111) | (22,325) | |
Ending balance | 372,803 | 301,472 | |
Deferred contract acquisition costs, current | 119,417 | $ 115,827 | |
Deferred contract acquisition costs, noncurrent | 253,386 | 259,407 | |
Total deferred contract acquisition costs | $ 372,803 | $ 301,472 | $ 375,234 |
Cash Equivalents and Short-Te_3
Cash Equivalents and Short-Term Investments - Schedule of Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Cash equivalents: | ||
Amortized Cost | $ 1,223,421 | $ 1,130,724 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (29) | (65) |
Fair Value | 1,223,392 | 1,130,659 |
Short-term investments: | ||
Amortized Cost | 973,640 | 848,360 |
Unrealized Gains | 2 | 51 |
Unrealized Losses | (10,961) | (10,385) |
Fair Value | 962,681 | 838,026 |
Total cash equivalents and short-term investments, amortized cost | 2,197,061 | 1,979,084 |
Total cash equivalents and short-term investments, unrealized gains | 2 | 51 |
Total cash equivalents and short-term investments, unrealized losses | (10,990) | (10,450) |
Total cash equivalents and short-term investments | 2,186,073 | 1,968,685 |
U.S. treasury securities | ||
Short-term investments: | ||
Amortized Cost | 184,061 | 175,451 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (2,717) | (1,875) |
Fair Value | 181,344 | 173,576 |
U.S. government agency securities | ||
Short-term investments: | ||
Amortized Cost | 296,931 | 266,392 |
Unrealized Gains | 0 | 2 |
Unrealized Losses | (2,965) | (4,299) |
Fair Value | 293,966 | 262,095 |
Corporate debt securities | ||
Short-term investments: | ||
Amortized Cost | 492,648 | 406,517 |
Unrealized Gains | 2 | 49 |
Unrealized Losses | (5,279) | (4,211) |
Fair Value | 487,371 | 402,355 |
Money market funds | ||
Cash equivalents: | ||
Amortized Cost | 899,921 | 768,003 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 899,921 | 768,003 |
U.S. treasury securities | ||
Cash equivalents: | ||
Amortized Cost | 190,281 | 157,250 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (14) | (30) |
Fair Value | 190,267 | 157,220 |
U.S. government agency securities | ||
Cash equivalents: | ||
Amortized Cost | 110,554 | 166,671 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (15) | (35) |
Fair Value | 110,539 | 166,636 |
Corporate debt securities | ||
Cash equivalents: | ||
Amortized Cost | 22,665 | 38,800 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 22,665 | $ 38,800 |
Cash Equivalents and Short-Te_4
Cash Equivalents and Short-Term Investments - Schedule of Maturities (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Amortized Cost | ||
Due within one year | $ 535,738 | |
Due between one to three years | 437,902 | |
Amortized Cost | 973,640 | $ 848,360 |
Fair Value | ||
Due within one year | 532,490 | |
Due between one to three years | 430,191 | |
Fair Value | $ 962,681 | $ 838,026 |
Cash Equivalents and Short-Te_5
Cash Equivalents and Short-Term Investments - Schedule of Unrealized Position (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, fair value | $ 688,975 | $ 525,638 |
Less than 12 months, unrealized losses | (6,932) | (4,201) |
Greater than 12 months, fair value | 165,009 | 214,129 |
Greater than 12 months, unrealized losses | (4,029) | (6,184) |
Total fair value | 853,984 | 739,767 |
Total unrealized losses | (10,961) | (10,385) |
U.S. treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, fair value | 181,343 | 173,576 |
Less than 12 months, unrealized losses | (2,717) | (1,875) |
Greater than 12 months, fair value | 0 | 0 |
Greater than 12 months, unrealized losses | 0 | 0 |
Total fair value | 181,343 | 173,576 |
Total unrealized losses | (2,717) | (1,875) |
U.S. government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, fair value | 193,452 | 119,558 |
Less than 12 months, unrealized losses | (455) | (292) |
Greater than 12 months, fair value | 100,514 | 131,530 |
Greater than 12 months, unrealized losses | (2,510) | (4,007) |
Total fair value | 293,966 | 251,088 |
Total unrealized losses | (2,965) | (4,299) |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, fair value | 314,180 | 232,504 |
Less than 12 months, unrealized losses | (3,760) | (2,034) |
Greater than 12 months, fair value | 64,495 | 82,599 |
Greater than 12 months, unrealized losses | (1,519) | (2,177) |
Total fair value | 378,675 | 315,103 |
Total unrealized losses | $ (5,279) | $ (4,211) |
Cash Equivalents and Short-Te_6
Cash Equivalents and Short-Term Investments - Narrative (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Jul. 31, 2023 |
Cash and Cash Equivalents [Abstract] | ||
Accrued interest receivable | $ 9.5 | $ 7.2 |
Investment carrying value | $ 7.8 | $ 7.8 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Cash equivalents: | ||
Fair Value | $ 1,223,392 | $ 1,130,659 |
Short-term investments: | ||
Short-term investments | 962,681 | 838,026 |
Total cash equivalents and short-term investments | 2,186,073 | 1,968,685 |
Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Fair Value | 1,223,392 | 1,130,659 |
Short-term investments: | ||
Short-term investments | 962,681 | 838,026 |
Total cash equivalents and short-term investments | 2,186,073 | 1,968,685 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 4,740 | 12,581 |
Derivative assets-noncurrent | 137 | 2,264 |
Derivative liabilities-current | 5,978 | 1,452 |
Derivative liabilities-noncurrent | 2,286 | 669 |
Non-designated derivative instruments: | ||
Derivative assets-current | 4,740 | 12,581 |
Derivative liabilities-current | 5,978 | 1,452 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Not Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 914 | 2,061 |
Derivative liabilities-current | 860 | 465 |
Non-designated derivative instruments: | ||
Derivative assets-current | 914 | 2,061 |
Derivative liabilities-current | 860 | 465 |
Fair Value, Measurements, Recurring | Interest rate contracts assets | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative liabilities-current | 5,334 | 6,439 |
Derivative liabilities-noncurrent | 3,787 | 1,588 |
Non-designated derivative instruments: | ||
Derivative liabilities-current | 5,334 | 6,439 |
Fair Value, Measurements, Recurring | Level I | ||
Cash equivalents: | ||
Fair Value | 899,921 | 768,003 |
Short-term investments: | ||
Short-term investments | 0 | 0 |
Total cash equivalents and short-term investments | 899,921 | 768,003 |
Fair Value, Measurements, Recurring | Level I | Foreign currency contracts | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative assets-noncurrent | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Derivative liabilities-noncurrent | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Fair Value, Measurements, Recurring | Level I | Foreign currency contracts | Not Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Fair Value, Measurements, Recurring | Level I | Interest rate contracts assets | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative liabilities-current | 0 | 0 |
Derivative liabilities-noncurrent | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative liabilities-current | 0 | 0 |
Fair Value, Measurements, Recurring | Level II | ||
Cash equivalents: | ||
Fair Value | 323,471 | 362,656 |
Short-term investments: | ||
Short-term investments | 962,681 | 838,026 |
Total cash equivalents and short-term investments | 1,286,152 | 1,200,682 |
Fair Value, Measurements, Recurring | Level II | Foreign currency contracts | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 4,740 | 12,581 |
Derivative assets-noncurrent | 137 | 2,264 |
Derivative liabilities-current | 5,978 | 1,452 |
Derivative liabilities-noncurrent | 2,286 | 669 |
Non-designated derivative instruments: | ||
Derivative assets-current | 4,740 | 12,581 |
Derivative liabilities-current | 5,978 | 1,452 |
Fair Value, Measurements, Recurring | Level II | Foreign currency contracts | Not Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 914 | 2,061 |
Derivative liabilities-current | 860 | 465 |
Non-designated derivative instruments: | ||
Derivative assets-current | 914 | 2,061 |
Derivative liabilities-current | 860 | 465 |
Fair Value, Measurements, Recurring | Level II | Interest rate contracts assets | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative liabilities-current | 5,334 | 6,439 |
Derivative liabilities-noncurrent | 3,787 | 1,588 |
Non-designated derivative instruments: | ||
Derivative liabilities-current | 5,334 | 6,439 |
Fair Value, Measurements, Recurring | Level III | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
Short-term investments: | ||
Short-term investments | 0 | 0 |
Total cash equivalents and short-term investments | 0 | 0 |
Fair Value, Measurements, Recurring | Level III | Foreign currency contracts | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative assets-noncurrent | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Derivative liabilities-noncurrent | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Fair Value, Measurements, Recurring | Level III | Foreign currency contracts | Not Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative assets-current | 0 | 0 |
Derivative liabilities-current | 0 | 0 |
Fair Value, Measurements, Recurring | Level III | Interest rate contracts assets | Designated as Hedging Instrument | ||
Designated derivative instruments: | ||
Derivative liabilities-current | 0 | 0 |
Derivative liabilities-noncurrent | 0 | 0 |
Non-designated derivative instruments: | ||
Derivative liabilities-current | 0 | 0 |
U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 181,344 | 173,576 |
U.S. treasury securities | Fair Value, Measurements, Recurring | ||
Short-term investments: | ||
Short-term investments | 181,344 | 173,576 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level I | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level II | ||
Short-term investments: | ||
Short-term investments | 181,344 | 173,576 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level III | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
U.S. government agency securities | ||
Short-term investments: | ||
Short-term investments | 293,966 | 262,095 |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Short-term investments: | ||
Short-term investments | 293,966 | 262,095 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level I | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level II | ||
Short-term investments: | ||
Short-term investments | 293,966 | 262,095 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level III | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Corporate debt securities | ||
Short-term investments: | ||
Short-term investments | 487,371 | 402,355 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Short-term investments: | ||
Short-term investments | 487,371 | 402,355 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level I | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level II | ||
Short-term investments: | ||
Short-term investments | 487,371 | 402,355 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level III | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Money market funds | ||
Cash equivalents: | ||
Fair Value | 899,921 | 768,003 |
Money market funds | Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Fair Value | 899,921 | 768,003 |
Money market funds | Fair Value, Measurements, Recurring | Level I | ||
Cash equivalents: | ||
Fair Value | 899,921 | 768,003 |
Money market funds | Fair Value, Measurements, Recurring | Level II | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Level III | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
U.S. treasury securities | ||
Cash equivalents: | ||
Fair Value | 190,267 | 157,220 |
U.S. treasury securities | Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Fair Value | 190,267 | 157,220 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level I | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level II | ||
Cash equivalents: | ||
Fair Value | 190,267 | 157,220 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Level III | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
U.S. government agency securities | ||
Cash equivalents: | ||
Fair Value | 110,539 | 166,636 |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Fair Value | 110,539 | 166,636 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level I | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level II | ||
Cash equivalents: | ||
Fair Value | 110,539 | 166,636 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level III | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
Corporate debt securities | ||
Cash equivalents: | ||
Fair Value | 22,665 | 38,800 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Cash equivalents: | ||
Fair Value | 22,665 | 38,800 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level I | ||
Cash equivalents: | ||
Fair Value | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level II | ||
Cash equivalents: | ||
Fair Value | 22,665 | 38,800 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level III | ||
Cash equivalents: | ||
Fair Value | $ 0 | $ 0 |
Property and Equipment and Pu_3
Property and Equipment and Purchased Intangible Assets - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 458,317 | $ 418,779 |
Less: Accumulated depreciation and amortization | (192,725) | (176,424) |
Total property and equipment, net | 265,592 | 242,355 |
Hosting equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 307,479 | 280,851 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 133,023 | 120,877 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 7,516 | 7,107 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,311 | 1,311 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,028 | 1,025 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 7,960 | $ 7,608 |
Property and Equipment and Pu_4
Property and Equipment and Purchased Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Historical cost | $ 59,816 | $ 57,016 | |
Accumulated amortization | 34,193 | 31,157 | |
Depreciation and amortization expense | 13,962 | $ 11,876 | |
Capitalization of development costs of software for internal-use | 129,138 | 105,173 | |
Internet Protocol Addresses and Source Codes | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Historical cost | 10,100 | 8,600 | |
Accumulated amortization | $ 1,800 | $ 1,600 | |
Internet Protocol Addresses and Source Codes | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 5 years | ||
Internet Protocol Addresses and Source Codes | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 10 years | ||
Capitalized internal-use software | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalization of development costs of software for internal-use | $ 2,900 | $ 1,700 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 31, 2023 | Oct. 31, 2023 | Jul. 31, 2023 | |
Business Acquisition [Line Items] | |||
Developed technology, estimated useful life | 3 years | ||
Goodwill | $ 92,415 | $ 89,192 | |
Developed technology | |||
Business Acquisition [Line Items] | |||
Developed technology, estimated useful life | 3 years 1 month 6 days | ||
Securelyshare Software Private Ltd | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 5,300 | ||
Contingent consideration | $ 800 | ||
Contingent consideration term | 18 months | ||
Goodwill | $ 3,200 | ||
Deferred tax liability | 700 | ||
Securelyshare Software Private Ltd | Developed technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 2,800 | ||
Developed technology, estimated useful life | 5 years |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Oct. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 89,192 |
Goodwill acquired | 3,223 |
Goodwill, ending balance | $ 92,415 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Developed technology, estimated useful life | 3 years | |
Amortization expense of acquired intangible assets | $ 3,036 | $ 2,552 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Developed technology, estimated useful life | 3 years 1 month 6 days | |
Amortization expense of acquired intangible assets | $ 2,810 | |
Securelyshare | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangibles | $ 2,800 | |
Developed technology, estimated useful life | 5 years |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible Assets, Gross, beginning balance | $ 57,016 | ||
Additions | 2,800 | ||
Intangible Assets, Gross, ending balance | 59,816 | ||
Accumulated Amortization, beginning balance | (31,157) | ||
Amortization Expense | (3,036) | $ (2,552) | |
Accumulated Amortization, ending balance | (34,193) | ||
Total | $ 25,623 | $ 25,859 | |
Weighted Average Remaining Useful life | 3 years | ||
Developed technology | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible Assets, Gross, beginning balance | $ 53,456 | ||
Additions | 2,800 | ||
Intangible Assets, Gross, ending balance | 56,256 | ||
Accumulated Amortization, beginning balance | (29,259) | ||
Amortization Expense | (2,810) | ||
Accumulated Amortization, ending balance | (32,069) | ||
Total | $ 24,187 | 24,197 | |
Weighted Average Remaining Useful life | 3 years 1 month 6 days | ||
Customer relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible Assets, Gross, beginning balance | $ 3,560 | ||
Additions | 0 | ||
Intangible Assets, Gross, ending balance | 3,560 | ||
Accumulated Amortization, beginning balance | (1,898) | ||
Amortization Expense | (226) | ||
Accumulated Amortization, ending balance | (2,124) | ||
Total | $ 1,436 | $ 1,662 | |
Weighted Average Remaining Useful life | 2 years 2 months 12 days |
Goodwill and Acquired Intangi_6
Goodwill and Acquired Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (remaining nine months) | $ 8,797 | |
2025 | 6,825 | |
2026 | 5,812 | |
2027 | 2,988 | |
2028 | 1,155 | |
Thereafter | 46 | |
Total | $ 25,623 | $ 25,859 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Derivative [Line Items] | |||
Unrealized gains related to our cash flow hedges | $ 2,100 | ||
Gain (loss) recognized on cash flow hedges | (15,136) | $ (14,039) | |
Hedge accounting fair value adjustments | 9,416 | $ 8,306 | |
Long-term Debt | |||
Derivative [Line Items] | |||
Hedged liability, fair value hedge | 495,900 | ||
Foreign currency contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount | 162,100 | 182,900 | |
Foreign currency contracts | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount | 458,700 | $ 457,600 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amount | $ 500,000 | ||
Minimum | Foreign currency contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Term of derivative | 1 month | ||
Maximum | |||
Derivative [Line Items] | |||
Term of derivative | 21 months | ||
Maximum | Foreign currency contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Term of derivative | 4 months |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Changes of AOCI Related to our Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 725,112 | $ 573,300 |
Net unrealized losses recognized in accumulated other comprehensive income | (15,136) | (14,039) |
Losses (gains) reclassified from AOCI into the condensed consolidated statement of operations | (654) | 4,713 |
Ending balance | 807,525 | 431,275 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 8,937 | (13,744) |
Ending balance | $ (6,853) | $ (23,070) |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Cash Flow Hedges on our Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total | $ (654) | $ 4,713 |
Cost of revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total | (176) | 708 |
Sales and marketing | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total | (295) | 3,297 |
Research and development | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total | (92) | 464 |
General and administrative | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total | $ (91) | $ 244 |
Derivative Instruments - Sche_3
Derivative Instruments - Schedule of Derivative Instruments Designated as Fair Value Hedges (Details) - Interest rate swaps: $ in Thousands | 3 Months Ended |
Oct. 31, 2023 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Hedged items | $ (1,110) |
Derivatives designated as hedging instruments | 1,094 |
Total | $ (16) |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 25, 2020 | Oct. 31, 2023 | Jul. 31, 2023 |
Debt Instrument [Line Items] | |||
Proceeds from debt issuance | $ 1,130.5 | ||
Fair value of notes | $ 1,404.3 | $ 1,411.4 | |
Initial strike price (in dollars per share) | $ 150.80 | ||
Initial cap price (in dollars per shares) | $ 246.76 | ||
Convertible Senior Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 1,150 | ||
Interest rate | 0.125% | ||
Convertible Senior Notes, $150 million | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 150 |
Convertible Senior Notes - Carr
Convertible Senior Notes - Carrying Amounts (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Convertible Debt [Abstract] | ||
Principal amount | $ 1,149,993 | $ 1,149,993 |
Unamortized debt issuance costs | 6,551 | 7,528 |
Hedge accounting fair value adjustments | 9,416 | 8,306 |
Total | $ 1,134,026 | $ 1,134,159 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 359 | $ 359 |
Amortization of debt issuance costs | 977 | 972 |
Total | $ 1,336 | $ 1,331 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Jul. 31, 2023 |
Letters of Credits and Guarantees | ||
Loss Contingencies [Line Items] | ||
Aggregate value of unsecured letters of credits | $ 2.8 | $ 2.1 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Outstanding Stock Options | |||
Beginning balance (in shares) | 1,267,000 | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | (151,000) | ||
Canceled, forfeited or expired (in shares) | 0 | ||
Ending balance (in shares) | 1,116,000 | 1,267,000 | |
Exercisable and expected to vest (in shares) | 1,065,000 | 1,210,000 | |
Weighted-Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 18.54 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 8.30 | ||
Canceled, forfeited or expired (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | 19.93 | $ 18.54 | |
Exercisable and expected to vest (in dollars per share) | $ 13.68 | $ 12.82 | |
Additional Disclosures | |||
Options outstanding, weighted average remaining contractual term | 2 years 1 month 6 days | 2 years 1 month 6 days | |
Exercisable and expected to vest, weighted average remaining contractual term | 1 year 7 months 6 days | 1 year 9 months 18 days | |
Options outstanding, aggregate intrinsic value | $ 154,781 | $ 179,678 | |
Exercised, aggregate intrinsic value | 23,248 | $ 18,300 | |
Exercisable and expected to vest, aggregate intrinsic value | $ 154,496 | $ 178,616 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercised, aggregate intrinsic value | $ 23,248 | $ 18,300 | ||
Granted (in shares) | 0 | 0 | ||
Reversal of stock-based compensation | $ 129,138 | $ 105,173 | ||
Capitalized stock-based compensation | 4,700 | $ 4,000 | ||
President | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Reversal of stock-based compensation | $ (9,900) | |||
Employee Stock | 2018 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Accrued compensation | $ 18,600 | $ 7,400 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of RSU and PSA Activity (Details) - Restricted Stock Units and Performance Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Jul. 31, 2023 | |
Underlying Shares | ||
Beginning balance (in shares) | 9,351 | |
Granted (in shares) | 2,259 | |
Vested (in shares) | (993) | |
Canceled or forfeited (in shares) | (376) | |
Ending balance (in shares) | 10,241 | |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 139.95 | |
Granted (in dollars per share) | 160.89 | |
Vested (in dollars per share) | 131.96 | |
Canceled or forfeited (in shares) | 155.43 | |
Ending balance (in dollars per share) | $ 144.80 | |
Aggregate Intrinsic Value | ||
Balance | $ 1,625,139 | $ 1,499,714 |
Vested | $ 154,937 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 129,138 | $ 105,173 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 12,584 | 8,432 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 56,630 | 53,635 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 40,193 | 24,531 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 19,731 | $ 18,575 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 8,997 | $ 4,746 |
Net Loss Per Share - Net Loss P
Net Loss Per Share - Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss, basic | $ (33,483) | $ (68,162) |
Net loss, diluted | $ (33,483) | $ (68,162) |
Weighted-average shares used in computing net loss per share, basic (in shares) | 147,625 | 143,476 |
Weighted-average shares used in computing net loss per share, diluted (in shares) | 147,625 | 143,476 |
Net loss per share, basic (in dollars per share) | $ (0.23) | $ (0.48) |
Net loss per share, diluted (in dollars per share) | $ (0.23) | $ (0.48) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities Excluded from Computation (Details) - shares shares in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 20,141 | 17,627 |
Number of shares if notes converted (in shares) | 7,600 | |
Unvested RSUs and shares of common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 9,467 | 6,870 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,116 | 1,564 |
Unvested PSAs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 867 | 755 |
Number of unvested PSAs as a percentage of target | 100% | 100% |
Share purchase rights under the ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,065 | 812 |
Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 7,626 | 7,626 |
Uncategorized Items - zs-202310
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |