0001528396-22-000106 | 10-K | XBRL Viewer

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Jul. 31, 2022	Aug. 31, 2022	Jan. 31, 2022
Cover [Abstract]
Entity Central Index Key	0001528396
Current Fiscal Year End Date	--07-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Document Type	10-K
Document Annual Report	true
Document Period End Date	Jul. 31, 2022
Document Transition Report	false
Entity File Number	001-35394
Entity Registrant Name	Guidewire Software, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-4468504
Entity Address, Address Line One	2850 S. Delaware St., Suite 400,
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94403
City Area Code	650
Local Phone Number	357-9100
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	GWRE
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	true
Entity Public Float			$ 5,400.0
Entity Common Stock, Shares Outstanding (in shares)		84,084,360
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement relating to its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this report where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Audit Information	12 Months Ended
Audit Information	Jul. 31, 2022
Audit Information [Abstract]
Auditor Name	KPMG LLP
Auditor Location	Santa Clara, California
Auditor Firm ID	185

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 31, 2022	Jul. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 606,303	$ 384,910
Short-term investments	369,865	734,517
Accounts receivable, net of allowances of $359 and $1,057, respectively	143,797	104,068
Unbilled accounts receivable, net	71,515	79,061
Prepaid expenses and other current assets	61,223	52,729
Total current assets	1,252,703	1,355,285
Long-term investments	187,507	227,164
Unbilled accounts receivable, net	13,914	24,361
Property and equipment, net	80,740	80,061
Operating lease assets	90,287	97,447
Intangible assets, net	21,361	19,743
Goodwill	372,192	340,877
Deferred tax assets, net	191,461	138,428
Other assets	56,732	38,479
TOTAL ASSETS	2,266,897	2,321,845
CURRENT LIABILITIES:
Accounts payable	40,440	27,830
Accrued employee compensation	90,962	102,137
Deferred revenue, net	170,776	138,699
Other current liabilities	35,340	31,648
Total current liabilities	337,518	300,314
Lease liabilities	105,123	115,374
Convertible senior notes, net	358,216	343,825
Deferred revenue, net	7,500	7,237
Other liabilities	6,883	10,201
Total liabilities	815,240	776,951
Commitments and contingencies (Note 9)
STOCKHOLDERS’ EQUITY:
Common stock, par value $0.0001 per share—500,000,000 shares authorized as of July 31, 2020 and 2019; 83,461,925 and 82,140,883 shares issued and outstanding as of July 31, 2020 and 2019, respectively	8	8
Additional paid-in capital	1,755,476	1,617,204
Accumulated other comprehensive income (loss)	(19,845)	(6,218)
Retained earnings (accumulated deficit)	(283,982)	(66,100)
Total stockholders’ equity	1,451,657	1,544,894
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 2,266,897	$ 2,321,845

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 31, 2022	Jul. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit loss	$ 359	$ 1,057
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common Stock, Shares, Issued (in shares)	84,084,209	83,194,157
Common stock, shares outstanding (in shares)	84,084,209	83,194,157

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2020
Revenue:
Total revenue	$ 812,614	$ 743,267	$ 742,307
Cost of revenue:
Total cost of revenue	460,394	375,054	338,015
Gross profit:
Total gross profit	352,220	368,213	404,292
Operating expenses:
Research and development	249,665	219,494	200,575
Sales and marketing	194,611	160,544	142,420
General and administrative	107,391	93,759	85,183
Total operating expenses	551,667	473,797	428,178
Income (loss) from operations	(199,447)	(105,584)	(23,886)
Interest income	6,277	7,395	24,705
Interest expense	(19,446)	(18,711)	(17,945)
Other income (expense), net	(17,099)	12,619	(7,205)
Income (loss) before provision for (benefit from) income taxes	(229,715)	(104,281)	(24,331)
Provision for (benefit from) income taxes	(49,284)	(37,774)	2,867
Net income (loss)	$ (180,431)	$ (66,507)	$ (27,198)
Earnings per share:
Basic (in USD per share)	$ (2.16)	$ (0.79)	$ (0.33)
Diluted (in USD per share)	$ (2.16)	$ (0.79)	$ (0.33)
Shares used in computing earnings per share:
Basic (in shares)	83,569,517	83,577,375	82,855,392
Diluted (in shares)	83,569,517	83,577,375	82,855,392
Subscription and support
Revenue:
Total revenue	$ 343,708	$ 252,358	$ 203,473
Cost of revenue:
Total cost of revenue	213,275	164,983	117,158
Gross profit:
Total gross profit	130,433	87,375	86,315
License
Revenue:
Total revenue	258,631	303,792	331,554
Cost of revenue:
Total cost of revenue	8,754	10,569	11,566
Gross profit:
Total gross profit	249,877	293,223	319,988
Services
Revenue:
Total revenue	210,275	187,117	207,280
Cost of revenue:
Total cost of revenue	238,365	199,502	209,291
Gross profit:
Total gross profit	$ (28,090)	$ (12,385)	$ (2,011)

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (180,431)	$ (66,507)	$ (27,198)
Other comprehensive income (loss):
Foreign currency translation adjustments	(7,201)	1,779	518
Unrealized gains (losses) on available-for-sale securities	(8,342)	(4,746)	2,138
Tax benefit (expense) on unrealized gains (losses) on available-for-sale securities	2,009	872	(669)
Reclassification adjustment for realized gains (losses) included in net income (loss)	(93)	1,123	632
Total other comprehensive income (loss)	(13,627)	(972)	2,619
Comprehensive income (loss)	$ (194,058)	$ (67,479)	$ (24,579)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

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Amount after tax and reclassification adjustments of other comprehensive income (loss).

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Additional paid-in capital	Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss) Cumulative Effect, Period of Adoption, Adjustment	Retained earnings (accumulated deficit)	Retained earnings (accumulated deficit) Cumulative Effect, Period of Adoption, Adjustment	Common stock Common stock
Balance (in shares) at Jul. 31, 2019								82,140,883
Balance, beginning at Jul. 31, 2019	$ 1,574,201	$ 0	$ 1,391,904	$ (7,758)	$ (107)	$ 190,047	$ 107	$ 8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ (27,198)					(27,198)
Issuance of common stock upon exercise of stock options (in shares)	132,573							132,573
Issuance of common stock upon exercise of stock options	$ 4,955		4,955
Issuance of common stock upon RSU release (in shares)								1,188,469
Stock-based compensation	102,191		102,191
Foreign currency translation adjustment	518			518
Unrealized gain (loss) on available-for-sale securities, net of tax	1,469			1,469
Reclassification adjustment for realized gain (loss) on available-for-sale securities, included in net income (loss)	632			632
Balance (in shares) at Jul. 31, 2020								83,461,925
Balance, ending at Jul. 31, 2020	1,656,768		1,499,050	(5,246)		162,956		$ 8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ (66,507)					(66,507)
Issuance of common stock upon exercise of stock options (in shares)	53,932							53,932
Issuance of common stock upon exercise of stock options	$ 1,932		1,932
Issuance of common stock upon RSU release (in shares)								1,167,291
Stock-based compensation	116,222		116,222
Foreign currency translation adjustment	1,779			1,779
Unrealized gain (loss) on available-for-sale securities, net of tax	(3,874)			(3,874)
Reclassification adjustment for realized gain (loss) on available-for-sale securities, included in net income (loss)	1,123			1,123
Repurchase and retirement of common stock (in shares)								(1,488,991)
Repurchase and retirement of common stock	(162,549)					(162,549)
Balance (in shares) at Jul. 31, 2021								83,194,157
Balance, ending at Jul. 31, 2021	1,544,894		1,617,204	(6,218)		(66,100)		$ 8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ (180,431)					(180,431)
Issuance of common stock upon exercise of stock options (in shares)	10,472							10,472
Issuance of common stock upon exercise of stock options	$ 116		116
Issuance of common stock upon RSU release (in shares)								1,202,125
Stock-based compensation	138,156		138,156
Foreign currency translation adjustment	(7,201)			(7,201)
Unrealized gain (loss) on available-for-sale securities, net of tax	(6,333)			(6,333)
Reclassification adjustment for realized gain (loss) on available-for-sale securities, included in net income (loss)	(93)			(93)
Repurchase and retirement of common stock (in shares)								(322,545)
Repurchase and retirement of common stock	(37,451)					(37,451)
Balance (in shares) at Jul. 31, 2022								84,084,209
Balance, ending at Jul. 31, 2022	$ 1,451,657		$ 1,755,476	$ (19,845)		$ (283,982)		$ 8

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (180,431)	$ (66,507)	$ (27,198)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	33,540	36,955	42,641
Amortization of debt discount and issuance costs	14,391	13,617	12,886
Amortization of contract costs	14,456	11,442	9,892
Stock-based compensation	137,011	115,009	101,817
Changes to allowance for credit losses and revenue reserves	2,597	226	367
Deferred income tax	(54,115)	(35,789)	(11,859)
Amortization of premium (accretion of discount) on available-for-sale securities, net	5,498	6,567	(1,882)
Changes in fair value of strategic investments	(1,545)	0	10,672
Other non-cash items affecting net income (loss)	63	863	739
Changes in operating assets and liabilities:
Accounts receivable	(42,545)	10,820	23,878
Unbilled accounts receivable	18,106	(19,194)	(38,125)
Prepaid expenses and other assets	(23,390)	(16,764)	(18,564)
Operating lease assets	7,160	6,350	(10,784)
Accounts payable	13,580	3,627	(1,209)
Accrued employee compensation	(8,942)	41,526	(15,624)
Deferred revenue	31,564	12,940	1,165
Lease liabilities	(9,637)	(3,346)	18,678
Other liabilities	4,699	(6,755)	15,576
Net cash provided by (used in) operating activities	(37,940)	111,587	113,066
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities	(519,536)	(1,033,095)	(1,280,755)
Sales of available-for-sale securities	74,552	123,234	134,050
Maturities of available-for-sale securities	834,362	1,005,290	1,168,720
Purchases of property and equipment	(9,510)	(19,008)	(21,377)
Capitalized software development costs	(12,266)	(9,846)	(4,283)
Acquisition of strategic investments	(11,560)	(2,384)	(2,156)
Acquisition of business, net of acquired cash	(43,830)	0	0
Net cash provided by (used in) investing activities	312,212	64,191	(5,801)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon exercise of stock options	116	1,932	4,955
Repurchase and retirement of common stock	(37,451)	(161,319)	0
Net cash provided by (used in) financing activities	(37,335)	(159,387)	4,955
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(7,161)	1,550	648
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	229,776	17,941	112,868
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period	384,910	366,969	254,101
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period	614,686	384,910	366,969
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	5,000	5,000	5,000
Cash paid for income taxes, net of tax refunds	4,323	4,155	4,888
Accruals for purchase of property and equipment	1,114	1,676	343
Accruals for capitalized cloud software development costs	1,250	845	406
Accrual for shares repurchased	$ 0	$ 1,230	$ 0

The Company and Summary of Significant Accounting Policies and Estimates

12 Months Ended

Jul. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company and Summary of Significant Accounting Policies and Estimates

Company

Guidewire Software, Inc., a Delaware corporation, was incorporated on September 20, 2001. Guidewire Software, Inc., together with its subsidiaries (the “Company”), provides a technology platform which combines core operations, digital engagement, analytics, and artificial intelligence (“AI”) applications. The Company’s technology platform supports core insurance operations, including underwriting, policy administration, claim management, and billing; insights into data that can improve business decision making; and digital sales, service, and claims experiences for policyholders, agents, and other key stakeholders. The Company’s customers are primarily property and casualty insurance carriers.

Basis of Presentation and Consolidation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements and notes include the Company and its wholly-owned subsidiaries and reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the periods presented. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Significant items subject to such estimates include, but are not limited to, revenue recognition, the useful lives of property and equipment and intangible assets, accounts receivable and unbilled accounts receivable allowances, valuation allowance for deferred tax assets, stock-based compensation, annual bonus attainment, income tax uncertainties, fair value of convertible senior notes and investments, valuation of goodwill and intangible assets, fair value of acquired assets and assumed liabilities, software development costs to be capitalized, leases, and contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from these estimates.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is their respective local currency. The Company translates all assets and liabilities of foreign subsidiaries to U.S. dollars at the current exchange rate as of the applicable balance sheet date. Revenue and expenses are translated at the average exchange rate prevailing during the period in which the transactions occur. The effects of foreign currency translations are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity in the accompanying consolidated balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of the recording entity are included in other income (expense) in the consolidated statements of operations.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. Cash equivalents primarily consist of commercial paper and money market funds.

Investments

Management determines the appropriate classification of investments at the time of purchase based upon management’s intent with regard to such investments. All investments in the periods presented have been classified as available-for-sale.

The Company classifies investments as short-term when they have remaining contractual maturities of one year or less from the balance sheet date, and as long-term when the investments have remaining contractual maturities of more than one year from the balance sheet date. Investments are recorded at fair value with unrealized holding gains and losses, net of taxes, generally included in accumulated other comprehensive income (loss). Unrealized losses related to the credit worthiness of an investment, if any, are recorded in other income (expense), net on the consolidated statements of operations.

Property, Equipment, and Software Development Costs

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs that do not extend the life or improve an asset are expensed in the period incurred.

The estimated useful lives of property and equipment are as follows:


Computer hardware						3 years
Purchased software						3 years
Software development						3 to 5 years
Equipment and machinery						3 to 5 years
Furniture and fixtures						5 years
Leasehold improvements						Shorter of 10 years or remaining lease term

Certain development costs related to software delivered to customers (“self-managed software”) incurred subsequent to the establishment of technological feasibility are subject to capitalization and amortized over the estimated lives of the related products. Technological feasibility is established upon completion of a working model. Costs incurred subsequent to the establishment of technological feasibility have not been material and, therefore, all software development costs related to self-managed software have been charged to research and development expense in the accompanying consolidated statements of operations as incurred.

The Company capitalizes software development costs for technology applications that provide new or significantly enhanced functionality that the Company will offer solely as a cloud-based subscription. Capitalized costs are primarily comprised of compensation for employees who are directly associated with cloud software development projects. The Company begins to capitalize costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. If any of these criteria cease being met before the software reaches its intended use, any capitalized costs related to the project will be impaired. When the software reaches its intended use which is typically once the technology applications are available for general release, capitalized costs are amortized to cost of revenue over the estimated useful lives of the related assets, generally estimated to be three to five years. Costs incurred prior to meeting these capitalization criteria and costs incurred for training and maintenance are recorded as research and development expense in the Company’s consolidated statements of operations. Capitalized software development costs are recorded in property and equipment in the Company’s consolidated balance sheets.

Leases

The Company accounts for leases under Accounting Standards Codification Topic 842: Leases (“ASC 842”) issued by the Financial Accounting Standards Board. Under ASC 842, the Company determines if an arrangement is a lease at inception of the agreement. If an arrangement is determined to be a lease, an operating lease asset, also known as a right-of-use asset, and lease liability are recorded based on the present value of lease payments over the non-cancellable lease term. In connection with determining the present value of the lease payments, the Company considers only payments that are fixed and determinable at the time of commencement, including non-lease components that are fixed throughout the lease term. Variable components of the lease payments, such as utilities, maintenance, and taxes, are expensed as incurred and not included in determining the present value of the lease liability. As the Company's leases generally do not provide an implicit rate, the Company's incremental borrowing rate, calculated based on available information at the lease commencement date, is used in determining the present value of the lease payments. The Company's incremental borrowing rate is a hypothetical rate based on the Company's understanding of its credit rating. The lease term used to calculate the lease liability and operating lease asset includes options to extend or terminate the lease if it is reasonably certain the Company will exercise that option. Operating lease assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. Lease expense is recognized on a straight-line basis over the lease term and is reflected in the consolidated statements of operations in each of the cost of revenue and operating expense categories.

The Company also enters into agreements to sublease unoccupied office space. Any sublease payments received in excess of the straight-line rent expense related to the subleased space are recorded as an offset to operating expenses over the sublease term.

Operating leases are included in operating lease assets, other current liabilities, and lease liabilities on the consolidated balance sheets.

Impairment of Long-Lived Assets, Intangible Assets, and Goodwill

The Company evaluates its long-lived assets, consisting of property and equipment, operating lease assets, and intangible assets, for indicators of possible impairment when events or changes in circumstances indicate that the carrying amount of certain assets may not be recoverable. Impairment exists if the carrying amount of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying amount of the assets over the estimated fair value of the assets. There have been no long-lived asset impairments during the periods presented.

The Company tests goodwill for impairment annually, during the fourth quarter of each fiscal year, and in the interim whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the Company’s single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. In performing the qualitative assessment, the Company considers events and circumstances, including, but not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting unit’s net assets, and changes in the price of the Company’s common stock. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then the goodwill impairment test is not performed. There have been no goodwill impairments during the periods presented.

Convertible Senior Notes

In March 2018, the Company issued $400.0 million aggregate principal amount of 1.25% Convertible Senior Notes due 2025 (the “Convertible Senior Notes”). The Company accounts for the liability and equity components of the issued Convertible Senior Notes separately. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Convertible Senior Notes as a whole. This difference represents a debt discount that is amortized to interest expense using the effective interest method over the term of the Convertible Senior Notes. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The liability and equity components will not be remeasured as long as the conversion option continues to meet the requirements for equity classification. The equity component is net of issuance costs and recorded in additional paid-in capital.

Business Combinations

The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and subject to refinement, and, as a result, actual results may differ from estimates. During the measurement period, which may be up to one year from the acquisition date, if new information is obtained about facts and circumstances that existed as of the acquisition date, the Company may record adjustments to the fair value of these assets and liabilities, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired and liabilities assumed, whichever comes first, subsequent adjustments, if any, are recorded to the Company’s consolidated statements of operations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, investments, accounts receivable, and unbilled accounts receivable. The Company maintains its cash, cash equivalents, and investments with high quality financial institutions. The Company is exposed to credit risk for cash held in financial institutions in the event of a default to the extent that such amounts recorded in the consolidated balance sheets are in excess of amounts that are insured by the Federal Deposit Insurance Corporation.

No customer individually accounted for 10% or more of the Company’s revenue for the years ended July 31, 2022, 2021, and 2020. As of July 31, 2022 and July 31, 2021, no customer accounted for 10% or more of the Company’s total accounts receivable.

Accounts Receivable and Allowances

Accounts receivable are recorded at invoiced amounts and do not bear interest. While the Company does not require collateral, the Company performs ongoing credit evaluations of its customers. The Company maintains an allowance for credit losses based upon the expected collectability of its accounts receivable. The expectation of collectability is based on historical loss patterns, the number

of days that billings are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Credit losses are recorded in general and administrative expense while billing and other revenue adjustments are recorded against the corresponding revenue financial statement line item in the consolidated statements of operations.

Revenue Recognition

The Company’s revenue is derived from contracts with customers. The majority of the Company’s revenue is derived from subscriptions to its cloud services, licensing arrangements for its software, and implementation and other professional services arrangements. The Company accounts for revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is to recognize revenue upon the transfer of services or products to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products.

The Company applies the following framework to recognize revenue:

Identification of the contract, or contracts, with the customer

The Company considers the terms and conditions of written contracts and its customary business practices in identifying its contracts. The Company determines it has a contract with a customer when the contract is approved, the Company can identify each party’s rights regarding the services and products to be transferred, the Company can identify the payment terms for the services and products, the Company has determined that the customer has the ability and intent to pay, and the contract has commercial substance. In general, contract terms will be reflected in a written document that is signed by both parties. At contract inception, the Company evaluates whether two or more contracts with the same customer should be combined and accounted for as a single contract. The customer’s ability and intent to pay is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

Contracts may be modified to account for changes in contract scope or price. The Company considers contract modifications to exist when the modification either creates new rights or obligations or changes the existing enforceable rights and obligations of either party. Contract modifications for services and products that are distinct from the existing contract and are priced commensurate with their standalone selling price are treated as separate contracts, and are accounted for prospectively. Contract modifications for services and products that are distinct but are not priced commensurate with their standalone selling price or are not distinct from the existing contract may affect the initial transaction price or the allocation of the transaction price to the performance obligations in the contract. In such cases, recognized revenue may be adjusted.

Identification of the performance obligation in the contract

Performance obligations promised in a contract are identified based on the services or products that will be transferred to the customer that are both:

i.capable of being distinct, whereby the customer can benefit from the service or product either on its own or together with other resources that are readily available from the Company or third parties, and

ii.distinct in the context of the contract, whereby the transfer of the services or products is separately identifiable from other promises in the contract.

To the extent a contract includes multiple promised services or products, the Company applies judgment to determine whether promised services or products are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised services or products are accounted for as a combined performance obligation.

The Company generates revenue from the following sources, which represent the performance obligations of the Company:

i.Subscription services related to the Company’s Software-as-a-Service (“SaaS”) offerings, including hosting;

ii.Support activities that consist of email and phone support, bug fixes, and unspecified software updates and upgrades released when, and if, available during the support term;

iii.Self-managed software licenses related to term or perpetual agreements; and

iv.Services related to the implementation and configuration of the Company’s services and products, reimbursable travel, and training.

Subscriptions are typically sold with a three- to five-year initial term with a customer option to renew on an annual basis after the initial term. Term licenses generally have a two-year initial term with a customer option to renew on an annual basis after the

initial term. In certain circumstances, the Company will enter into term licenses with an initial term of more than two years or a renewal period longer than one year. Support for term licenses follows the same contract periods. Professional services typically are time and materials contracts that last for an average period of approximately one year.

Determination of the transaction price

The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services and products to the customer. Consideration may vary due to discounts, incentives, and potential service level credits or contractual penalties. Variable consideration is estimated and included in the transaction price if, in the Company’s judgment, it is probable that there will not be a significant future reversal of cumulative revenue under the contract.

Self-managed software licenses and subscription services may be subject to either fixed or variable installments. Variable installments are generally subject to changes in a customer’s Direct Written Premium (“DWP”) or a customer’s Gross Written Premium (“GWP”). When consideration is subject to variable installments, the Company estimates variable consideration using the expected value method based on historical DWP or GWP usage to the extent that a significant revenue reversal is not probable to occur.

The Company elected the practical expedient to evaluate whether a significant financing component exists when the contract term is greater than one year and the timing of revenue recognition occurs in advance of invoicing. This timing difference occurs when control of the software license is transferred at a point in time, usually at the contract onset, but the customer payments occur over time. A significant financing component generally does not exist under the Company’s standard contracting and billing practices. For example, the Company’s typical time-based licenses have a two-year initial term with the final payment due at the end of the first year and the Company’s typical subscription services are generally billed in advance of providing the services.

Allocation of the transaction price to the performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on its standalone selling price (“SSP”) in relation to the total fair value of all performance obligations in the arrangement. Some of the Company’s performance obligations, such as support, implementation services, and training services, have observable inputs that are used to determine the SSP of those distinct performance obligations. Where SSP is not directly observable, the Company determines the SSP using information that may include market conditions and other observable inputs. In the circumstances when available information to determine SSP is highly variable or uncertain, such as for our term licenses, the Company will use the residual method.

The majority of the Company’s contracts contain multiple performance obligations, such as when licenses are sold with support, implementation services, or training services. Additionally, as customers enter into subscription agreements to migrate from an existing term license agreement, customers may be under contract for self-managed licenses and support, in addition to subscription services, for a period of time, which may require an allocation of the transaction price to each performance obligation. New and migration subscription agreements also typically include implementation, configuration, and training services, which may require an allocation of the transaction price to each performance obligation.

Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company recognizes revenue when control of the services or products is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products. The Company is principally responsible for the satisfaction of its distinct performance obligations, which are satisfied either at a point in time or over a period of time.

Performance obligations satisfied at a point in time

Self-managed term and perpetual software licenses comprise the majority of distinct performance obligations that are satisfied at a point in time. Revenue is recognized at the point in which the self-managed software licenses are made available to a customer. Consideration for self-managed software licenses is typically billed in advance on an annual basis over the license term, which is generally two years.

Performance obligations satisfied over a period of time

Subscriptions, support activities, and professional service arrangements comprise the majority of distinct performance obligations that are satisfied over a period of time.

Revenue from subscription arrangements is recognized ratably over the subscription period using a time-based measure of progress as customers receive the benefits from their subscriptions over the contractually agreed-upon term. The Company’s

subscription arrangements are generally three to five years in duration. Consideration for subscription arrangements is typically billed in advance on an annual basis over the contract period.

Revenue from support activities associated with self-managed licenses is a stand-ready obligation, which is generally recognized over the contractually agreed-upon term using a time-based measure of progress as customers receive benefits from the availability of support technicians over the support period. Consideration for support activities is typically billed in advance on an annual basis. The Company’s support activities are consistently priced as a percentage of the associated self-managed software license.

Revenue from professional service arrangements is recognized over the service period as the underlying services are performed.

In substantially all of the Company’s professional service contracts, services are separately identifiable performance obligations for which related revenue and costs are recognized according to when each service obligation is delivered. Substantially all professional services engagements are billed and recognized on a time and materials basis. In select situations, the Company will contract professional services on a fixed fee basis, where the Company generally recognizes services revenue over time, using an input method. The measure of progress of the professional services being provided under these fixed fee arrangements is based on hours incurred compared to estimates of the total hours to complete the performance obligation.

When professional services are sold with a self-managed license or subscription arrangement, the Company evaluates whether the performance obligations are distinct or separately identifiable, or whether they constitute a single performance obligation. In the limited cases where professional services are not considered to be distinct from the self-managed license or subscription services, the Company will recognize revenue based on the nature and term of the combined performance obligation when control of the combined performance obligation is transferred to the customer.

Balance Sheet Presentation

Contracts with customers are reflected in the consolidated balance sheets as follows:

•Accounts receivable, net represents amounts billed to customers in accordance with contract terms for which payment has not yet been received. It is presented net of any allowances as part of current assets in the consolidated balance sheets.

•Unbilled accounts receivable, net represents amounts that are unbilled due to agreed-upon contractual terms in which billing occurs subsequent to revenue recognition. This situation typically occurs when the Company transfers control of self-managed software licenses to customers up-front, but invoices customers annually over the term of the license. Additionally, subscription agreements with ramped billing schedules could result in unbilled accounts receivable in the early years of the committed term. Unbilled accounts receivable is classified as either current or non-current based on the duration of remaining time between the date of the consolidated balance sheets and the anticipated due date of the underlying receivables. Unbilled accounts receivable is evaluated for credit losses based upon the expected collectibility of future accounts receivable, customer payment history, global economic conditions, and ongoing credit evaluations of customers. Unbilled accounts receivable is presented net of allowance for credit losses, if applicable, in the consolidated balance sheets. This balance represents contract assets.

•Contract costs include customer acquisition costs, which consist primarily of sales commissions and related payroll taxes paid to sales personnel and referral fees paid to third-parties, and costs to fulfill a contract, which consist primarily of royalties payable to third-party software providers that support both the Company’s software offerings and support services. The short-term portion is presented as prepaid and other current assets. The long-term portion is presented as other assets.

•Deferred costs represent costs related to our professional services that have been deferred to align with revenue recognition. The short-term portion is presented as prepaid and other current assets. The long-term portion is presented as other assets.

•Deferred revenue, net represents amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue because the related services or products have not been transferred to the customer. Deferred revenue consists primarily of subscriptions and support services that are billed annually in advance but recognized over time. Deferred revenue that will be realized during the 12-month period following the date of the consolidated balance sheets is recorded as current. The remaining deferred revenue is recorded as non-current. These balances represent contract liabilities.

The Company may receive consideration from its customers in advance of performance on a portion of the contract, thereby creating a contractual liability, and, on another portion of the contract, perform in advance of receiving consideration, thereby creating a contractual asset. Contract assets and liabilities related to rights and obligations in a contract are interdependent. Therefore, contract assets and liabilities are presented net at the contract level, as either a single contract asset or a single contract liability, in the consolidated balance sheets.

Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. The Company excludes amounts related to professional services contracts that are on a time and materials basis from remaining performance obligations.

Contract Costs

Contract costs consist of two components: customer acquisition costs and costs to fulfill a contract.

Customer acquisition costs are capitalized only if the costs are incrementally incurred to obtain a customer contract and the expected amortization period is greater than one year. Contract costs are classified as either current or non-current based on the duration of time remaining between the date of the consolidated balance sheets and the anticipated amortization date of the associated costs. Capitalized customer acquisition costs related to software licenses, subscriptions, and support services are amortized over the period of which the benefit is expected to be received, which the Company estimates to be approximately five years. The amortization of customer acquisition costs is classified as a sales and marketing expense in the consolidated statement of operations.

Costs to fulfill a contract, or fulfillment costs, are only capitalized if they relate directly to a contract with a customer, the costs generate or enhance resources that will be used to satisfy performance obligations in the future, and the costs are expected to be recoverable. Fulfillment costs would be generally amortized over the same period of time as the customer acquisition costs. The amortization of fulfillment costs is classified as a cost of revenue in the consolidated statement of operations.

Warranties

The Company generally provides a warranty for its software services and products to its customers for periods ranging from three to 12 months. The Company’s software products are generally warranted to be free of defects in materials and workmanship under normal use and to substantially perform as described in published documentation. The Company’s services are generally warranted to be performed in a professional manner and to materially conform to the specifications set forth in the related customer contract. In the event there is a failure of such warranties, the Company generally will correct the problem or provide a reasonable workaround or replacement product. If the Company cannot correct the problem or provide a workaround or replacement product, then the customer’s remedy is generally limited to a refund of the fees paid for the non-conforming products or services. Warranty expense has been insignificant to date.

Advertising Costs

Advertising costs are expensed as incurred and amounts incurred were not material during the years ended July 31, 2022, 2021, and 2020.

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. The Company recognizes compensation expense net of actual forfeitures. The Company has granted stock options, time-based restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), and restricted stock units that may be earned subject to the Company’s total shareholder return ranking relative to the software companies in the S&P Software and Services Select Industry Index (“S&P Index”) over a specified performance period or periods, service periods and, in select cases, performance conditions (“TSR PSUs”). RSUs, PSUs, and TSR PSUs are collectively referred to as “Stock Awards.”

The fair value of the Company’s RSUs and PSUs is equal to the market value of the Company’s common stock on the date of grant. These awards are subject to time-based vesting, which generally occurs over a period of three to four years. The Company recognizes compensation expense for awards that contain only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes the compensation cost for awards that contain either performance conditions, market conditions, or both using the graded vesting method and a portion of the expense may fluctuate depending on changing estimates of the achievement of the performance conditions.

The fair value of the Company’s stock options is estimated at the grant date using the Black-Scholes option-pricing model. Recently granted stock options are subject to time-based vesting, which generally occurs over a period of two years. The Company recognizes compensation expense for stock options that contain only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period of the respective stock options. The inputs used in the Black-Scholes option-pricing model are subjective and generally requires significant judgment to determine.

Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options. The Company uses the simplified method to determine its expected term because of its limited history of stock option exercise activity.

Expected Volatility — The expected volatility is derived from the historical volatility of the Company’s common stock.

Risk-Free Interest Rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the options.

Expected Dividend — The expected dividend is zero, as the Company has never paid dividends and has no expectations to do so.

The fair value of the Company’s TSR PSUs is estimated at the grant date using a Monte Carlo simulation method. The assumptions utilized under this method requires judgments and estimates and changes in these inputs and assumptions could affect the measurement of the estimated fair value of the related compensation expense. Compensation expense associated with TSR PSUs will be recognized over the vesting period regardless of whether the market condition is ultimately satisfied; however, the expense will be reversed if a grantee terminates prior to satisfying the requisite service period. For TSR PSUs containing an additional performance condition, a portion of the expense may fluctuate depending on estimates of the achievement of the performance conditions. All TSR PSUs will vest at the end of a three-year period.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. All deferred tax assets and liabilities are classified as non-current on the Company’s consolidated balance sheets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded when it is more likely than not that some portion or all of such deferred tax assets will not be realized and is based on both positive and negative evidence about the future, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The effective tax rate in any given financial statement period may differ materially from the statutory rate. These differences may be caused by changes in tax regulations and resulting changes in the deferred tax valuation allowance; changes in the mix and level of income or losses; changes in the expected outcome of tax audits; permanent differences for stock-based compensation, including excess tax benefits; research and development credits; the tax rate differences between the United States and foreign countries; foreign withholding taxes; certain non-deductible expenses, including executive compensation; acquisition-related expenses; and provisions under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), including a provision to tax global intangible low-taxed income of foreign subsidiaries, a special deduction for foreign-derived intangible income, and a base erosion anti-abuse tax that may tax certain payments between a U.S. corporation and its foreign subsidiaries.

The Company records interest and penalties related to unrecognized tax benefits as income tax expense in its consolidated statement of operations.

Recent Accounting Pronouncements Not Yet Adopted

Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued ASU No. 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. By removing the separation model, a convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion features. This new standard also removes certain settlement conditions that are required for contracts to qualify for equity classification and simplifies the diluted earnings per share calculations by requiring that an entity use the

if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. The new standard will be effective and the Company will adopt it beginning August 1, 2022. The Company will adopt the standard on a modified retrospective basis and will not restate comparative periods. Upon adoption, the Company expects the requirement to use the if-converted method instead of the treasury stock method of accounting for the shares issuable upon conversion of the Convertible Senior Notes will most likely adversely affect diluted earnings per share. On the adoption date, the Company expects to record in the consolidated balance sheets an increase to Convertible Senior Notes, net of approximately $37 million, a decrease to accumulated deficit of approximately $40 million, a decrease to additional paid-in capital of approximately $68 million, and a decrease to deferred tax liability of approximately $9 million. Additionally, there will be an impact to the consolidated financial statements due to the removal of the equity component of the debt and the associated impact of such adjustment to the accretion of debt discount, which will result in a decrease in interest expense.

Other Accounting Pronouncements

Other recent accounting pronouncements that will be applicable to the Company are not expected to have a material impact on its present or future financial statements.

Revenue

12 Months Ended

Jul. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

Revenue by license or service type is as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Subscription and support
Subscription	259,232		168,649		119,658
Support	84,476		83,709		83,815
License
Term license	258,440		303,309		328,489
Perpetual license	191		483		3,065
Services	210,275		187,117		207,280
Total revenue	$	812,614	$	743,267	$	742,307

Revenue by revenue type and by geography is as follows (in thousands):


	Fiscal year ended July 31, 2022
	Subscription and support		License		Services		Total

United States	$	229,177	$	151,464	$	135,783	$	516,424
Canada	55,633		17,145		27,232		100,010
Other Americas	4,608		3,094		2,682		10,384
Total Americas	289,418		171,703		165,697		626,818
United Kingdom	9,421		20,740		4,074		34,235
Other EMEA	22,732		32,508		28,944		84,184
Total EMEA	32,153		53,248		33,018		118,419
Total APAC	22,137		33,680		11,560		67,377
Total revenue	343,708		258,631		210,275		812,614


	Fiscal year ended July 31, 2021
	Subscription and support		License		Services		Total

United States	$	167,920	$	180,742	$	123,498	$	472,160
Canada	35,465		26,214		13,464		75,143
Other Americas	4,234		4,651		5,307		14,192
Total Americas	207,619		211,607		142,269		561,495
United Kingdom	6,911		21,032		4,333		32,276
Other EMEA	20,449		39,553		29,574		89,576
Total EMEA	27,360		60,585		33,907		121,852
Total APAC	17,379		31,600		10,941		59,920
Total revenue	252,358		303,792		187,117		743,267


	Fiscal year ended July 31, 2020
	Subscription and support		License		Services		Total

United States	$	139,059	$	174,183	$	149,297	$	462,539
Canada	18,216		36,184		4,595		58,995
Other Americas	4,454		6,374		7,780		18,608
Total Americas	161,729		216,741		161,672		540,142
United Kingdom	6,942		36,185		5,397		48,524
Other EMEA	19,544		43,988		26,389		89,921
Total EMEA	26,486		80,173		31,786		138,445
Total APAC	15,258		34,640		13,822		63,720
Total revenue	203,473		331,554		207,280		742,307

No country or region other than those listed above accounted for more than 10% of revenue during the years ended July 31, 2022, 2021, and 2020.

Customer Contract – Related Balance Sheet Amounts

Amounts related to customer contract-related arrangements are included on the consolidated balance sheets as follows (in thousands):


	July 31, 2022	July 31, 2021
Unbilled accounts receivable, net	85,429	103,422
Contract costs, net	44,235	42,235

Deferred revenue, net	178,276	145,936

Unbilled accounts receivable

The unbilled accounts receivable, net decreased by $18.0 million primarily due to the impact of term license arrangements of approximately $17.1 million and, to a lesser extent, cloud subscription orders with ramped billing schedules.

As of July 31, 2022 and 2021, there was no allowance for credit losses associated with unbilled accounts receivable. During the year ended July 31, 2022, $3.0 million of unbilled accounts receivable, net was written off due to a contract termination as a result of United States government sanctions on Russia.

Contract costs

The current portion of contract costs of $14.8 million and $13.4 million is included in prepaid and other current assets on the Company’s consolidated balance sheets as of July 31, 2022 and 2021, respectively. The non-current portion of contract costs of $29.4 million and $28.9 million is included in other assets on the Company’s consolidated balance sheets as of July 31, 2022 and 2021, respectively. The Company amortized $14.5 million, $11.4 million, and $9.9 million of contract costs during the fiscal years ended July 31, 2022, 2021, and 2020 respectively.

Deferred revenue

During the fiscal year ended July 31, 2022, the Company recognized revenue of $137.7 million related to the Company’s deferred revenue balance reported as of July 31, 2021.

Remaining Performance Obligations

The aggregate amount of consideration allocated to remaining performance obligations either not satisfied or partially satisfied, was approximately $1,124.0 million as of July 31, 2022. Subscription services are typically satisfied over three to five years, support services are generally satisfied within one year, and professional services are typically satisfied within one year. Professional services under time and material contracts are not included in the remaining performance obligations calculation as these arrangements can be cancelled at any time.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Fair Value of Financial Instruments

12 Months Ended

Jul. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Available-for-sale investments within cash equivalents and investments consist of the following (in thousands):


	July 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. Government agency securities	$	37,572	$	—	$	(586)	$	36,986
Commercial paper	197,998		—		—		197,998
Corporate bonds	320,474		8		(4,880)		315,602
U.S. Government bonds	47,014		—		(1,312)		45,702
Asset-backed securities	54,782		—		(611)		54,171
Foreign government bonds	15,109		—		(361)		14,748
Municipal bonds	205		—		—		205
Certificates of deposit	43,715		—		—		43,715
Money market funds	349,492		—		—		349,492

Total	$	1,066,361	$	8	$	(7,750)	$	1,058,619


	July 31, 2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. Government agency securities	$	85,165	$	15	$	—	$	85,180
Commercial paper	389,837		—		—		389,837
Corporate bonds	371,374		623		(37)		371,960
U.S. Government bonds	64,401		62		(1)		64,462
Asset-backed securities	47,925		29		(7)		47,947
Foreign government bonds	33,177		10		(2)		33,185
Municipal bonds	1,685		—		—		1,685
Certificates of deposit	82,250		—		—		82,250
Money market funds	125,118		—		—		125,118
Strategic convertible debt investment*	1,000		—		—		1,000
Total	$	1,201,932	$	739	$	(47)	$	1,202,624

*At original cost

The Company does not consider any portion of the unrealized losses at July 31, 2022 to be credit losses. The Company has recorded the securities at fair value in its consolidated balance sheets, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss). The amount of unrealized gains and losses reclassified into earnings are based on the specific identification of the securities sold. The realized gains and losses from sales of securities are presented in the consolidated statements of comprehensive income (loss).

The following table summarizes the contractual maturities of the Company’s available-for-sale investments measured at fair value (in thousands):


	July 31, 2022
	Less Than 12 Months		12 months or greater		Total
U.S. Government agency securities	$	36,986	$	—	$	36,986
Commercial paper	197,998		—		197,998
Corporate bonds	203,960		111,642		315,602
U.S. Government bonds	25,429		20,273		45,702
Asset-backed securities	8,627		45,544		54,171
Foreign government bonds	4,700		10,048		14,748
Municipal bonds	205		—		205
Certificates of deposit	43,715		—		43,715
Money market funds	349,492		—		349,492

Total	$	871,112	$	187,507	$	1,058,619

Fair Value Measurement

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company applies the three-level valuation hierarchy when measuring the fair value of certain assets and liabilities:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2—Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and

Level 3—Unobservable inputs that are supported by little or no market activity, which require the Company to develop its own assumptions.

Available-for-sale investments

The following tables summarize the Company’s available-for-sale investments measured at fair value, by level within the fair value hierarchy (in thousands):


	July 31, 2022
	Level 1		Level 2		Level 3		Total
Cash equivalents:
U.S. Government agency securities	$	—	$	10,000	$	—	$	10,000
Commercial paper	—		132,066		—		132,066

Certificates of deposit	—		9,689		—		9,689
Money market funds	349,492		—		—		349,492

Total cash equivalents	349,492		151,755		—		501,247
Short-term investments:
U.S. Government agency securities	—		26,986		—		26,986
Commercial paper	—		65,932		—		65,932
Corporate bonds	—		203,960		—		203,960
U.S. Government bonds	—		25,429		—		25,429
Asset-backed securities	—		8,627		—		8,627
Foreign government bonds	—		4,700		—		4,700
Municipal bonds	—		205		—		205
Certificates of deposit	—		34,026		—		34,026

Total short-term investments	—		369,865		—		369,865
Long-term investments:


Corporate bonds	—		111,642		—		111,642
U.S. Government bonds	—		20,273		—		20,273
Asset-backed securities	—		45,544		—		45,544
Foreign government bonds	—		10,048		—		10,048



Total long-term investments	—		187,507		—		187,507
Total	$	349,492	$	709,127	$	—	$	1,058,619


	July 31, 2021
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Commercial paper	$	—	$	115,825	$	—	$	115,825


Money market funds	125,118		—		—		125,118

Total cash equivalents	125,118		115,825		—		240,943
Short-term investments:
U.S. Government agency securities	—		69,183		—		69,183
Commercial paper	—		274,012		—		274,012
Corporate bonds	—		225,384		—		225,384
U.S. Government bonds	—		45,320		—		45,320
Asset-backed securities	—		9,036		—		9,036
Foreign government bonds	—		28,353		—		28,353
Municipal bonds	—		1,480		—		1,480
Certificates of deposit	—		80,750		—		80,750
Strategic convertible debt investment	—		—		1,000		1,000
Total short-term investments	—		733,518		1,000		734,518
Long-term investments:
U.S. Government agency securities	—		15,997		—		15,997

Corporate bonds	—		146,576		—		146,576
U.S. Government bonds	—		19,142		—		19,142
Asset-backed securities	—		38,911		—		38,911
Foreign government bonds	—		4,832		—		4,832
Municipal bonds	—		205		—		205
Certificates of deposit	—		1,500		—		1,500


Total long-term investments	—		227,163		—		227,163
Total	$	125,118	$	1,076,506	$	1,000	$	1,202,624

Convertible Senior Notes

The fair value of the Convertible Senior Notes was $387.6 million and $452.0 million at July 31, 2022 and 2021, respectively. The Company estimates the fair value of the Convertible Senior Notes using commonly accepted valuation methodologies and market-based risk measurements that are directly observable, such as unadjusted quoted prices in markets that are not active (Level 2). The Company carries the Convertible Senior Notes at initial fair value less unamortized debt discount and issuance costs on its consolidated balance sheets. For further information on the Convertible Senior Notes, see Note 7.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisition (Notes)

12 Months Ended

Jul. 31, 2022

Business Combinations [Abstract]

Acquisition

Acquisitions

On August 18, 2021, the Company completed its acquisition of HazardHub, Inc. (“HazardHub”) for net cash consideration of approximately $53 million, subject to customary transaction adjustments, including $8.2 million of acquisition consideration holdback subject to service conditions over the next three years, which is being held in escrow and considered restricted cash. The escrow is included in the consolidated balance sheets in the amounts of $3.2 million in prepaid expenses and other current assets and of $5.0 million in other assets. HazardHub provides API-driven property risk insights to the property and casualty insurance industry through curation, analysis, and distillation of vast amounts of data to deliver a comprehensive, national catalog of risks that may damage or destroy property. The acquisition was accounted for as a business combination.

In conjunction with the purchase price allocation, the Company determined that HazardHub's separately identifiable intangible assets were acquired technology, customer relationships, and trademarks. The valuation models were based on estimates of future operating projections of HazardHub and rights to sell new products containing the acquired technology, as well as judgments on the discount rates used and other variables. The Company developed forecasts based on a number of factors, including future revenue and operating cost projections, a discount rate that is representative of the weighted average cost of capital, and royalty and long-term sustainable growth rates based on a market analysis. These fair value measurements were based on significant inputs that were not

observable in the market and thus represents a Level 3 measurement. The Company amortizes the acquired intangibles over their estimated useful lives as set forth in the table below.

The preliminary allocation of purchase price is pending the final working capital adjustment and is therefore subject to potential future measurement period adjustments. The measurement period will end no later than August 17, 2022. The preliminary allocation of the purchase consideration is as follows:


	Preliminary Purchase Price Allocation		Estimated Useful Lives
	(in thousands)		(in years)
Acquired assets, net of assumed liabilities	$	198
Acquired technology	9,700		5
Customer relationships	5,100		5
Trademarks	900		7
Goodwill	31,315
Deferred tax liability	(2,882)
Total preliminary purchase consideration	$	44,331

Goodwill of $31.3 million arising from the acquisition is primarily related to the acquired workforce, expected synergies, and the opportunity to sell into and expand the Company’s customer base. The goodwill recorded is not expected to be deductible for income tax purposes.

Pro forma and historical financial information has not been provided as the acquisition was not material to the consolidated financial statements.

Balance Sheet Components

12 Months Ended

Jul. 31, 2022

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Accounts Receivables, Net

Accounts receivable, net consists of the following (in thousands):


	July 31, 2022		July 31, 2021
Accounts receivable	$	144,156	$	105,125
Allowance for credit losses and revenue reserves	(359)		(1,057)
Accounts receivable, net	$	143,797	$	104,068

Allowance for Credit Losses and Revenue Reserves

Changes to the allowance for credit losses and revenue reserves consists of the following (in thousands):


Balance as of July 31, 2021	$	1,057
Net changes to credit losses(1)	2,957
Net changes to revenue reserves	(356)
Write-offs, net(1)	(3,299)
Balance as of July 31, 2022	$	359

(1)Includes $3.0 million due to a contract termination as a result of United States government sanctions on Russia.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	July 31, 2022		July 31, 2021
Prepaid expenses	$	24,273	$	20,330
Contract costs	14,843		13,365
Deferred costs	9,969		9,247
Deposits and other receivables	12,138		9,787
Prepaid expenses and other current assets	$	61,223	$	52,729

Property and Equipment, Net

Property and equipment consist of the following (in thousands):


	July 31, 2022		July 31, 2021
Computer hardware	$	14,472	$	19,256
Purchased software	5,124		6,002
Capitalized software development costs	38,724		24,025
Equipment and machinery	8,248		12,214
Furniture and fixtures	11,467		11,482
Leasehold improvements	59,059		57,960
Total property and equipment	137,094		130,939
Less accumulated depreciation	(56,354)		(50,878)
Property and equipment, net	$	80,740	$	80,061

As of July 31, 2022 and 2021, no property and equipment was pledged as collateral. Depreciation expense, excluding the amortization of capitalized software development costs, was $14.0 million, $14.0 million and $14.5 million for the fiscal years ended July 31, 2022, 2021, and 2020, respectively.

The Company recognized amortization of capitalized software development costs in cost of subscription and support revenue on the consolidated statements of operations of $6.3 million, $3.4 million and $1.4 million during the fiscal years ended July 31, 2022, 2021, and 2020 respectively.

Goodwill and Intangible Assets, Net

Changes in the carrying amount of goodwill were as follows (in thousands):


Goodwill, July 31, 2021	$	340,877
Addition — HazardHub acquisition	31,315
Goodwill, July 31, 2022	$	372,192

The Company’s intangible assets are amortized over their estimated useful lives. Intangible assets consist of the following (in thousands):


		July 31, 2022						July 31, 2021
	Remaining Weighted-Average Useful Life (in years)	Cost		Accumulated Amortization		Net Book Value		Cost		Accumulated Amortization		Net Book Value
Acquired technology	3.5	$	38,100	$	28,826	9,274		$	93,600	$	86,367	$	7,233
Customer contracts and related relationships	3.5	23,100		12,653		10,447		35,700		24,432		11,268
Partner relationships	2.7	200		141		59		200		119		81
Trademarks	4.1	3,400		1,819		1,581		2,500		1,339		1,161
Order backlog	—	—		—		—		8,700		8,700		—
Total	3.6	$	64,800	$	43,439	$	21,361	$	140,700	$	120,957	$	19,743

Amortization expense was $14.1 million, $20.0 million, and $26.8 million during the years ended July 31, 2022, 2021, and 2020, respectively. The future amortization expense for existing intangible assets as of July 31, 2022, based on their current useful lives, is as follows (in thousands):


Fiscal year ending July 31,
2023	6,888
2024	5,468
2025	5,026
2026	3,572
2027	272
Thereafter	135
Total future amortization expense	$	21,361

Other Assets

Other assets consist of the following (in thousands):


	July 31, 2022		July 31, 2021
Prepaid expenses	$	3,085	$	3,276
Contract costs	29,392		28,870
Deferred costs	1,256		2,777
Strategic equity investments	18,023		3,556
Other	4,976		—
Other assets	$	56,732	$	38,479

The Company’s other assets include strategic equity investments in privately-held companies in which the Company does not have a controlling interest or the ability to exert significant influence. The strategic investments consist of non-marketable equity securities that do not have readily determinable market values (Level 3). The Company records these strategic investments at cost less impairment and adjusts cost for subsequent observable changes in fair value. The Company invested $12.3 million and $2.4 million in new strategic equity investments during the fiscal year ended July 31, 2022 and 2021, respectively. An impairment charge of $10.7 million was recognized during the fiscal year ended July 31, 2020. No impairment charge was recognized during the fiscal years ended July 31, 2022 and 2021.

During the fiscal year ended July 31, 2022, the Company’s convertible debt investment was converted into equity shares due to a qualified equity financing event. The carrying value of the convertible debt investment was $1.1 million comprised of principal and accrued interest. An unrealized gain in the form of implied interest income of $1.6 million was recognized due to the conversion discount on the fair value of the shares. No unrealized gain or loss was recognized during the fiscal years ended July 31, 2021 and 2020.

Accrued Employee Compensation

Accrued employee compensation consists of the following (in thousands):


	July 31, 2022		July 31, 2021
Bonus	$	55,206	$	48,414
Commission	6,247		11,271
Vacation(1)	5,728		23,803
Salaries, payroll taxes, and benefits	23,781		18,649
Accrued employee compensation	$	90,962	$	102,137

(1)In the first quarter of fiscal year 2022, the Company paid out accrued vacation for employees in certain countries upon adopting a non-accrued vacation policy effective September 1, 2021.

Other Current Liabilities

Other current liabilities consist of the following (in thousands):


	July 31, 2022		July 31, 2021
Lease liabilities	$	12,238	$	11,624
Accrued royalties	10,575		7,525
Accrued taxes	6,566		6,796
Other	5,961		5,703
Other current liabilities	$	35,340	$	31,648

Net Income (Loss) per Share

12 Months Ended

Jul. 31, 2022

Earnings Per Share [Abstract]

Net Income (Loss) per Share

Net Income (Loss) Per Share

The Company calculates basic earnings per share by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. The diluted earnings per share is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period using the treasury stock method. For purposes of this calculation, options to purchase common stock, Stock Awards, and the Convertible Senior Notes are considered to be common stock equivalents.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the years ended July 31, 2022, 2021, and 2020 (in thousands, except share and per share amounts):


	Fiscal years ended July 31,
	2022		2021		2020
Numerator:
Net income (loss)	$	(180,431)	$	(66,507)	$	(27,198)
Net income (loss) per share:
Basic and diluted	$	(2.16)	$	(0.79)	$	(0.33)

Denominator:
Weighted average shares used in computing net income (loss) per share:
Basic and diluted	83,569,517		83,577,375		82,855,392

The following weighted average shares of potential common stock were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been anti-dilutive:


	Fiscal years ended July 31,
	2022	2021	2020
Stock options	24,206	37,980	161,410
Stock awards	1,836,455	2,737,597	2,559,214
Convertible senior notes	33,417	52,430	—

Since the Company has the intent and ability to settle the principal amount of the Convertible Senior Notes in cash and any excess in shares of the Company’s common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on net income per share, if applicable. The conversion spread will have a dilutive impact on net income (loss) per share when the average market price of the Company’s common stock for a given period exceeds the conversion price of $113.75 per share for the Convertible Senior Notes. Except for the first quarter in fiscal year 2022 and the second quarter in fiscal year 2021, the average market price of the Company’s common stock did not exceed the conversion price.

Convertible Senior Notes

12 Months Ended

Jul. 31, 2022

Debt Disclosure [Abstract]

Convertible Senior Notes

In March 2018, the Company offered and sold $400.0 million aggregate principal amount of its 1.25% Convertible Senior Notes due 2025. The Convertible Senior Notes were issued in accordance with the Indenture, dated as of March 13, 2018, between the Company and U.S. Bank National Association, as trustee (the “Trustee”) (the “Base Indenture”), as amended and supplemented by the First Supplemental Indenture, dated as of March 13, 2018, between the Company and the Trustee (together with the Base Indenture, the “Indenture”). The net proceeds from the issuance of the Convertible Senior Notes were $387.2 million, after deducting issuance costs.

The Convertible Senior Notes are unsecured obligations of the Company with interest payable semi-annually in arrears at a rate of 1.25% per year, on March 15th and September 15th of each year. The Convertible Senior Notes will mature on March 15, 2025 unless repurchased, redeemed, or converted prior to such date. Prior to the close of business on the business day immediately preceding October 15, 2024, the Convertible Senior Notes are convertible at the option of holders during certain periods, upon satisfaction of certain conditions. On or after October 15, 2024, the Convertible Senior Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Convertible Senior Notes will have an initial conversion rate of 8.7912 shares of common stock per $1,000 principal (equivalent to an initial conversion price of approximately $113.75 per share of the Company’s common stock). The conversion rate is subject to customary adjustments upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election.

The Company may redeem the Convertible Senior Notes, at its option, on or after March 20, 2022, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the three trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. No sinking fund is provided for the Convertible Senior Notes. Upon the occurrence of a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the Convertible Senior Notes for cash at a price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Convertible Senior Notes rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Senior Notes, and equal in right of payment to any of its indebtedness that is not so subordinated. The Convertible Senior Notes are effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of its current or future subsidiaries.

The net carrying value of the liability component, unamortized debt discount, and unamortized debt issuance costs of the Convertible Senior Notes was as follows (in thousands):


	July 31, 2022		July 31, 2021
Principal	$	400,000	$	400,000
Less unamortized:
Debt discount	37,253		50,198
Debt issuance costs	4,531		5,977
Net carrying amount	$	358,216	$	343,825

The effective interest rate of the Convertible Senior Notes is 5.53%. The following table sets forth the interest expense recognized related to the Convertible Senior Notes (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Contractual interest expense	$	5,000	$	5,000	$	5,000
Amortization of debt discount	12,945		12,310		11,705
Amortization of debt issuance costs	1,446		1,307		1,181
Total	$	19,391	$	18,617	$	17,886

Capped Call

In March 2018, the Company paid $37.2 million to purchase capped calls with certain financial institutions pursuant to capped call confirmations (the “Capped Calls”). The Capped Calls have an initial strike price of $113.75 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Convertible Senior Notes. The Capped Calls have initial cap prices of $153.13 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, 3.5 million shares of common stock. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price under the Convertible Senior Notes. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, tender offer, and a nationalization, insolvency, or delisting involving the Company. Additionally, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including change in law, insolvency filing, and hedging disruptions. The Capped Calls were recorded in the period purchased as a reduction of the Company’s additional paid-in capital in the accompanying consolidated balance sheets.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Leases

12 Months Ended

Jul. 31, 2022

Leases [Abstract]

Leases

The Company’s lease obligations consist of operating leases for office facilities and equipment, with lease periods expiring through fiscal year 2032. Some leases include one or more options to renew. Lease renewals are not assumed in the determination of the lease term until the exercise of the renewal option is deemed to be reasonably certain.

Components of operating lease costs were as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Operating lease costs (1)	$	15,992	$	17,614	$	15,275
Variable lease costs	5,496		5,017		5,821
Sublease income	(1,451)		(1,587)		(1,430)
Net operating lease costs	$	20,037	$	21,044	$	19,666

(1) Lease expense for leases with an initial term of 12 months or less is excluded from the table above and was $0.9 million, $1.0 million, $0.9 million for the fiscal years ended July 31, 2022, 2021, and 2020, respectively.

Future operating lease payments as of July 31, 2022 were as follows (in thousands):


Fiscal year ending July 31,
2023	$	16,669
2024	17,712
2025	17,869
2026	17,792
2027	17,370
Thereafter	49,423
Total future lease payments	136,835
Less imputed interest	(19,474)
Total lease liability balance	$	117,361

Supplemental information related to leases was as follows (in thousands, except for lease term and discount rate):


	As of July 31,
	2022			2021
Operating lease assets	$	90,287		$	97,447

Current portion of lease liabilities	12,238			11,624
Non-current portion of lease liabilities	105,123			115,374
Total lease liabilities	$	117,361		$	126,998

Weighted average remaining lease term (years)	7.65			8.74
Weighted average discount rate	4.00		%	4.20		%

Supplemental cash and non-cash information related to operating leases was as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Cash payments for operating leases	$	19,120	$	17,837	$	9,584
Operating lease assets obtained in exchange for operating lease liabilities	$	5,867	$	6,503	$	23,032

Commitments and Contingencies

12 Months Ended

Jul. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

The Company’s contractual obligations and commitments as of July 31, 2022 are as follows (in thousands):


	Lease Obligations(1)		Royalty Obligations(2)		Purchase Commitments(3)		Long Term Debt(4)		Total
Fiscal Year Ending July 31,
2023	$	16,669	$	4,138	$	57,715	$	5,000	$	83,522
2024	17,712		585		30,954		5,000		54,251
2025	17,869		292		8,926		405,000		432,087
2026	17,792		—		477		—		18,269
2027	17,370		—		—		—		17,370
Thereafter	49,423		—		—		—		49,423
Total	$	136,835	$	5,015	$	98,072	$	415,000	$	654,922

(1) Lease obligations primarily represent payments required under the Company’s non-cancellable lease agreements for the Company’s corporate headquarters and worldwide offices through 2032.

(2) Royalty obligations primarily represent the Company’s obligations under non-cancellable agreements related to software used in certain revenue-generating agreements.

(3) Purchase commitments represent commitments to purchase goods and services, entered into in the ordinary course of business, for which a penalty could be imposed if the agreement was cancelled for any reason other than an event of default as described by the agreement.

(4) Long-term debt consists of principal and interest payments on the Company’s Convertible Senior Notes. The $400 million in principal will be due in March 2025.

Legal Proceedings

From time to time, the Company is involved in various legal proceedings and receives claims, arising from the normal course of business activities. The Company has not recorded any accrual for claims as of July 31, 2022 and 2021, respectively. The Company has not accrued for estimated losses in the accompanying consolidated financial statements as the Company has determined that no provision for liability nor disclosure is required related to any claim against the Company because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. The Company expenses legal fees in the period in which they are incurred.

Indemnification

The Company sells software licenses and services to its customers under Software License Agreements (“SLA”) and Software Subscription Agreements (“SSA”). SLAs and SSAs contain the terms of the contractual arrangement with the customer and generally include certain provisions for defending the customer against any claims that the Company’s software infringes upon a patent, copyright, trademark, or other proprietary right of a third party. SLAs and SSAs also generally indemnify the customer against judgments, settlements, fines, penalties, costs, and expenses resulting from a claim (“Losses”) against the customer in the event the Company’s software is found to infringe upon such third-party rights.

The Company has not had to reimburse any of its customers for Losses related to indemnification provisions and no material claims against the Company were outstanding as of July 31, 2022 and 2021. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under various SLAs and SSAs, the Company cannot estimate the amount of potential future payments, if any, related to indemnification provisions.

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of these persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid.

Stock-Based Compensation Expense and Shareholders' Equity

12 Months Ended

Jul. 31, 2022

Stockholders' Equity and Stock-based Compensation [Abstract]

Stock-Based Compensation Expense and Shareholders' Equity

Stock-Based Compensation Expense and Shareholders’ Equity

Stock-Based Compensation Expense

Stock-based compensation expense related to stock options and Stock Awards is included in the Company’s consolidated statements of operations as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Stock-based compensation expense	$	138,156	$	116,222	$	102,191
Net impact of deferred stock-based compensation	(1,145)		(1,213)		(374)
Total stock-based compensation expense	$	137,011	$	115,009	$	101,817

Stock-based compensation expense is included in the following categories:
Cost of subscription and support revenue	$	14,614	$	11,231	$	7,575
Cost of license revenue	692		770		769
Cost of services revenue	22,951		21,809		20,816
Research and development	36,134		29,524		26,324
Sales and marketing	32,960		25,820		21,260
General and administrative	29,660		25,855		25,073
Total stock-based compensation expense	137,011		115,009		101,817
Tax benefit from stock-based compensation	26,151		31,891		28,360
Total stock-based compensation, net of tax effect	$	110,860	$	83,118	$	73,457

Total unrecognized stock-based compensation expense related to the Company’s stock options and Stock Awards as of July 31, 2022 is as follows:


	Unrecognized Expense (in thousands)		Weighted Average Expected Recognition Period (in years)
Stock Options	$	1,557	1.9
Stock Awards	265,475		2.5
Total unrecognized stock-based compensation expense	$	267,032

Stock Awards

A summary of the Company’s Stock Awards activity under the Company’s equity incentive plans is as follows:


	Stock Awards Outstanding
	Number of Stock Awards	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value(1) (in thousands)













Balance as of July 31, 2019	2,384,673	$	85.20	$	243,427
Granted	1,587,664	$	106.65
Released	(1,217,337)	$	82.73	$	121,915
Canceled	(309,302)	$	87.25
Balance as of July 31, 2020	2,445,698	$	99.34	$	287,761
Granted	1,429,325	$	111.22
Released	(1,167,291)	$	96.83	$	131,188
Canceled	(312,764)	$	103.22
Balance as of July 31, 2021	2,394,968	$	107.15	$	275,900
Granted	1,942,391	$	112.83
Released	(1,202,125)	$	107.29	$	118,669
Canceled	(349,881)	$	111.80
Balance as of July 31, 2022	2,785,353	$	110.47	$	216,478
Expected to vest as of July 31, 2022	2,785,353	$	110.47	$	216,478

(1)Aggregate intrinsic value at each period end represents the total market value of Stock Awards at the Company’s closing stock price of $77.72, $115.20, and $117.66 on July 31, 2022, 2021, and 2020, respectively. Aggregate intrinsic value for released Stock Awards represents the total market value of released Stock Awards at date of release.

Certain executives and employees of the Company received PSUs and TSR PSUs in addition to RSUs. PSUs awarded in fiscal years 2022 and 2021 will vest over three years with 50% vesting annually over the three year period and the remaining 50% vesting at the end of the third year. The TSR PSUs are subject to total shareholder return rankings of the Company’s common stock relative to the software companies in the S&P Index for a specified period or periods, and vest at the end of three years. The Company recognized stock-based compensation related to these performance-based and market-based stock awards of $14.7 million, $13.9 million, and $13.1 million in fiscal years 2022, 2021, and 2020, respectively.

Stock Options

A summary of stock option activity under the Company’s equity incentive plans is as follows:


	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1) (in thousands)
Balance as of July 31, 2019	216,727	$	34.10	5.2	$	14,733
Granted	—	$	—
Exercised	(132,573)	$	37.37		$	8,917
Canceled	(3,822)	$	10.99
Balance as of July 31, 2020	80,332	$	29.80	5.2	$	7,058
Granted	—
Exercised	(53,932)	$	36.00		$	3,986
Canceled	(1,122)	$	11.24
Balance as of July 31, 2021	25,278	$	17.39	5.0	$	2,472
Granted	60,900	$	71.67
Exercised	(10,472)	$	11.10		$	1,047
Canceled	—	$	—
Balance as of July 31, 2022	75,706	$	61.93	8.7	$	1,196
Vested and expected to vest as of July 31, 2022	75,706	$	61.93	8.7	$	1,196
Exercisable as of July 31, 2022	14,806	$	21.85	3.6	$	827

(1)Aggregate intrinsic value at each fiscal year end represents the difference between the Company’s closing stock price of $77.72, $115.20, and $117.66 on July 31, 2022, 2021, and 2020, respectively, and the exercise price of outstanding stock options. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price.

Valuation of Awards

Stock Options

The fair value of the stock options is estimated at the grant date using the Black-Scholes option-pricing model, which included the following assumptions:


			Fiscal year ended July 31,
			2022
Expected term (in years)			6.00
Risk-free interest rate			3.04% - 3.55%
Expected volatility			31.75% - 31.94%
Expected dividend yield			—%

There were no stock options granted during fiscal years 2021 and 2020.

TSR PSUs

The fair value of the TSR PSUs is estimated at the grant date using a Monte Carlo simulation model which included the following assumptions:


															Fiscal year ended July 31,
															2020
Expected term (in years)															2.90
Risk-free interest rate															1.46%
Expected volatility of the Company															28.4%
Average expected volatility of the peer companies in the S&P Index															37%
Expected dividend yield															—%

There were no TSR PSUs granted during fiscal years 2022 and 2021.

The number of TSR PSUs that may ultimately vest will vary based on the performance of the Company’s common stock relative to the shareholder return of the software companies in the S&P Index for a specified period or periods. The Monte Carlo methodology incorporates into the valuation all possible outcomes, including that the Company’s relative performance may result in no shares vesting. As a result, stock-based compensation expense is recognized regardless of the Company’s ultimate achievement of the plan’s metrics. The expense will be reversed only in the event that a grantee is terminated prior to satisfying the requisite service period.

Common Stock Reserved for Issuance

As of July 31, 2022 and 2021, the Company was authorized to issue 500,000,000 shares of common stock with a par value of $0.0001 per share and, of these, 84,084,209 and 83,194,157 shares of common stock were issued and outstanding, respectively. As of July 31, 2022 and 2021, the Company had reserved shares of common stock for future issuance as follows:


	July 31, 2022	July 31, 2021
Exercise of stock options to purchase common stock	75,706	25,278
Vesting of stock awards	2,785,353	2,394,968
Shares available under stock plans	3,360,659	5,014,069
Total common stock reserved for issuance	6,221,718	7,434,315

Equity Incentive Plans

On December 15, 2020, the Company’s stockholders adopted the 2020 Stock Plan (“2020 Plan”) for the purpose of granting equity-based incentive awards. The Company initially reserved 5,000,000 shares of its common stock for the issuance of awards under the 2020 Plan. The shares available for issuance are subject to adjustment in the event of a stock split, stock dividend or other defined changes in the Company’s capitalization. The 2020 Plan replaced the Company’s 2011 Stock Plan; however, awards outstanding under the 2011 Stock Plan will continue to be governed by their existing terms.

The shares the Company issues under the 2020 Plan will be from the Company's pool of authorized but unissued shares. The shares of common stock underlying any awards under the 2011 Stock Plan that are forfeited, canceled, held back upon exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without any issuance of stock or are otherwise terminated (other than by exercise) are added back to the shares of stock available for issuance under the 2020 Plan.

Share Repurchase Program

In October 2020, the Company's board of directors authorized and approved a share repurchase program of up to $200.0 million of the Company's outstanding common stock. Share repurchases under the program may be made from time to time, in the open market, in privately negotiated transactions and otherwise, at the discretion of management of the Company and in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act, and other applicable legal requirements. Such repurchases may also be made in compliance with Rule 10b5-1 trading plans entered into by the Company.

The share repurchase program was completed in the second quarter of fiscal year 2022. During the fiscal year ended July 31, 2022, the Company repurchased 322,545 shares of common stock at an average price of $116.11 per share, for an aggregate purchase price of $37.5 million. During the fiscal year ended July 31, 2021, the Company repurchased 1,488,991 shares of common stock at an average price of $109.17 per share, for an aggregate purchase price of $162.5 million.

Income Taxes

12 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

The Company recognized an income tax benefit of $49.3 million for fiscal year 2022 compared to an income tax benefit of $37.8 million for fiscal year 2021. The increase in the Company’s income tax benefit for fiscal year 2022 was primarily due to an increase in pre-tax net loss, an increase in research and development credits, and a decrease in valuation allowance, partially offset by decreases in tax benefits such as the tax deductions from stock-based compensation, the tax impact from the tax status change of certain foreign subsidiaries from the prior year, and the release of uncertain tax positions from the prior year.

The effective tax rate could differ from the statutory U.S. Federal income tax rate of 21% mainly due to state taxes, tax deficiencies related to stock-based compensation, research and development credits, foreign earnings taxed in the United States, change in valuation allowance and certain non-deductible expenses, including, but not limited to, executive compensation limitation.

The Company’s income (loss) before provision for (benefit from) income taxes is as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Domestic	$	(239,601)	$	(114,687)	$	(34,121)
International	9,886		10,406		9,790
Income (loss) before provision for (benefit from) income taxes	$	(229,715)	$	(104,281)	$	(24,331)

The provision for (benefit from) income taxes consisted of the following (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Current:
U.S. Federal	$	1,937	$	(5,605)	$	13,077
State	43		299		178
Foreign	1,852		3,290		1,539
Total current	3,832		(2,016)		14,794
Deferred:
U.S. Federal	(48,775)		(31,174)		(10,125)
State	(5,656)		(4,472)		(1,357)
Foreign	1,315		(112)		(445)
Total deferred	(53,116)		(35,758)		(11,927)
Total provision for (benefit from) income taxes	$	(49,284)	$	(37,774)	$	2,867

Differences between income taxes calculated using the statutory federal income tax rate of 21% in the fiscal years ended July 31, 2022, 2021, and 2020, and the provision for income taxes are as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020
Statutory federal income tax	$	(48,240)	$	(21,899)	$	(5,109)
State taxes, net of federal benefit	(5,613)		(4,173)		(1,179)
Stock-based compensation	2,912		(3,247)		(2,971)
Non-deductible officers' compensation	4,484		3,682		3,634
Foreign income taxed at different rates	(365)		(854)		(235)
Research tax credits	(6,820)		(5,377)		(4,905)
Base erosion and anti-abuse tax	349		(7,702)		11,381
Tax status change of certain foreign subsidiaries	1,201		(1,830)		—
Non-deductible acquisition costs	744		—		—

Permanent differences and others	476		495		829
Change in valuation allowance	1,588		3,131		1,422
Total provision for (benefit from) income taxes	$	(49,284)	$	(37,774)	$	2,867

The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities are as follows (in thousands):


	As of July 31,
	2022		2021
Accruals and reserves	$	27,632	$	15,773
Stock-based compensation	7,953		7,133
Deferred revenue	1,794		3,527
Capitalized R&D	7,158		8,377
Lease liabilities	27,525		30,832
Net operating loss carryforwards	110,064		73,243
Tax credits	113,357		97,113
Total deferred tax assets	295,483		235,998
Less valuation allowance	52,133		44,797
Net deferred tax assets	243,350		191,201
Less deferred tax liabilities:
Intangible assets	8,888		4,109
Operating lease assets	20,706		23,343
Property and equipment	6,161		7,661
Convertible debt	5,250		7,028
Unremitted foreign earnings	710		554
Capitalized commissions	10,174		10,078
Total deferred tax liabilities	51,889		52,773
Deferred tax assets, net	191,461		138,428

Less foreign deferred tax liabilities	1,910		1,045
Total net deferred tax assets	189,551		137,383

The Company considered both positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, differences between prior book and tax profits/losses, and results of future operations, and determined that a valuation allowance was not required for a significant portion of its deferred tax assets. A valuation allowance of $52.1 million and $44.8 million remained as of July 31, 2022 and 2021, respectively, primarily related to California, Federal and Canada deferred tax assets. The increase of $7.3 million in the valuation allowance in the current fiscal year relates primarily to net operating losses, and income tax credits in certain tax jurisdictions for which no tax benefit is expected to be recognized.

As of July 31, 2022, the Company had U.S. Federal, California, and other states net operating loss (“NOL”) carryforwards of $438.4 million, $68.8 million and $229.2 million, respectively. The U.S. Federal and California NOL carryforwards will start to expire in 2029 and 2023, respectively.

As of July 31, 2022, the Company had research and development tax credits (“R&D credit”) carryforwards of the following (in thousands):


U.S. Federal	$	60,056
California	50,310
Total R&D credit carryforwards	$	110,366

The U.S. Federal R&D credits will start to expire in 2023 and the California R&D tax credits do not expire.

Federal and California laws impose restrictions on the utilization of NOL carryforwards and R&D credit carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code 382 and 383. The Company experienced an ownership change in the past that does not materially impact the availability of its carryforwards. However, should there be an ownership change in the future, the Company’s ability to utilize existing carryforwards could be substantially restricted.

As of July 31, 2022, the Company has recorded a provisional estimate for foreign withholding taxes on undistributed earnings from foreign subsidiaries of $0.7 million. The Company may repatriate foreign earnings in the future to the extent that the repatriation is not restricted by local laws or there are no substantial incremental costs associated with such repatriation.

The Tax Act amended Internal Revenue Code Section 174 to require that specific research and experimental (“R&E”) expenditures be capitalized and amortized over five years (U.S. R&E) or fifteen years (non-U.S. R&E) beginning in the Company’s fiscal year 2023. Although Congress has considered legislation that would defer, modify or repeal the capitalization and amortization requirement, there is no assurance that the provision will be deferred, repealed, or otherwise modified. If the requirement is not modified, the Company may be required to utilize some of its federal and state tax attributes and there may be increases to state cash taxes or tax expense.

Unrecognized Tax Benefits

Activity related to unrecognized tax benefits is as follows (in thousands):


	Fiscal years ended July 31,
	2022		2021		2020

Unrecognized tax benefits - beginning of period	$	17,138	$	23,690	$	11,633
Gross increases - prior period tax positions	147		65		3,401
Gross decreases - prior period tax positions	—		(7,769)		(147)
Gross increases - current period tax positions	1,501		1,152		8,803

Unrecognized tax benefits - end of period	$	18,786	$	17,138	$	23,690

During the year ended July 31, 2022, the Company’s unrecognized tax benefits increased by $1.6 million. As of July 31, 2022, the Company had unrecognized tax benefits of $11.8 million that, if recognized, would affect the Company’s effective tax rate, as certain unrecognized tax benefits have a valuation allowance. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense in its consolidated statements of operations. As of July 31, 2022, the Company has accrued total interest and penalties related to unrecognized tax benefits of $0.8 million.

The Company, or one of its subsidiaries, files income taxes in the U.S. Federal jurisdiction and various state and foreign jurisdictions. If the Company utilizes NOL carryforwards or tax credits in future years, the U.S. Federal, state and local, and non-U.S. tax authorities may examine the tax returns covering the period in which the net operating losses and tax credits arose. As a result, the Company’s tax returns in the U.S. and California remain open to examination from fiscal years 2002 through 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Defined Contribution and Other Post-Retirement Plans	12 Months Ended
Defined Contribution and Other Post-Retirement Plans	Jul. 31, 2022
Retirement Benefits [Abstract]
Defined Contribution and Other Post-Retirement Plans	Defined Contribution and Other Post-Retirement PlansThe Company’s employee savings and retirement plan in the United States is qualified under Section 401(k) of the Internal Revenue Code. Employees on the Company’s U.S. payroll are automatically enrolled when they meet eligibility requirements, unless they decline participation. Upon enrollment employees are provided with tax-deferred salary deductions and various investment options. Employees may contribute up to 60% of their eligible salary up to the statutory prescribed annual limit. The Company matches employees’ contributions up to $5,000 per participant per calendar year. Certain of the Company’s foreign subsidiaries also have defined contribution plans in which a majority of its employees participate and the Company makes matching contributions. The Company’s contributions to its 401(k) and foreign subsidiaries’ plans were $13.1 million, $11.8 million, and $10.7 million for the fiscal years ended July 31, 2022, 2021, and 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Segment Information

12 Months Ended

Jul. 31, 2022

Segment Reporting [Abstract]

Segment Information

The Company operates in one segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews separate revenue information for the Company’s subscription, support, term license, perpetual license, and services offerings, as well as revenue by geographic region, while all other financial information is reviewed on a consolidated basis. The Company’s principal operations and decision-making functions are located in the United States.

The Company’s long-lived assets for this disclosure are defined as property and equipment and operating lease assets. The Company’s long-lived assets by geographic region are as follows (in thousands):


	July 31, 2022		July 31, 2021
Americas	$	133,939	$	143,736
EMEA	31,230		32,171
APAC	5,858		1,601
Total	$	171,027	$	177,508

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Jul. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsIn September 2022, the Company's board of directors authorized and approved a share repurchase program of up to $400.0 million of the Company’s outstanding shares of common stock. Share repurchases under the program may be made from time to time, in the open market, in privately negotiated transactions and otherwise, at the discretion of management of the Company and in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act, and other applicable legal requirements. Such repurchases may also be made in compliance with Rule 10b5-1 trading plans entered into by the Company.

The Company and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jul. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Company

Basis of Presentation and Consolidation

Use of Estimates

Foreign Currency

Cash and Cash Equivalents

Cash and Cash EquivalentsCash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. Cash equivalents primarily consist of commercial paper and money market funds.

Investments

Property and Equipment

Property, Equipment, and Software Development Costs

The estimated useful lives of property and equipment are as follows:


Computer hardware						3 years
Purchased software						3 years
Software development						3 to 5 years
Equipment and machinery						3 to 5 years
Furniture and fixtures						5 years
Leasehold improvements						Shorter of 10 years or remaining lease term

Software Development Costs

Leases

Operating leases are included in operating lease assets, other current liabilities, and lease liabilities on the consolidated balance sheets.

Impairment of Long-Lived Assets, Intangible Assets and Goodwill