View Filing Data

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Jan. 31, 2012	Feb. 29, 2012
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Entity Registrant Name	Guidewire Software, Inc.
Entity Central Index Key	0001528396
Current Fiscal Year End Date	--07-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		51,275,725

Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 31, 2012	Jul. 31, 2011
ASSETS
Cash and cash equivalents	$ 169,633	$ 59,625
Restricted cash, current portion	3,834	2,230
Accounts receivable	34,602	23,278
Deferred tax asset, current portion	2,203	6,044
Other current assets	4,960	3,665
Total current assets	215,232	94,842
Property and equipment, net	4,264	4,455
Restricted cash, net of current portion	2,215	3,820
Deferred tax asset, net of current portion	22,073	22,073
Other assets	1,068	1,350
TOTAL ASSETS	244,852	126,540
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	5,905	4,317
Accrued employee compensation	14,763	18,112
Deferred revenues, current portion	46,396	48,482
Litigation provision obligation		10,000
Other current liabilities	3,781	1,390
Total current liabilities	70,845	82,301
Deferred revenues, net of current portion	14,992	25,313
Other liabilities	241	774
Total liabilities	86,078	108,388
STOCKHOLDERS' EQUITY :
Common stock	5	1
Additional paid-in capital	189,036	20,231
Accumulated other comprehensive loss	(399)	(209)
Accumulated deficit	(29,868)	(38,371)
Total stockholders' equity	158,774	18,152
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 244,852	126,540
Convertible preferred stock [Member]
STOCKHOLDERS' EQUITY :
Convertible preferred stock		$ 36,500

Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Consolidated Statements Of Income - USD ($) $ in Thousands	Jan. 31, 2012	Jan. 31, 2011	Jan. 31, 2012	Jan. 31, 2011
Revenues:
License	$ 25,729	$ 20,000	$ 46,544	$ 30,153
Maintenance	6,805	5,210	13,911	9,820
Services	22,563	17,127	47,022	37,034
Total revenues	55,097	42,337	107,477	77,007
Cost of revenues:
License	234	131	533	332
Maintenance	1,197	1,014	2,463	1,900
Services	19,310	15,276	37,235	29,381
Total cost of revenues	20,741	16,421	40,231	31,613
Gross profit:
License	25,495	19,869	46,011	29,821
Maintenance	5,608	4,196	11,448	7,920
Services	3,253	1,851	9,787	7,653
Total gross profit	34,356	25,916	67,246	45,394
Operating expenses:
Research and development	12,162	8,212	23,121	15,731
Sales and marketing	9,198	7,056	16,559	12,602
General and administrative	7,639	5,204	14,077	9,832
Total operating expenses	28,999	20,472	53,757	38,165
Income from operations	5,357	5,444	13,489	7,229
Interest income, net	73	75	113	112
Other income (expense), net	(319)	(9)	(635)	184
Income before provision for income taxes	5,111	5,510	12,967	7,525
Provision for income taxes	1,420	74	4,464	199
Net income	$ 3,691	$ 5,436	$ 8,503	$ 7,326
Net income per share:
Basic	$ 0.07	$ 0.12	$ 0.19	$ 0.15
Diluted	$ 0.06	$ 0.11	$ 0.15	$ 0.14
Shares used in computing net income per share:
Basic	18,433,369	14,048,030	16,499,660	13,960,587
Diluted	25,610,201	16,357,081	23,387,583	16,202,034

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2012	Jan. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 8,503	$ 7,326
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,364	621
Stock-based compensation	9,604	2,483
Deferred tax assets	3,841
Changes in operating assets and liabilities:
Accounts receivable	(11,565)	(5,082)
Prepaid expenses and other assets	(529)	(777)
Accounts payable	395	62
Accrued employee compensation	(3,215)	(6,332)
Other liabilities	(8,756)	(414)
Deferred revenues	(11,910)	3,043
Net cash provided by (used in) operating activities	(12,268)	930
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(1,000)	(1,512)
Increase in restricted cash		(1,605)
Net cash used in investing activities	(1,000)	(3,117)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon exercise of stock options	2,497	281
Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commission	123,046
Costs paid in connection with initial public offering	(1,689)
Net cash provided by financing activities	123,854	281
Effect of foreign exchange rate changes on cash and cash equivalents	(578)	889
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	110,008	(1,017)
CASH AND CASH EQUIVALENTS-Beginning of period	59,625	37,411
CASH AND CASH EQUIVALENTS-End of period	169,633	36,394
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	1	33
Cash paid for income taxes	1,142	$ 991
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES:
Unpaid offering costs	1,149
Conversion of convertible preferred stock into common stock upon initial public offering	$ 36,500

The Company And Summary Of Significant Accounting Policies And Estimates

6 Months Ended

Jan. 31, 2012

The Company And Summary Of Significant Accounting Policies And Estimates [Abstract]

The Company And Summary Of Significant Accounting Policies And Estimates

1. The Company and Summary of Significant Accounting Policies and Estimates

Business

Guidewire Software, Inc., along with its subsidiaries (the "Company") was incorporated under the laws of the State of Delaware on September 20, 2001. The Company provides Internet-based software platforms for core insurance operations, including underwriting and policy administration, claim management and billing. The Company's customers include insurance carriers for property and casualty and workers' compensation insurance. The Company has wholly owned subsidiaries in Australia, Canada, France, Germany, Hong Kong, Italy, Ireland, Japan and the United Kingdom.

The Company offers a suite of applications to enable core property and casualty ("P&C") insurance operations comprised of the following products: PolicyCenter, ClaimCenter and BillingCenter. The Company also provides maintenance support and provides professional services to the extent requested by its customers.

Initial Public Offering

On January 30, 2012, the Company closed its initial public offering ("IPO") whereby 10,177,500 shares of common stock were sold to the public, including the underwriters' overallotment option of 1,327,500 shares of common stock, at a price of $13.00 per share. The Company received aggregate proceeds of approximately $123.0 million from the initial public offering, including the exercise of the underwriters' overallotment option, net of underwriters' discounts and commissions, but before deduction of offering expenses of approximately $3.7 million. Upon the closing of the IPO, all shares of the Company's outstanding convertible preferred stock automatically converted into 25,357,721 shares of common stock, and outstanding warrants to purchase 69,529 shares of convertible preferred stock at $5.03 per share remain outstanding and are contractually adjusted to purchase 69,529 shares of common stock at $5.03 per share. As of January 31, 2012, the Company had 51,275,725 shares of common stock issued and outstanding.

Basis of Presentation

The unaudited condensed consolidated financial statements and accompanying notes of the Company reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending July 31, 2012. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission ("SEC").

These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and related notes, together with management's discussion and analysis of financial condition and results of operations, presented in the Company's final prospectus filed with the SEC on January 25, 2012 pursuant to Rule 424(b) of the Securities Act of 1933. There have been no changes in the Company's significant accounting policies from those that were disclosed in the Company's audited consolidated financial statements for the fiscal year ended July 31, 2011 included in the Company's final prospectus for its IPO.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition, the useful lives of property and equipment, allowance for doubtful accounts, valuation allowance for deferred tax assets, stock-based compensation, annual bonus attainment, income tax uncertainties and contingencies. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates.

Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, principally cash equivalents, accounts receivable, restricted cash and accounts payable approximated their fair values due to the short period of time to maturity or repayment. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows:

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

Level II—Inputs other than quoted prices included within Level I 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 III—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company's cash equivalents and restricted cash are classified as Level I because they are valued using quoted market prices.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high quality financial institutions with investment grade ratings. The Company markets its products and services in the United States and in foreign countries through its direct sales force.

One customer accounted for 14% of the Company's revenues for the three months ended January 31, 2011 related to a perpetual license arrangement, and no other customer accounted for 10% or more of the Company's revenues for the six months ended January 31, 2011 and the three and six months ended January 31, 2012. The Company had one customer that accounted for 12% of total accounts receivable as of July 31, 2011. The Company had another customer that accounted for 11% of total accounts receivable as of January 31, 2012.

Accounts Receivable and Allowance for Doubtful Accounts

The Company performs ongoing credit evaluations of its customers. Accounts receivable are recorded at invoiced amounts, net of the Company's estimated allowances for doubtful accounts. The allowance for doubtful accounts is estimated based on an assessment of the Company's ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances and current economic conditions that may affect a customer's ability to pay. In cases where the Company is aware of circumstances that may impair a specific purchaser's ability to meet their financial obligations, the Company records a specific allowance against amounts due from the customer and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. There is judgment involved with estimating the Company's allowance for doubtful accounts and if the financial condition of its customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. The Company writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable. The Company's accounts receivable are not collateralized by any security. There has been no allowance for doubtful accounts as of July 31, 2011 and January 31, 2012.

Revenue Recognition

The Company enters into arrangements to deliver multiple products or services (multiple-elements). The Company applies software revenue recognition rules and allocates the total revenues among elements based on vendor-specific objective evidence, or VSOE, of fair value of each element. The Company recognizes revenue on a net basis excluding taxes collected from customers and remitted to government authorities.

Revenues are derived from three sources:

(i)

License fees, related to term (or time-based) and perpetual software license revenue;

(ii)

Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if available during the maintenance term; and

(iii)

Services fees, related to professional services related to implementation of our software, reimbursable travel and training.

Revenues are recognized when all of the following criteria are met:

•

Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period.

•

Delivery or performance has occurred. The Company's software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials.

•

Fees are fixed or determinable. Arrangements where a significant portion of the fee is due beyond 90 days from delivery are not considered to be fixed or determinable. Revenues from such arrangements is recognized as payments become due, assuming all other revenue recognition criteria have been met. Fees from term licenses are generally due in annual installments over the term of the agreement beginning on the effective date of the license. Accordingly, fees from term licenses are not considered to be fixed or determinable until they become due.

•

Collectability is probable. Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from 30 to 90 days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied.

VSOE of fair value does not exist for the Company's software licenses; therefore, for all arrangements that do not include services that are essential to the functionality of the software the Company allocates revenues to software licenses using the residual method. Under the residual method, the amount recognized for license fees is the difference between the total fixed and determinable fees and the VSOE of fair value for the undelivered elements under the arrangement.

The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for those elements when sold separately. VSOE of fair value for maintenance is established using the stated maintenance renewal rate in the customer's contract. The Company generally enters into term licenses ranging from 3 to 7 years. For term licenses with a duration of one year or less, no VSOE of fair value for maintenance exists. The Company began using stated maintenance renewal rates in customers' contracts during fiscal year 2008. Prior to that, customers' contracts did not have stated maintenance renewal rates and the Company was unable to establish VSOE of maintenance. VSOE of fair value for services is established if a substantial majority of historical stand-alone selling prices for a service fall within a reasonably narrow price range.

If VSOE of fair value for one or more undelivered elements does not exist, the total arrangement fee is not recognized until delivery of those elements occurs or when VSOE of fair value is established.

If the undelivered elements are all service elements and VSOE of fair value does not exist for one or more service element, the total arrangement fee is recognized ratably over the longest service period starting at software delivery, assuming all the related services have been made available to the customer.

When implementation services are sold with a license arrangement, we evaluate whether those services are essential to the functionality of the software. Prior to fiscal year 2008, implementation services were determined to be essential to the software because the implementation services were generally not available from other third party vendors. By the beginning of fiscal year 2008, third party vendors were providing implementation services for ClaimCenter and it was concluded that implementation services generally were not essential to the functionality of the ClaimCenter software. By the beginning of fiscal year 2011, third party vendors were providing implementation services for PolicyCenter and BillingCenter and it was concluded that implementation services were no longer essential to the functionality of the PolicyCenter and BillingCenter software.

In cases where professional services are deemed to be essential to the functionality of the software, the arrangement is accounted for using contract accounting until the essential services are complete. If reliable estimates of total project costs and the extent of progress toward completion can be made, the Company applies the percentage-of-completion method in recognizing the arrangement fee. The percentage toward completion is measured by using the ratio of service billings to date compared to total estimated service billings for the consulting services. Service billings approximate labor hours as an input measure since they are billed monthly on a time and material basis. For term licenses with license fees due in equal installments over the term, the license revenues subject to percentage of completion recognition includes only those payments that are due and payable within the reporting period. The fees related to the maintenance are recognized over the period the maintenance is provided.

When VSOE for maintenance has not been established and the arrangement includes implementation services are deemed essential to the functionality of the software and it is reasonably assured that no loss will be incurred under the arrangement, revenues are recognized pursuant to the zero gross margin method. Under this method, revenues recognized are limited to the costs incurred for the implementation services. As a result, billed license and maintenance fees and the profit margin on the professional services are generally deferred until the essential services are completed and then recognized over the remaining term of the maintenance period.

If the Company cannot make reliable estimates of total project implementation and it is reasonably assured that no loss will be incurred under such arrangements, the zero profit margin method is applied whereby an amount of revenues equal to the incurred costs of the project is recognized as well as the incurred costs, producing a zero margin until project estimates become reliable. The percentage-of-completion method is applied when project estimates become reliable, resulting in a cumulative effect adjustment for deferred license revenues to the extent of progress toward completion, and the related deferred professional service margin is recognized in full as revenues. Such cumulative effect adjustment for license revenues was $0.3 million and $0.4 million for the three and six months ended January 31, 2011, respectively, and $0.8 million for each of the three and six months ended January 31, 2012, and for service revenues was $0.2 million and $0.3 million for the three and six months ended January 31, 2011, respectively, and $0.7 million for each of the three and six months ended January 31, 2012.

Deferred Revenues

Deferred revenues represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The current portion of deferred revenues represents the amount that is expected to be recognized as revenues within one year from the balance sheet date. The Company generally invoices fees for licenses and maintenance to its customers in annual installments payable in advance. Accordingly, the deferred revenues balance does not represent the total contract value of annual or multi-year, non-cancellable arrangements.

Sales Commissions

Sales commissions are recognized as an expense when earned by the sales representative, generally occurring at the time the customer order is signed. Substantially all of the effort by the sales force is expended through the time of closing the sale, with limited to no involvement thereafter.

Product Development Costs

Certain software development costs incurred subsequent to the establishment of technological feasibility are subject to capitalization and are amortized over the estimated lives of the related products. Technological feasibility is established upon completion of a working model. Through January 31, 2012, costs incurred subsequent to the establishment of technological feasibility have been immaterial, and therefore, all software development costs have been charged to research and development expense in the accompanying consolidated statements of income as incurred.

Stock-Based Compensation

The Company recognizes compensation expense related to its stock options and restricted stock units ("RSUs") granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures. The RSUs are subject to time-based vesting, which generally occurs over a period of four years, and a performance-based condition, which will be satisfied upon the first to occur of the sale of our business or 180 days after our initial public offering, which occurred on January 24, 2012. If an employee terminates employment from the Company prior to the occurrence of the performance-based condition, the employee does not forfeit the RSUs to the extent the time-based vesting requirements were satisfied prior to termination. The awards expire 10 years from the grant date. We estimate the grant date fair value, and the resulting stock-based compensation expense, of our stock options using the Black-Scholes option-pricing model. The grant date fair value of the stock-based awards is generally recognized using the accelerated multiple option approach over the requisite service period, which is generally the vesting period of the respective awards. Compensation cost for RSUs is generally recognized over the time-based vesting period regardless of the occurrence of the performance-based condition since this condition is not subject to employment.

Net Income per Share Attributable to Common Stockholders

The Company's basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, convertible preferred stock, options to purchase common stock and restricted stock units are considered to be common stock equivalents.

Because the Company has issued securities other than common stock that participate in dividends with the common stock, or participating securities, it is required to apply the two-class method to compute the net income per share attributable to common stockholders. The Company determined that it has participating securities in the form of noncumulative convertible preferred stock that share in dividends with common stock. The two-class method requires that the Company calculate the net income per share using net income attributable to the common stockholders which will differ from the Company's net income. Net income attributable to the common stockholders is generally equal to the net income less assumed periodic preferred stock dividends with any remaining earnings, after deducting assumed dividends, to be allocated on a pro rata basis between the outstanding common and preferred stock as of the end of each period.

Recent Accounting Pronouncements

In June 2011, authoritative guidance that addresses the presentation of comprehensive income in interim and annual reporting of financial statements was issued. The guidance is intended to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. Such changes in stockholders' equity will be required to be disclosed in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively for all periods presented. Early adoption is permitted. This new guidance impacts how the Company reports its comprehensive income only, and will have no effect on its results of operations, financial position or liquidity upon its required adoption by the Company on August 1, 2012.

Fair Value Of Financial Instruments

6 Months Ended

Jan. 31, 2012

Fair Value Of Financial Instruments[Abstract]

Fair Value Of Financial Instruments

2. Fair Value of Financial Instruments

The following table summarizes the Company's financial instruments measured at fair value on a recurring basis:


	July 31, 2011		January 31, 2012
	(in thousands)
Money market funds	$	5,006	$	5,008
Certificates of deposit		6,049		6,049

Total	$	11,055	$	11,057

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

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-SubTopic 10
-Section 50
-Paragraph 28
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

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-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Property And Equipment

6 Months Ended

Jan. 31, 2011

Property And Equipment [Abstract]

Property And Equipment

3. Property and Equipment

Property and equipment consist of the following:


	July 31, 2011			January 31, 2012
	(in thousands)
Computer hardware	$	6,031		$	6,537
Software		3,207			3,291
Furniture and fixtures		239			301
Leasehold improvements		1,026			1,218

Total property and equipment		10,503			11,347
Less accumulated depreciation and amortization		(6,048	)		(7,083	)

Property and equipment, net	$	4,455		$	4,264

As of July 31, 2011 and January 31, 2012, no property and equipment was pledged as collateral against borrowings. Amortization of leasehold improvements is included in depreciation expense. Depreciation expense was $1.5 million and $1.2 million during the year ended July 31, 2011 and the six months ended January 31, 2012, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Accrued Employee Compensation

6 Months Ended

Jan. 31, 2012

Accrued Employee Compensation [Abstract]

Accrued Employee Compensation

4. Accrued Employee Compensation

Accrued employee compensation consists of the following:


	July 31, 2011		January 31, 2012
	(in thousands)
Accrued bonuses	$	9,035	$	5,318
Accrued commission		2,780		2,005
Accrued vacation		4,712		4,672
Payroll accruals		1,585		2,768

Total	$	18,112	$	14,763

Net Income Per Share

6 Months Ended

Jan. 31, 2012

Net Income Per Share [Abstract]

Net Income Per Share

5. Net Income per Share

The following table sets forth the computation of the Company's basic and diluted net income per share under the two-class method (applied through January 25, 2012, the date of the conversion of the convertible preferred stock) attributable to common stockholders during the three and six months ended January 31, 2011 and 2012:


	Three Months Ended January 31,						Six Months Ended January 31,
	2011			2012			2011			2012
	(in thousands, except share and per share amounts)
Numerator:
Net income	$	5,436		$	3,691		$	7,326		$	8,503
Non-cumulative dividends to preferred stockholders		(823	)		(751	)		(1,645	)		(1,574	)
Undistributed earnings allocated to preferred stockholders		(2,968	)		(1,637	)		(3,655	)		(3,858	)

Net income, basic		1,645			1,303			2,026			3,071
Adjustments to net income for dilutive options and restricted stock options		164			239			196			545

Net income, diluted	$	1,809		$	1,542		$	2,222		$	3,616

Net income per share:
Basic	$	0.12		$	0.07		$	0.15		$	0.19

Diluted	$	0.11		$	0.06		$	0.14		$	0.15

Denominator:
Weighted average shares used in computing net income per share:
Basic		14,048,030			18,433,369			13,960,587			16,499,660
Weighted average effect of diluted stock options		1,942,734			3,565,468			1,977,680			3,597,819
Weighted average effect of dilutive restricted stock units		366,317			3,559,165			263,767			3,248,528
Weighted average effect of dilutive stock warrants ⁽¹⁾		—			52,199			—			41,576

Diluted		16,357,081			25,610,201			16,202,034			23,387,583

⁽¹⁾	Series C convertible preferred stock warrants were automatically converted to equivalent common stock warrants upon the Company's initial public offering on January 24, 2012.

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share for the periods presented because including them would have been antidilutive:


	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2012		2011		2012
Stock options to purchase common stock		3,150,979		788,238		3,565,349		649,263
Stock warrants ⁽¹⁾		69,529		—		69,529		—
Restricted stock units		3,538		—		1,910		—

⁽¹⁾	Series C convertible preferred stock warrants were automatically converted to equivalent common stock warrants upon the Company's initial public offering on January 24, 2012.

Commitments And Contingencies

6 Months Ended

Jan. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

6. Commitments and Contingencies

Leases

The Company leases certain facilities and equipment under operating leases. The Company entered into an operating lease agreement in September 2007 for its corporate headquarters in California that expires in July 2012. In connection with the lease, the Company opened a letter of credit currently held with Silicon Valley Bank. On November 23, 2009, the Company entered into a sublease agreement for additional conference space which will expire in July 2012. On December 5, 2011, the Company entered into a seven-year lease for a facility to serve as its corporate headquarters, located in Foster City, California, for approximately 97,644 square feet of space commencing August 1, 2012.

Lease expense for all worldwide facilities and equipment, which is being recognized on a straight-line basis over terms of the various leases, was $0.8 million and $1.0 million during the three months ended January 31, 2011 and 2012, respectively, and $1.8 million and $1.9 million for the six months ended January 31, 2011 and 2012, respectively. This expense was reduced by sublease income of $0.3 million for each of the three months ended January 31, 2011 and 2012, respectively, and $0.6 million for each of the six months ended January 31, 2011 and 2012.

The following table summarizes future commitments and obligations under noncancelable operating leases, to be satisfied as they become due over their terms, as of January 31, 2012 (in thousands):


Fiscal Year Ending July 31,	Lease Payments		Contractual Sublease Income
2012	$	2,573	$	1,160
2013		2,827		—
2014		4,238		—
2015		4,363		—
2016 and thereafter		18,555		—

Total	$	32,556	$	1,160

Legal Proceedings

In December 2007, Accenture Global Services GmbH and Accenture LLP filed a lawsuit against the Company in the U.S. Federal District Court for the District of Delaware, or the Delaware Court (Accenture Global Services GmbH and Accenture LLP v. Guidewire Software, Inc., Case No 07-826-SLR). Accenture has alleged infringement of U.S. Patent Nos. 7,013,284 and 7,017,111 by the Company's products; trade-secret misappropriation; and tortious interference with business relations. The Company denied Accenture's claims, and it asserted counterclaims seeking a declaration that our products do not infringe either patent, that both patents are invalid and that U.S. Patent No. 7,013,284 is unenforceable. The Company also asserted counterclaims against Accenture for breach of contract and trade secret misappropriation.

In November 2009, Accenture filed an additional lawsuit against the Company in the Delaware Court (Accenture Global Services GmbH, and Accenture LLP v. Guidewire Software, Inc., Case No. 09-848-SLR) alleging infringement of U.S. Patent No. 7,617,240 by our products. The Company filed a response denying Accenture's allegations and later amended that response to allege inequitable conduct against Accenture in obtaining U.S. Patent No. 7,617,240.

In March 2010, the Delaware Court ruled on claim construction of U.S. Patent No. 7,017,111 and as a result of that ruling Accenture stated that it would not pursue U.S. Patent No. 7,017,111 at trial against the Company, although Accenture retained its rights to appeal the claim construction ruling. In February 2011, the USPTO issued a third and final office re-examination action rejecting all claims in U.S. Patent No. 7,617,240. In March 2011, the USPTO granted a third re-examination against U.S. Patent No. 7,013,284, after having rejected all claims in U.S. Patent No. 7,013,284 on two prior re-examinations. On May 31, 2011, the Delaware Court granted the Company's motion for summary judgment finding that Accenture's U.S. Patent Nos. 7,013,284 and 7,017,111 are invalid based on unpatentable subject matter. On June 22, 2011, the Delaware Court approved the parties Stipulation and Partial Dismissal under which Accenture's claims for U.S. Patent Nos. 7,017,111 and 7,617,240 and all of its other claims were dismissed, with prejudice, excepting claims for U.S. Patent No. 7,013,284, and the Company's claims against Accenture were dismissed, as well. In July 2011, Accenture filed an appeal to the Federal Circuit Court of Appeals of the Delaware Court's judgment of invalidity of U.S. Patent No. 7,013,284.

On June 23, 2011, the Company filed a lawsuit against Accenture in the U.S. District Court for the Eastern District of Virginia (Guidewire Software, Inc. v. Accenture PLC, Accenture Insurance Services LLC and Accenture LLP, Case No. 1:11-cv-678-CMH/TRJ), or the EDVA Lawsuit seeking injunction and damages, alleging infringement of U.S. Patent Nos. 6,073,109, 6,058,413, 5,630,069 and 5,734,837 by Accenture's Claim Components insurance software product and other Accenture software products that utilize the patented workflow and business process management techniques.

On July 20, 2011, Accenture filed a lawsuit against the Company in the U.S. District Court for the Northern District of California (Accenture Global Services Ltd. and Accenture LLP v. Guidewire Software, Inc., Case No. 3:11-cv-03563-MEJ) alleging infringement of U.S. Patent No. 7,979,382 by the Company's ClaimCenter software product. No trial date has been set for this case.

On August 16, 2011, Accenture filed an answer in the EDVA Lawsuit and counterclaimed alleging that the Company's ClaimCenter and other unnamed software products infringe two Accenture patents, U.S. Patent Nos. 6,574,636 and 7,409,355 and filed a motion to have the entire EDVA Lawsuit transferred to the U.S. District Court for the Northern District of California. On September 9, 2011 the judge in the EDVA Lawsuit granted Accenture's motion to transfer the EDVA Lawsuit to the U.S. District Court for the Northern District of California.

On October 13, 2011, the Company agreed with Accenture to resolve all outstanding patent litigation concerning their respective insurance claims management software. In connection with the settlement, the Company has paid $10.0 million to Accenture with a potential additional payment based on the final outcome of Accenture's pending appeal regarding the validity of its '284 patent. If Accenture is successful in its appeal, the Company has agreed to pay them an additional $20.0 million. At any time prior to an initial determination by the appeals court, the Company may instead pay Accenture $15.0 million to discharge this potential obligation. If Accenture is not successful in its appeal, no further payments would be due in connection with the settlement. As part of the settlement, the Company has also agreed to a royalty free cross license of all current patents and patent applications with Accenture. The Company expensed the $10.0 million litigation provision in fiscal year 2011 as it believes that no future benefit is attributable to the cross license.

In addition to the matters described above, from time to time, the Company is involved in various other legal proceedings and receive claims from time to time, arising from the normal course of business activities. The Company has accrued for estimated losses in the accompanying condensed consolidated financial statements for matters with respect to which we believe the likelihood of an adverse outcome is probable and the amount of the loss is reasonably estimable.

Indemnification

The Company sells software licenses and services to its customers under contracts ("Software License"). Each Software License contains the terms of the contractual arrangement with the customer and generally includes certain provisions for defending the customer against any claims that the Company's software infringes upon a patent, copyright, trademark, or other proprietary right of a third party. The Software License also indemnifies the customer against losses, expenses, and liabilities from damages that may be assessed against the customer in the event the Company's software is found to infringe upon such third party rights.

The Company has not had to reimburse any of its customers for losses related to indemnification provisions and no material claims against the Company are outstanding as of July 31, 2011 and January 31, 2012. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the Software License, 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 those 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.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Stockholders' Equity And Stock-Based Compensation

6 Months Ended

Jan. 31, 2012

Stockholders' Equity And Stock-Based Compensation [Abstract]

Stockholders' Equity And Stock-Based Compensation

7. Stockholders' Equity and Stock-based Compensation

Convertible Preferred Stock

Upon the closing of the IPO on January 30, 2012, all outstanding convertible preferred stock was converted into 25,357,721 shares of common stock on a one-to-one basis.

Common Stock Reserved for Issuance

As of July 31, 2011 and January 31, 2012, the Company was authorized to issue 55,000,000 and 500,000,000 common shares with a par value of $0.0001 per share, respectively. As of July 31, 2011 and January 31, 2012, the Company had reserved shares of common stock, on an as-if-converted basis, for issuance as follows:


	July 31, 2011		January 31, 2012
Exercise of stock options to purchase common stock		8,256,678		7,376,756
Issuances of shares available under stock option plans		13,662		7,557,061
Vesting of restricted stock units		4,318,996		5,109,576
Issuances of shares available under RSU plan		11,004		—
Conversion of convertible preferred stock		25,357,721		—
Issuances upon exercise of warrant		69,529		69,529

Total common stock reserved for issuance		38,027,590		20,112,922

Stock Compensation Plans

In February 2007, the Company's board of directors ("Board") adopted and the stockholders approved the 2006 Stock Plan ("2006 Plan") as an amendment and restatement of the stockholder approved 2002 Stock Option/Stock Issuance Plan, as amended, which provides for the issuance of incentive and non-statutory options to employees and nonemployees of the Company and under which 14,124,637 shares had been reserved for issuance as of January 31, 2012.

In July 2009, the Board adopted and the stockholders approved the 2009 Stock Plan ("French Plan"). Under the French Plan, 32,000 shares had been reserved for issuance as of January 31, 2012. The number of shares exercised and issued under the French Plan reduced the corresponding number of shares available under the 2006 Plan.

In June 2010, the Board adopted and the stockholders approved the 2010 Restricted Stock Unit Plan ("2010 Plan"). As of January 31, 2012, the Company had reserved 5,160,000 shares of common stock for issuance under the 2010 Plan.

On September 14, 2011, the Board, upon the recommendation of the Compensation Committee of the Board ("Committee") adopted the 2011 Stock Plan ("2011 Plan"), which was subsequently approved by the Company's stockholders in January 2012. The 2011 Plan provides flexibility to the Committee to use various equity-based incentive awards as compensation tools to motivate the Company's workforce. The Company has initially reserved 7,500,000 shares of its common stock for the issuance of awards under the 2011 Plan. In addition, the number of shares remaining available for grant under the 2006 Plan and 2010 Plan immediately prior to the closing of the IPO were added to the shares available under the 2011 Plan. The number of shares remaining available for grant under the 2009 Plan expired upon the IPO. The 2011 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2013, by up to 5% of the outstanding number of shares of the Company's common stock on the immediately preceding December 31. This number is subject to adjustment in the event of a stock split, stock dividend or other defined changes in the Company's capitalization.

The shares the Company issues under the 2011 Plan will be authorized but unissued shares or shares that are reacquired. The shares of common stock underlying any awards under the 2011 Plan, 2010 Plan and 2006 Plan that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy 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 common stock available for issuance under the 2011 Plan. The remaining number of unissued restricted stock units under the French Plan expired upon completion of the Company's IPO.

No awards may be granted under the 2011 Plan after the date that is 10 years from the effectiveness of the plan. No awards under the 2011 Plan were granted prior to the IPO. Following the closing of the IPO, no additional awards will be made under the 2006 Plan, 2009 Plan and 2010 Plan.

Valuation of Awards

The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes option pricing model using the following weighted-average assumptions:


	Three Months Ended January 31,			Six Months Ended January 31,
	2011⁽¹⁾		2012	2011⁽¹⁾		2012
Expected life (in years)		—	6.1		—	6.2
Risk-free interest rate		—	1.2%		—	1.2%
Expected volatility		—	45.0%		—	44.6%
Expected dividend yield		—	0%		—	0%

⁽¹⁾	No options were issued during the three and six months ended January 31, 2011.

Stock Options

Option activity under the Plans for the period presented is as follows:


				Options Outstanding
	Shares Available for Grant			Weighted- Number of Stock Options Outstanding			Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value⁽¹⁾
											(in thousands)
Balance as of July 31, 2011		13,662			8,256,678		$	2.98		6.6	$	37,353
Additional shares authorized		7,932,000			—			—
Transferred from 2010 Plan		50,424			—			—
Granted		(470,000	)		470,000			9.48
Exercised		—			(1,320,389	)		1.97
Cancelled		29,533			(29,533	)		3.75
Repurchased		2,442			—			—
Expired		(1,000	)		—			—

Balance as of January 31, 2012		7,557,061			7,376,756			3.57		6.4		106,689

Exercisable as of January 31, 2012					7,229,747			3.55		6.5		104,702

Vested and expected to vest as of January 31, 2012					7,209,118			3.48		6.4		104,857

⁽¹⁾

Aggregate intrinsic value represents the difference between the fair market value per share of common stock as of July 31, 2011 as determined by the Company's board of directors of $7.50, and the Company's closing stock price of $18.03 on January 31, 2012 against the exercise price of outstanding, in-the-money options.

The options exercisable as of January 31, 2012 include options that are exercisable prior to vesting. The total intrinsic value of options exercised was approximately $31,000 and $8.2 million for the three months ended January 31, 2011 and 2012, respectively, and $0.8 million and $9.9 million for the six months ended January 31, 2011 and 2012, respectively. The total estimated grant date fair value of options vested during the six months ended January 31, 2012 was $1.1 million. The weighted average grant date fair value of options granted was $4.47 and $4.18 for the three months and six months ended January 31, 2012, respectively. There were no option grants during the six months ended January 31, 2011.

As of January 31, 2012, total unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock options was approximately $2.8 million, which is expected to be recognized over the next 1.3 years.

Performance-based RSUs

On March 9, 2011, the Company granted RSUs covering 502,200 shares of its common stock to the Company's Chief Executive Officer subject to satisfaction of either an initial public offering of the Company's equity securities prior to termination of employment with the Company or a change of control of the Company, whichever is the first to occur. Recognition of compensation cost for this grant has commenced upon the successful IPO of the Company, which satisfied the performance condition. Please refer to "Stock-based Compensation Expenses" below for more details. RSU activity under the equity plans for the period presented is follows:


				RSUs Outstanding
	Number of RSUs Available for Grant			Number of RSUs Outstanding			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value⁽¹⁾
									(in thousands)
Balance as of July 31, 2011		11,004			4,318,996		$	4.70	$	32,392
Additional shares authorized		830,000			—			—
Transferred to 2011 Plan		(50,424	)		—			—
Granted		(895,095	)		895,095			9.10
Released		—			—			—
Cancelled		104,515			(104,515	)		5.74

Balance as of January 31, 2012		—			5,109,576			5.45		92,126

⁽¹⁾

The aggregate intrinsic value as of July 31, 2011 is based upon the fair market value per share of common stock as of July 31, 2011 as determined by the Company's board of directors of $7.50, and as of January 31, 2012 is based on the Company's closing stock price of $18.03 on January 31, 2012.

As of January 31, 2012, total unrecognized compensation cost, adjusted for estimated forfeitures, related to RSUs was approximately $14.8 million, which is expected to be recognized over the next 1.7 years.

Stock-based Compensation Expenses

Stock-based compensation expenses related to all employee and non-employee stock-based awards was as follows (in thousands):


	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2012		2011		2012
Stock-based compensation expenses:
Cost of revenue	$	330	$	1,168	$	636	$	1,926
Product development		322		1,258		570		2,103
Marketing and sales		208		527		343		1,024
General and administrative		600		3,339		934		4,551

Total stock-based compensation, recorded in costs and expenses	$	1,460	$	6,292	$	2,483	$	9,604

Stock-based compensation for the three and six months ended January 31, 2012 includes a stock compensation expense of $1.2 million related to the RSUs granted to the Company's Chief Executive Officer whereby the performance condition for these grants was satisfied upon the Company's IPO closing, and a $0.9 million related to a change in estimated forfeiture rate upon the IPO event.

Income Taxes	6 Months Ended
Income Taxes	Jan. 31, 2012
Income Taxes [Abstract]
Income Taxes	8. Income Taxes The income tax provision for the three months ended January 31, 2011 and 2012 was $0.1 million and $1.4 million, respectively, and the income tax provision for the six months ended January 31, 2011 and 2012 was $0.2 million and $4.5 million, respectively. The change is primarily due to having no valuation allowance, except on California research and development tax credits, as of January 31, 2012 compared to having a full valuation allowance as of January 31, 2011. In addition, the increase in profitability resulted in additional foreign and U.S. federal and state taxes during the six months ended January 31, 2012. The effective tax rates of 34.4% for the six months ended January 31, 2012 differs from the statutory federal income tax rate of 35% mainly due to permanent differences for stock based compensation and the impact of state income taxes, offset by the benefit from Federal research and development tax credits ("R&D credit"). The Company provides U.S. income taxes on the earnings of foreign subsidiaries, unless the subsidiaries' earnings are considered indefinitely reinvested outside the United States. As of January 31, 2012, U.S. income taxes were not provided for on the cumulative total of $ 7.5 million undistributed earnings from certain foreign subsidiaries. As of January 31, 2012, the unrecognized deferred tax liability for these earnings was approximately $0.6 million. During the six months ended January 31, 2012, the unrecognized tax benefits at the beginning of the period increased by $0.2 million associated with the Company's R&D credits. Accordingly, as of January 31, 2012, the Company had unrecognized tax benefits of $1.6 million that, if recognized, these tax benefits would affect the Company's effective tax rate.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Segment Information

6 Months Ended

Jan. 31, 2012

Segment Information [Abstract]

Segment Information

9. Segment Information

The Company operates in one segment. The Company's chief operating decision maker (the "CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for purposes of allocating resources. When evaluating the Company's financial performance, the CODM reviews separate revenues information for the Company's license, maintenance and professional services offerings, while all other financial information is reviewed on a consolidated basis. All of the Company's principal operations and decision-making functions are located in the United States.

The following table sets forth revenues by country based on the billing address of the customer:


	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2012		2011		2012
			(in thousands)
United States	$	20,376	$	30,882	$	40,596	$	63,281
Canada		9,621		8,359		13,570		12,975
Australia		3,013		3,451		6,368		10,117
United Kingdom		3,815		3,605		7,575		6,836
Other		5,512		8,800		8,898		14,268

Total revenues	$	42,337	$	55,097	$	77,007	$	107,477

No other country accounted for more than 10% of revenues during the three and six months ended January 31, 2011 and 2012 .

The following table sets forth the Company's property and equipment, net by geographic region:


	July 31, 2011		January 31, 2012
	(in thousands)
North America	$	4,379	$	4,038
Asia Pacific		20		16
Europe		56		210

Total net property and equipment	$	4,455	$	4,264

- 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.

+ References

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+ Details