14. Commitments and Contingencies

The Company leases its principal facilities under operating lease agreements and leases time-based software licenses from time to time. Net operating lease expense for the three months ended July 31, 2017 and 2016 was approximately $1.2 million and $1.9 million, respectively. Net operating lease expense for the six months ended July 31, 2017 and 2016 was approximately $2.9 million and $3.6 million, respectively. Future annual minimum payments under these operating leases with initial lease terms in excess of one year are as follows:

	As of
	July 31, 2017
Fiscal Year	(in thousands)
2018	$	1,483
2019		2,885
2020		2,341
2021		812
2022		247
Total future annual minimum lease payments	$	7,768

Contract Manufacturer Commitments

The Company’s components and products are procured and built by independent contract manufacturers based on sales forecasts. These forecasts include estimates of future demand, historical trends, analysis of sales and marketing activities, and adjustment of overall market conditions. The Company regularly issues purchase orders to independent contract manufacturers which are cancelable only upon agreement between the Company and the third-party manufacturers. As of July 31, 2017 and January 31, 2017, total manufacturing purchase commitments were approximately $36.8 million and $23.9 million, respectively, as a result of seasonal fluctuations.

Indemnification

The Company, from time to time, in the normal course of business, indemnifies certain vendors with whom it enters into contractual relationships. The Company has agreed to hold the other party harmless against third-party claims in connection with the Company’s future products. The Company also indemnifies certain customers against third-party claims related to certain intellectual property matters. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim. The Company has not made payments under these obligations and no liabilities have been recorded for these obligations in the condensed consolidated balance sheets as of July 31, 2017 and January 31, 2017, respectively.