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Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________ 
FORM 10-Q
 _____________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File Number 001-35594
PALO ALTO NETWORKS, INC.
(Exact name of registrant as specified in its charter)  
 
Delaware
20-2530195
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3000 Tannery Way
Santa Clara, California 95054
(Address of principal executive office, including zip code)
(408753-4000
(Registrant’s telephone number, including area code)
NA
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common stock, $0.0001 par value per share
 
PANW
 
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Emerging growth company
Non-accelerated filer
Smaller reporting company
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No  
The number of shares outstanding of the registrant’s common stock as of February 14, 2020 was 99,704,863.
 



Table of Contents

TABLE OF CONTENTS

 
 
 
 
 
Page
 
PART I - FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
 
PART II - OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
 

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Table of Contents

PART I
ITEM 1.
FINANCIAL STATEMENTS
PALO ALTO NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except per share data)

 
January 31, 2020
 
July 31, 2019
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
2,000.0

 
$
961.4

Short-term investments
1,133.9

 
1,841.7

Accounts receivable, net of allowance for doubtful accounts of $1.2 and $0.8 at January 31, 2020 and July 31, 2019, respectively
540.3

 
582.4

Prepaid expenses and other current assets
304.0

 
279.3

Total current assets
3,978.2

 
3,664.8

Property and equipment, net
311.4

 
296.0

Operating lease right-of-use assets
270.0

 

Long-term investments
317.9

 
575.4

Goodwill
1,511.7

 
1,352.3

Intangible assets, net
290.0

 
280.6

Other assets
504.9

 
423.1

Total assets
$
7,184.1

 
$
6,592.2

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
55.4

 
$
73.3

Accrued compensation
175.2

 
235.5

Accrued and other liabilities
251.2

 
162.4

Deferred revenue
1,757.7

 
1,582.1

Total current liabilities
2,239.5

 
2,053.3

Convertible senior notes, net
1,461.2

 
1,430.0

Long-term deferred revenue
1,440.8

 
1,306.6

Long-term operating lease liabilities
353.5

 

Other long-term liabilities
80.6

 
216.0

Commitments and contingencies (Note 11)


 


Stockholders’ equity:
 
 
 
Preferred stock; $0.0001 par value; 100.0 shares authorized; none issued and outstanding at January 31, 2020 and July 31, 2019

 

Common stock and additional paid-in capital; $0.0001 par value; 1,000.0 shares authorized; 99.7 and 96.8 shares issued and outstanding at January 31, 2020 and July 31, 2019, respectively
2,644.5

 
2,490.9

Accumulated other comprehensive loss
(1.8
)
 
(3.7
)
Accumulated deficit
(1,034.2
)
 
(900.9
)
Total stockholders’ equity
1,608.5

 
1,586.3

Total liabilities and stockholders’ equity
$
7,184.1

 
$
6,592.2


See notes to condensed consolidated financial statements.

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Table of Contents

PALO ALTO NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share data)

 
Three Months Ended
 
Six Months Ended
 
January 31,
 
January 31,
 
2020
 
2019
 
2020
 
2019
Revenue:
 
 
 
 
 
 
 
Product
$
246.5

 
$
271.6

 
$
477.7

 
$
512.1

Subscription and support
570.2

 
439.6

 
1,110.9

 
855.1

Total revenue
816.7

 
711.2

 
1,588.6

 
1,367.2

Cost of revenue:
 
 
 
 
 
 
 
Product
68.7

 
82.5

 
133.8

 
155.7

Subscription and support
164.4

 
120.1

 
317.0

 
230.4

Total cost of revenue
233.1

 
202.6

 
450.8

 
386.1

Total gross profit
583.6

 
508.6

 
1,137.8

 
981.1

Operating expenses:
 
 
 
 
 
 
 
Research and development
185.4

 
128.3

 
355.9

 
241.7

Sales and marketing
374.9

 
320.0

 
740.6

 
634.6

General and administrative
76.2

 
53.7

 
146.0

 
130.3

Total operating expenses
636.5

 
502.0

 
1,242.5

 
1,006.6

Operating income (loss)
(52.9
)
 
6.6

 
(104.7
)
 
(25.5
)
Interest expense
(19.0
)
 
(20.6
)
 
(37.9
)
 
(43.3
)
Other income, net
10.8

 
16.0

 
27.0

 
29.0

Income (loss) before income taxes
(61.1
)
 
2.0

 
(115.6
)
 
(39.8
)
Provision for income taxes
12.6

 
4.6

 
17.7

 
1.1

Net loss
$
(73.7
)
 
$
(2.6
)
 
$
(133.3
)
 
$
(40.9
)
Net loss per share, basic and diluted
$
(0.75
)
 
$
(0.03
)
 
$
(1.37
)
 
$
(0.44
)
Weighted-average shares used to compute net loss per share, basic and diluted
98.3

 
94.0

 
97.5

 
93.9


See notes to condensed consolidated financial statements.

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PALO ALTO NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in millions)

 
Three Months Ended
 
Six Months Ended
 
January 31,
 
January 31,
 
2020

2019
 
2020
 
2019
Net loss
$
(73.7
)
 
$
(2.6
)
 
$
(133.3
)
 
$
(40.9
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Change in unrealized gains (losses) on investments
(1.1
)
 
4.8

 
1.6

 
5.7

Change in unrealized gains (losses) on cash flow hedges
(0.1
)
 
4.4

 
0.3

 
0.9

Other comprehensive income (loss)
(1.2
)
 
9.2

 
1.9

 
6.6

Comprehensive income (loss)
$
(74.9
)
 
$
6.6

 
$
(131.4
)
 
$
(34.3
)

See notes to condensed consolidated financial statements.

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PALO ALTO NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in millions)

 
Three Months Ended January 31, 2020
 
Common Stock
and
Additional Paid-In Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Total 
Stockholders’
Equity
 
Shares
 
Amount
 
Balance as of October 31, 2019
97.6

 
$
2,477.5

 
$
(0.6
)
 
$
(960.5
)
 
$
1,516.4

Net loss

 

 

 
(73.7
)
 
(73.7
)
Other comprehensive income

 

 
(1.2
)
 

 
(1.2
)
Issuance of common stock in connection with employee equity incentive plans
0.8

 
0.8

 

 

 
0.8

Taxes paid related to net share settlement of equity awards

 
(6.7
)
 

 

 
(6.7
)
Share-based compensation for equity-based awards

 
172.9

 

 

 
172.9

Settlement of warrants
1.3

 

 

 

 

Balance as of January 31, 2020
99.7

 
$
2,644.5

 
$
(1.8
)
 
$
(1,034.2
)
 
$
1,608.5

 
Three Months Ended January 31, 2019
 
Common Stock
and
Additional Paid-In Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Total 
Stockholders’
Equity
 
Shares
 
Amount
 
Balance as of October 31, 2018
94.7

 
$
2,129.3

 
$
(19.0
)
 
$
(857.3
)
 
$
1,253.0

Cumulative-effect adjustment from adoption of new accounting pronouncement

 

 

 

 

Net loss

 

 

 
(2.6
)
 
(2.6
)
Other comprehensive income

 

 
9.2

 

 
9.2

Issuance of common stock in connection with employee equity incentive plans
0.9

 
3.1

 

 

 
3.1

Taxes paid related to net share settlement of equity awards

 
(7.1
)
 

 

 
(7.1
)
Share-based compensation for equity-based awards

 
144.1

 

 

 
144.1

Settlement of convertible notes
0.3

 
(2.0
)
 

 

 
(2.0
)
Common stock received from exercise of note hedges
(0.3
)
 

 

 

 

Repurchase and retirement of common stock
(1.9
)
 
(330.0
)
 

 

 
(330.0
)
Temporary equity reclassification

 
4.1

 

 

 
4.1

Balance as of January 31, 2019
93.7

 
$
1,941.5

 
$
(9.8
)
 
$
(859.9
)
 
$
1,071.8



 
Six Months Ended January 31, 2020
 
Common Stock
and
Additional Paid-In Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Total 
Stockholders’
Equity
 
Shares
 
Amount
 
Balance as of July 31, 2019
96.8

 
$
2,490.9

 
$
(3.7
)
 
$
(900.9
)
 
$
1,586.3

Net loss

 

 

 
(133.3
)
 
(133.3
)
Other comprehensive income

 

 
1.9

 

 
1.9

Issuance of common stock in connection with employee equity incentive plans
1.8

 
37.1

 

 

 
37.1

Taxes paid related to net share settlement of equity awards

 
(12.0
)
 

 

 
(12.0
)
Share-based compensation for equity-based awards

 
326.6

 

 

 
326.6

Repurchase and retirement of common stock
(0.9
)
 
(198.1
)
 

 

 
(198.1
)
Settlement of warrants
2.0

 

 

 

 

Balance as of January 31, 2020
99.7

 
$
2,644.5

 
$
(1.8
)
 
$
(1,034.2
)
 
$
1,608.5


 
Six Months Ended January 31, 2019
 
Common Stock
and
Additional Paid-In Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Total 
Stockholders’
Equity
 
Shares
 
Amount
 
Balance as of July 31, 2018
93.6

 
$
1,967.4

 
$
(16.4
)
 
$
(790.7
)
 
$
1,160.3

Cumulative-effect adjustment from adoption of new accounting pronouncement

 

 

 
(28.3
)
 
(28.3
)
Net loss

 

 

 
(40.9
)
 
(40.9
)
Other comprehensive income

 

 
6.6

 

 
6.6

Issuance of common stock in connection with employee equity incentive plans
2.0

 
33.9

 

 

 
33.9

Taxes paid related to net share settlement of equity awards

 
(21.0
)
 

 

 
(21.0
)
Share-based compensation for equity-based awards

 
284.3

 

 

 
284.3

Settlement of convertible notes
1.7

 
(12.2
)
 

 

 
(12.2
)
Common stock received from exercise of note hedges
(1.7
)
 

 

 

 

Repurchase and retirement of common stock
(1.9
)
 
(330.0
)
 

 

 
(330.0
)
Temporary equity reclassification

 
19.1

 

 

 
19.1

Balance as of January 31, 2019
93.7

 
$
1,941.5

 
$
(9.8
)
 
$
(859.9
)
 
$
1,071.8


See notes to condensed consolidated financial statements.

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Table of Contents

PALO ALTO NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
 
Six Months Ended
 
January 31,
 
2020
 
2019
Cash flows from operating activities
 
 
 
Net loss
$
(133.3
)
 
$
(40.9
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Share-based compensation for equity-based awards
318.4

 
279.3

Depreciation and amortization
92.4

 
71.3

Gain related to facility exit
(3.1
)
 

Amortization of deferred contract costs
110.9

 
90.4

Amortization of debt discount and debt issuance costs
31.2

 
36.5

Amortization of operating lease right-of-use assets
21.1

 

Amortization of investment premiums, net of accretion of purchase discounts
(4.6
)
 
(7.7
)
Loss on conversions of convertible senior notes

 
2.6

Repayments of convertible senior notes attributable to debt discount

 
(67.1
)
Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
Accounts receivable, net
43.1

 
53.9

Prepaid expenses and other assets
(141.5
)
 
(90.6
)
Accounts payable
(17.3
)
 
(11.2
)
Accrued compensation
(61.1
)
 
(21.0
)
Accrued and other liabilities
(31.8
)
 
(11.6
)
Deferred revenue
307.7

 
243.8

Net cash provided by operating activities
532.1

 
527.7

Cash flows from investing activities
 
 
 
Purchases of investments
(283.3
)
 
(2,031.9
)
Proceeds from sales of investments
1.1

 
3.5

Proceeds from maturities of investments
1,255.1

 
1,004.2

Business acquisitions, net of cash acquired
(195.7
)
 
(154.9
)
Purchases of property, equipment, and other assets
(96.3
)
 
(57.8
)
Net cash provided by (used in) investing activities
680.9

 
(1,236.9
)
Cash flows from financing activities
 
 
 
Repayments of convertible senior notes attributable to principal and equity component

 
(348.5
)
Payments for debt issuance costs

 
(3.7
)
Repurchases of common stock
(198.1
)
 
(330.0
)
Proceeds from sales of shares through employee equity incentive plans
36.9

 
33.6

Payments for taxes related to net settlement of equity awards
(12.0
)
 
(21.0
)
Net cash used in financing activities
(173.2
)
 
(669.6
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
1,039.8

 
(1,378.8
)
Cash, cash equivalents, and restricted cash - beginning of period
965.0

 
2,509.2

Cash, cash equivalents, and restricted cash - end of period
$
2,004.8

 
$
1,130.4

 
 
 
 
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
 
 
 
Cash and cash equivalents
$
2,000.0

 
$
1,127.8

Restricted cash included in prepaid expenses and other current assets
2.5

 
1.3

Restricted cash included in other assets
2.3

 
1.3

Total cash, cash equivalents, and restricted cash
$
2,004.8

 
$
1,130.4

See notes to condensed consolidated financial statements.

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Table of Contents

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Palo Alto Networks, Inc. (the “Company,” “we,” “us,” or “our”), located in Santa Clara, California, was incorporated in March 2005 under the laws of the State of Delaware and commenced operations in April 2005. We offer platforms that empower enterprises, service providers, and government entities to secure their organizations by safely enabling applications and data running in their networks, on their endpoints, and in the cloud, and by preventing breaches that stem from targeted cyberattacks.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on September 9, 2019. Our condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Our condensed consolidated financial statements are unaudited, but include all adjustments of a normal recurring nature necessary for a fair presentation of our quarterly results. We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates.
Certain prior period amounts have been reclassified to conform to our current period presentation.
Our condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019.
Summary of Significant Accounting Policies
There have been no material changes to our significant accounting policies as of and for the six months ended January 31, 2020, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, except for the change in our accounting policies for leases due to our adoption of new lease accounting guidance. Refer to “Recently Adopted Accounting Pronouncements” below and Note 10. Leases.
Recently Adopted Accounting Pronouncements
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued new authoritative guidance on lease accounting. Among its provisions, the standard requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for operating leases and also requires additional qualitative and quantitative disclosures about lease arrangements.
We adopted this standard effective August 1, 2019 on a modified retrospective basis, under which financial results reported in periods prior to fiscal 2020 were not adjusted. We elected the package of practical expedients, which allowed us to carry forward our historical assessments of whether contracts are or contain leases, lease classification, and initial direct costs. Additionally, we elected to account for lease and non-lease components as a single lease component and to not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less.
The most significant impact of adopting this guidance was the recognition of $286.4 million of operating lease right-of-use assets and $442.4 million of operating lease liabilities on our condensed consolidated balance sheet as of August 1, 2019, which included reclassifying previously recognized $129.0 million in lease incentives, deferred or prepaid rent, as well as $27.0 million in cease-use liabilities to operating lease right-of-use assets.
The adoption of this standard had no impact on our condensed consolidated statements of operations and condensed consolidated statements of cash flows. Refer to Note 10. Leases for further discussion.
Recently Issued Accounting Pronouncements
Financial Instruments - Credit Losses
In June 2016, the FASB issued new authoritative guidance on the accounting for credit losses on most financial assets and certain financial instruments. The standard replaces the existing incurred loss model with an expected credit loss model for financial

- 8 -

Table of Contents

assets measured at amortized cost, including trade receivables, and requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The standard is effective for us in our first quarter of fiscal 2021 and will be applied on a modified retrospective basis. We are currently evaluating whether this standard will have a material impact on our condensed consolidated financial statements.
2. Revenue
Disaggregation of Revenue
The following table presents revenue by geographic theater (in millions):
 
Three Months Ended January 31,
 
Six Months Ended January 31,
 
2020
 
2019
 
2020
 
2019
Revenue:
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
United States
$
505.6

 
$
434.6

 
$
1,000.5

 
$
850.5

Other Americas
39.1

 
40.4

 
73.8

 
74.7

Total Americas
544.7

 
475.0

 
1,074.3

 
925.2

Europe, the Middle East, and Africa (“EMEA”)
166.2

 
148.3

 
313.8

 
276.0

Asia Pacific and Japan (“APAC”)
105.8

 
87.9

 
200.5

 
166.0

Total revenue
$
816.7

 
$
711.2

 
$
1,588.6

 
$
1,367.2


The following table presents revenue for groups of similar products and services (in millions):
 
Three Months Ended January 31,
 
Six Months Ended January 31,
 
2020
 
2019
 
2020
 
2019
Revenue:
 
 
 
 
 
 
 
Product
$
246.5

 
$
271.6

 
$
477.7

 
$
512.1

Subscription and support
 
 
 
 
 
 
 
Subscription
342.6

 
249.7

 
661.2

 
481.0

Support
227.6

 
189.9

 
449.7

 
374.1

Total subscription and support
570.2

 
439.6

 
1,110.9

 
855.1

Total revenue
$
816.7

 
$
711.2

 
$
1,588.6

 
$
1,367.2


Deferred Revenue
During the six months ended January 31, 2020, we recognized approximately $915.0 million of revenue pertaining to amounts that were deferred as of July 31, 2019.
Remaining Performance Obligations
Revenue expected to be recognized from remaining performance obligations was $3.3 billion as of January 31, 2020, of which we expect to recognize approximately $1.8 billion over the next 12 months and the remainder thereafter.
3. Fair Value Measurements
We categorize assets and liabilities recorded or disclosed at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.
Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

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The following table presents the fair value of our financial assets and liabilities measured at fair value on a recurring basis using the above input categories as of January 31, 2020 and July 31, 2019 (in millions):
 
 
January 31, 2020
 
July 31, 2019
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
577.1

 
$

 
$

 
$
577.1

 
$
369.1

 
$

 
$

 
$
369.1

Certificates of deposit
 

 

 

 

 

 
12.0

 
 
 
12.0

Commercial paper
 

 
65.5

 

 
65.5

 

 
19.3

 

 
19.3

U.S. government and agency securities
 

 
479.5

 

 
479.5

 

 
54.4

 

 
54.4

Total cash equivalents
 
577.1

 
545.0

 

 
1,122.1

 
369.1

 
85.7

 

 
454.8

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit
 

 
24.0

 

 
24.0

 

 
17.5

 

 
17.5

Commercial paper
 

 

 

 

 

 
8.9

 

 
8.9

Corporate debt securities
 

 
318.7

 

 
318.7

 

 
375.5

 

 
375.5

U.S. government and agency securities
 

 
791.2

 

 
791.2

 

 
1,439.8

 

 
1,439.8

Total short-term investments
 

 
1,133.9

 

 
1,133.9

 

 
1,841.7

 

 
1,841.7

Long-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities
 

 
140.6

 

 
140.6

 

 
214.3

 

 
214.3

U.S. government and agency securities
 

 
177.3

 

 
177.3

 

 
361.1

 

 
361.1

Total long-term investments
 

 
317.9

 

 
317.9

 

 
575.4

 

 
575.4

Prepaid expenses and other current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 

 
0.9

 

 
0.9

 

 
1.3

 

 
1.3

Total prepaid expenses and other current assets
 

 
0.9

 

 
0.9

 

 
1.3

 

 
1.3

Total assets measured at fair value
 
$
577.1

 
$
1,997.7

 
$

 
$
2,574.8

 
$
369.1

 
$
2,504.1

 
$

 
$
2,873.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued and other liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$

 
$
2.8

 
$

 
$
2.8

 
$

 
$
3.8

 
$

 
$
3.8

Total accrued and other liabilities
 

 
2.8




2.8

 


3.8




3.8

Total liabilities measured at fair value
 
$

 
$
2.8

 
$

 
$
2.8

 
$

 
$
3.8

 
$

 
$
3.8


Refer to Note 9. Debt for the carrying amount and estimated fair value of our convertible senior notes as of January 31, 2020 and July 31, 2019.

- 10 -

Table of Contents

4. Cash Equivalents and Investments
Available-for-sale Debt Securities
The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of January 31, 2020 and July 31, 2019 (in millions):
 
January 31, 2020
 
Amortized Cost 
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
Cash equivalents:
 
 
 
 
 
 
 
Certificates of deposit
$
65.5

 
$

 
$

 
$
65.5

U.S. government and agency securities
479.5

 

 

 
479.5

Total available-for-sale cash equivalents
$
545.0

 
$

 
$

 
$
545.0

Investments:
 
 
 
 
 
 
 
Certificates of deposit
$
24.0

 
$

 
$

 
$
24.0

Corporate debt securities
456.5

 
2.8

 

 
459.3

U.S. government and agency securities
966.1

 
2.5

 
(0.1
)
 
968.5

Total available-for-sale investments
$
1,446.6

 
$
5.3

 
$
(0.1
)
 
$
1,451.8