Impact of ASC Topic 606 on Condensed Consolidated Financial Statement Line Items

The adoption of ASC Topic 606 impacted revenue recognition and incremental costs of obtaining a contract on our condensed consolidated balance sheet as of October 31, 2018 and statement of operations for the three and nine months ended October 31, 2018. There was no impact on the total cash provided by operating activities for the three and nine months ended October 31, 2018. Refer to Note 1 for a description of the primary impacts resulting from the adoption of ASC Topic 606.

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and nine months ended October 31, 2018 by ASC Topic 606 (in thousands, except per share data):

	October 31, 2018
	As Reported			Balances without adoption of ASC Topic 606			Effect of Change
ASSETS
Accounts receivable*	$	105,714		$	105,498		$	216
Deferred commissions		18,772			14,912			3,860
Deferred commissions, non-current		47,379			6,658			40,721
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deferred revenue		281,289			282,491			(1,202	)
Deferred revenue, non-current		19,952			20,955			(1,003	)
Accumulated deficit		(1,114,204	)		(1,161,206	)		47,002

*	Contract assets are reported as part of accounts receivable upon the adoption of ASC Topic 606.

	Three Months Ended October 31, 2018									Nine Months Ended October 31, 2018
	As Reported			Balances without adoption of ASC Topic 606			Effect of Change			As Reported			Balances without adoption of ASC Topic 606			Effect of Change
Revenue	$	155,944		$	158,454		$	(2,510	)	$	444,673		$	452,648		$	(7,975	)
Operating expenses:
Sales and marketing		84,490			89,821			(5,331	)		238,472			253,647			(15,175	)
Loss from operations		(39,464	)		(42,285	)		2,821			(112,543	)		(119,743	)		7,200
Net loss		(40,196	)		(43,017	)		2,821			(114,918	)		(122,118	)		7,200
Net loss per common share, basic and diluted	$	(0.28	)	$	(0.30	)	$	0.02		$	(0.82	)	$	(0.87	)	$	0.05
Weighted-average shares used to compute net loss per share, basic and diluted		142,366			142,366			142,366			140,559			140,559			140,559

	Three Months Ended October 31, 2018									Nine Months Ended October 31, 2018
	As Reported			Balances without adoption of ASC Topic 606			Effect of Change			As Reported			Balances without adoption of ASC Topic 606			Effect of Change
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(40,196	)	$	(43,017	)	$	2,821		$	(114,918	)	$	(122,118	)	$	7,200
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of deferred commissions		4,516			6,177			(1,661	)		12,231			18,119			(5,888	)
Changes in operating assets and liabilities:
Accounts receivable, net		9,065			9,124			(59	)		57,001			56,635			366
Deferred commissions		(9,753	)		(6,083	)		(3,670	)		(23,057	)		(13,770	)		(9,287	)
Deferred revenue		(276	)		(2,845	)		2,569			(9,868	)		(17,477	)		7,609
Net cash provided by operating activities		6,816			6,816			—			23,989			23,989			—

Contract assets, which are presented within accounts receivable, were $0.2 million as of October 31, 2018.

Deferred revenue was $301.2 million as of October 31, 2018. $120.1 million of revenue was recognized during the three months ended October 31, 2018 that was included in the deferred revenue balance as of July 31, 2018. $252.1 million of revenue was recognized during the nine months ended October 31, 2018 that was included in the deferred revenue balance as of February 1, 2018.

As of October 31, 2018, approximately $607.4 million of revenue is expected to be recognized from remaining performance obligations for subscription contracts. We expect to recognize revenue on 66% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.