Commitments and Contingencies

12 Months Ended

Jul. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

The Company’s contractual obligations and commitments as of July 31, 2020 are as follows (in thousands):


	Lease Obligations ⁽¹⁾		Royalty Obligations⁽²⁾		Purchase Commitments ⁽³⁾		Long-Term Debt⁽⁴⁾		Total
Fiscal Year Ending July 31,
2021	$	15,660	$	2,755	$	67,494	$	5,000	$	90,909
2022	17,784		1,999		27,122		5,000		51,905
2023	16,211		628		8,306		5,000		30,145
2024	15,793		—		652		5,000		21,445
2025	16,152		—		2,421		405,000		423,573
Thereafter	78,886		—		—		—		78,886
Total	$	160,486	$	5,382	$	105,995	$	425,000	$	696,863

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

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

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

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

Legal Proceedings

From time to time, the Company is involved in various legal proceedings and receives claims, arising from the normal course of business activities. The Company has determined that no provision for liability nor disclosure is required related to any claim against the Company because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. Accordingly, the Company has not recorded any accrual for claims as of July 31, 2020 and 2019. The Company expenses legal fees in the period in which they are incurred.

On July 24, 2020, one of the Company’s stockholders filed a putative securities class action complaint in the United States District Court for the Northern District of California, against the Company and certain of its current or former officers and directors. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 and seeks unspecified compensatory damages, interest, and attorneys’ fees and costs Defendants’ time to respond has been extended by agreement of the parties until the court has appointed lead counsel and lead plaintiff and an operative complaint has been identified. The deadline for filing a request to be appointed lead counsel is September 23, 2020. The Company disputes the claims and intends to defend the lawsuit vigorously.

Indemnification

The Company sells software licenses and services to its customers under Software License Agreements (“SLA”) and Software Subscription Agreements (“SSA”). Our contracts generally include provisions for indemnifying customers against liabilities if our license and services infringe a third-party’s intellectual property rights. We may also incur liabilities if we breach our security obligations in our contracts.

The Company has not had to reimburse any of its customers for losses related to indemnification provisions and no material claims against the Company were outstanding as of July 31, 2020 and 2019. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under various SLAs and SSAs, the Company cannot estimate the amount of potential future payments, if any, related to indemnification provisions.

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