Income Taxes (Tables)

12 Months Ended

Jul. 31, 2020

Income Tax Disclosure [Abstract]

Company's income (loss) before provision for income taxes

The Company’s income (loss) before provision for (benefit from) income taxes is as follows (in thousands):

	Fiscal years ended July 31,
	2020		2019		2018
Domestic	$	(34,121)	$	(1,778)	$	(13,501)
International	9,790		14,230		5,225
Income (loss) before provision for (benefit from) income taxes	$	(24,331)	$	12,452	$	(8,276)

Schedule of Components of Income Tax Expense

The provision for income taxes consisted of the following (in thousands):

	Fiscal years ended July 31,
	2020		2019		2018
Current:
U.S. Federal	$	13,077	$	3,297	$	2,047
State	178		48		219
Foreign	1,539		1,859		2,203
Total current	14,794		5,204		4,469
Deferred:
U.S. Federal	(10,125)		(13,683)		15,766
State	(1,357)		(989)		(1,460)
Foreign	(445)		1,188		(308)
Total deferred	(11,927)		(13,484)		13,998
Total provision for (benefit from) income taxes	$	2,867	$	(8,280)	$	18,467

Effective Income Tax Rate Reconciliation

Differences between income taxes calculated using the statutory federal income tax rate of 21% in the fiscal years ended July 31, 2020 and 2019, and 27% in the fiscal year ended July 31, 2018 and the provision for income taxes are as follows (in thousands):

	Fiscal years ended July 31,
	2020		2019		2018
Statutory federal income tax	$	(5,109)	$	2,617	$	(2,224)
State taxes, net of federal benefit	(1,179)		(939)		(993)
Share-based compensation	(2,971)		(8,013)		(8,715)
Non-deductible officers' compensation	3,634		3,938		3,230
Foreign income taxed at different rates	(235)		203		1,022
Research tax credits	(4,905)		(6,943)		(5,822)
Base erosion and anti-abuse tax	11,381		—		—
Re-measurement of U.S. deferred taxes	—		—		36,125
Non-deductible acquisition costs	—		—		1,270
Permanent differences and others	829		918		666
Change in valuation allowance	1,422		(61)		(6,092)
Total provision for (benefit from) income taxes	$	2,867	$	(8,280)	$	18,467

Tax effects of temporary differences

The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities are as follows (in thousands):

	As of July 31,
	2020		2019
Accruals and reserves	$	5,831	$	7,870
Stock-based compensation	6,606		6,353
Deferred revenue	5,553		2,316
Capitalized R&D	4,996		—
Lease liabilities	24,946		—
Net operating loss carryforwards	53,322		55,881
Tax credits	85,048		74,819
Total deferred tax assets	186,302		147,239
Less valuation allowance	37,188		31,421
Net deferred tax assets	149,114		115,818
Less deferred tax liabilities:
Intangible assets	4,381		7,413
Operating lease assets	18,774		—
Convertible debt	8,696		10,274
Property and equipment	8,274		1,435
Unremitted foreign earnings	354		302
Capitalized commissions	7,070		6,086
Total deferred tax liabilities	47,549		25,510
Deferred tax assets, net	101,565		90,308
Less foreign capitalized commissions	904		906
Total net deferred tax assets	100,661		89,402

Net operating loss carryforwards

As of July 31, 2020, the Company had research and development tax credits (“R&D credit”) carryforwards of the following (in thousands):

U.S. Federal	$	46,271
California	38,169
Total R&D credit carryforwards	$	84,440

Summary of activity related to unrecognized tax benefits

Activity related to unrecognized tax benefits is as follows (in thousands):

	Fiscal years ended July 31,
	2020		2019		2018
Unrecognized tax benefit - beginning of period	$	11,633	$	10,321	$	9,346
Gross increases - prior period tax positions	3,401		98		729
Gross decreases - prior period tax positions	(147)		(88)		(878)
Gross increases - current period tax positions	8,803		1,302		1,124
Unrecognized tax benefit - end of period	$	23,690	$	11,633	$	10,321