Stock-Based Compensation Expense and Shareholders' Equity (Tables)

3 Months Ended

Oct. 31, 2020

Stockholders' Equity and Stock-based Compensation [Abstract]

Stock-based compensation expense

Stock-based compensation expense related to stock options and Stock Awards is included in the Company’s condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended October 31,
	2020		2019
Stock-based compensation expense	$	28,394	$	24,765
Net impact of deferred stock-based compensation	(310)		(207)
Total stock-based compensation expense	$	28,084	$	24,558
Stock-based compensation expense is included in the following categories:
Cost of subscription and support revenue	$	2,602	$	1,633
Cost of license revenue	251		180
Cost of services revenue	5,543		5,332
Research and development	7,247		6,181
Sales and marketing	5,977		5,157
General and administrative	6,464		6,075
Total stock-based compensation expense	$	28,084	$	24,558

Unrecognized compensation cost, adjusted for estimated forfeitures

Total unrecognized stock-based compensation expense as of October 31, 2020 related to stock options and Stock Awards is as follows:

	Unrecognized Expense		Weighted Average Expected Recognition Period
	(in thousands)		(in years)
Stock Options	$	370	0.5
Stock Awards	296,490		2.8
	$	296,860

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

A summary of the Company’s Stock Awards activity under the Company’s equity incentive plans is as follows:

	Stock Awards Outstanding
	Number of Stock Awards Outstanding	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)(1)
Balance as of July 31, 2020	2,445,698	$	99.34	$	287,761
Granted	1,112,046	$	111.55
Released	(339,759)	$	90.29	$	36,027
Canceled	(88,564)	$	100.38
Balance as of October 31, 2020	3,129,421	$	104.63	$	300,769
Expected to vest as of October 31, 2020	3,129,421	$	104.63	$	300,769

(1) Aggregate intrinsic value at each period end represents the total market value of Stock Awards at the Company’s closing stock price of $96.11 and $117.66 on October 31, 2020 and July 31, 2020, respectively. Aggregate intrinsic value for released Stock Awards represents the total market value of released Stock Awards at date of release.

Schedule of Share-based Compensation, Stock Options, Activity

Stock option activity under the Company’s equity incentive plans is as follows:

	Stock Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (1)
				(in years)	(in thousands)
Balance as of July 31, 2020	80,332	$	29.80	5.2	$	7,058
Granted	—
Exercised	(39,169)	$	43.80		$	2,461
Canceled	(654)	$	11.23
Balance as of October 31, 2020	40,509	$	16.56	5.8	$	3,222
Vested and expected to vest as of October 31, 2020	40,509	$	16.56	5.8	$	3,222
Exercisable as of October 31, 2020	34,585	$	17.48	5.7	$	2,719

(1) Aggregate intrinsic value at each period end represents the difference between the Company’s closing stock price of $96.11 and $117.66 on October 31, 2020 and July 31, 2020, respectively, and the exercise price of outstanding options. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price.

Schedule of Valuation Assumptions Using Monte Carlo Simulation Model

The fair value of TSR PSUs is estimated at the date of grant using the Monte Carlo simulation model which included the following assumptions:

	Three Months Ended October 31,
	2020	2019
Expected term (in years)	*	2.9
Risk-free interest rate	*	1.5%
Expected volatility of the Company	*	28.4%
Average expected volatility of the peer companies in the S&P Index	*	37.0%
Expected dividend yield	*	—%

*There were no TSR PSUs granted during the three months ended October 31, 2020.

Common Stock Reserved for Issuance

As of October 31, 2020 and July 31, 2020, the Company had reserved shares of common stock for future issuance as follows:

	October 31, 2020	July 31, 2020
Exercise of stock options to purchase common stock	40,509	80,332
Vesting of stock awards	3,129,421	2,445,698
Shares available under stock plans	21,720,159	23,460,234
Total common stock reserved for issuance	24,890,089	25,986,264