Fair Value Measurements

6 Months Ended

Jul. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

(3) Fair Value Measurements

We categorize assets and liabilities recorded at fair value on our consolidated balance sheets based on the accounting guidance framework for measuring fair value on either a recurring or nonrecurring basis, whereby inputs used in valuation techniques are assigned a hierarchical level.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, to measure the fair value:

• 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 quoted prices for identical assets or liabilities in less active markets; or benchmark yields, reported trades, broker/dealer quotes or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. The valuation techniques leverage an independent professional pricing service that uses calculated prices whereby securities with short maturities and infrequent secondary market trades are typically priced via mathematical calculations, cross-market approach, and model valuation methods, which are corroborated by market data.

• 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.

Fair value estimates are made at a specific point in time based on relevant market information and information about the financial or nonfinancial asset or liability. These estimates are subjective in nature and involve uncertainties or significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The following table presents the fair value of the Company’s financial assets and liabilities using the above input categories as of January 31, 2017 and July 31, 2017 (in thousands):

	As of January 31, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	31,468	$	—	$	—	$	31,468
Total cash equivalents		31,468		—		—		31,468
Total assets measured at fair value	$	31,468		—		—	$	31,468
Convertible preferred warrants:
Series E Convertible Preferred Stock warrants(1)	$	—	$	—	$	568	$	568
Total convertible preferred stock warrants		—		—		568		568
Total liabilities measured at fair value	$	—	$	—	$	568	$	568

	As of July 31, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	36,678	$	—	$	—	$	36,678
Corporate debt securities		—		11,954		—		11,954
Total cash equivalents		36,678		11,954		—		48,632
Short-term investments:
Corporate debt securities		—		5,931		—		5,931
U.S. government and agency securities		—		1,995		—		1,995
Total short-term investments		—		7,926		—		7,926
Total assets measured at fair value	$	36,678	$	19,880	$	—	$	56,558

⁽¹⁾ Series E Convertible Preferred Stock Convertible Preferred Stock warrant liability is included in Other long-term liabilities in the accompanying consolidated balance sheet. Immediately prior to the closing of the IPO, all convertible preferred stock warrants automatically converted into common stock warrants.

A summary of the changes in the fair value of the Company’s convertible preferred stock warrant liability is as follows (in thousands):

	January 31,		July 31,
	2017		2017
Convertible preferred stock warrant liability—beginning    balance	$	532	$	568
Change in fair value*		36		(470	)
Issuance of convertible preferred stock warrants		—		277
Reclassification of convertible preferred stock    warrant liability to additional paid in capital		—		(375	)
Convertible preferred stock warrant liability—ending balance	$	568	$	—

* Recorded in the consolidated statements of operations within Other income, net.

The Company did not have any material financial assets or liabilities for which fair value is determined using Level 3 inputs other than convertible preferred stock warrants and common stock warrants, which are discussed further in Note 7 Convertible Preferred Stock and Note 8 Common Stock, respectively.