QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | o | Accelerated filer | o | |||||||||||
x | Smaller reporting company | |||||||||||||
Emerging growth company |
Item 1 | ||||||||
Item 2 | ||||||||
Item 3 | ||||||||
Item 4 |
Item 1 | ||||||||
Item 1A | ||||||||
Item 2 | ||||||||
Item 6 | ||||||||
As of October 31, 2020 | As of January 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
Investments | |||||||||||
Deferred contract costs, current | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Deferred contract costs, non-current | |||||||||||
Lease right-of-use assets | — | ||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Accrued compensation | |||||||||||
Deferred revenue, current | |||||||||||
Lease liabilities, current | — | ||||||||||
Total current liabilities | |||||||||||
Convertible senior notes, net | |||||||||||
Deferred revenue, non-current | |||||||||||
Lease liabilities, non-current | — | ||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | |||||||||||||||||||||
Other (expense) income, net | ( | ( | |||||||||||||||||||||
Loss before benefit from (provision for) income taxes | ( | ( | ( | ( | |||||||||||||||||||
Benefit from (provision for) income taxes | ( | ( | |||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Unrealized (loss) gain on investments | ( | ( | ( | ||||||||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares used in calculating net loss per share, basic and diluted | |||||||||||||||||||||||
Three Months Ended October 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balances as of July 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of restricted stock units, net of employee payroll taxes | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Shares issued related to a business combination | — | — | |||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balances as of October 31, 2020 | $ | $ | $ | $ | ( | $ |
Nine Months Ended October 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balances as of January 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of restricted stock units, net of employee payroll taxes | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | — | — | |||||||||||||||||||||||||||||||
Equity component of convertible senior notes, net of issuance costs | — | — | — | — | |||||||||||||||||||||||||||||||
Purchases of capped calls related to convertible senior notes | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Shares issued related to a business combination | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock in connection with employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balances as of October 31, 2020 | $ | $ | $ | $ | ( | $ |
Three Months Ended October 31, 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balances as of July 31, 2019 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of restricted stock units, net of employee payroll taxes | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balances as of October 31, 2019 | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended October 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balances as of January 31, 2019 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options and restricted stock agreements, net of repurchases | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units, net of employee payroll taxes | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Exercise of common stock warrants | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Repayment of promissory note | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock to common stock in connection with initial public offering | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balances as of October 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended October 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred contract costs | |||||||||||
Amortization of debt discount and issuance costs | |||||||||||
Stock-based compensation | |||||||||||
Non-cash lease expense | — | ||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Deferred contract costs | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable | ( | ( | |||||||||
Accrued expenses and other liabilities | |||||||||||
Accrued compensation | |||||||||||
Deferred revenue | |||||||||||
Lease liabilities | ( | — | |||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Capitalization of internal-use software costs | ( | ||||||||||
Business acquisitions, net of cash acquired | ( | ||||||||||
Purchases of held-to-maturity investments | ( | ||||||||||
Proceeds from maturities of held-to-maturity investments | |||||||||||
Purchases of available-for-sale investments | ( | ( | |||||||||
Proceeds from maturities of available-for-sale investments | |||||||||||
Proceeds from sales of available-for-sale investments | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $ | |||||||||||
Purchases of capped calls related to convertible senior notes | ( | ||||||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | |||||||||||
Payments of costs related to initial public offering | ( | ||||||||||
Proceeds from employee stock purchase plan | |||||||||||
Proceeds from repayment of promissory note | |||||||||||
Proceeds from issuance of common stock upon exercise of stock options | |||||||||||
Employee payroll taxes paid related to net share settlement of restricted stock units | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
Supplemental cash flow data: | |||||||||||
Cash paid for income taxes | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
Vesting of early exercised options | $ | $ | |||||||||
Purchase of property and equipment, accrued but not yet paid | $ | $ | |||||||||
Costs related to issuance of convertible senior notes, accrued but not yet paid | $ | $ | |||||||||
Costs related to initial public offering, accrued but not yet paid | $ | $ | |||||||||
Non-cash purchases of property and equipment | $ | $ | |||||||||
Fair value of common stock issued as consideration for a business combination | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash—included in other assets | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
As of October 31, 2020 | As of January 31, 2020 | ||||||||||
(in thousands) | |||||||||||
Cash and cash equivalents | |||||||||||
Cash | $ | $ | |||||||||
Money market funds | |||||||||||
U.S. Treasury securities | |||||||||||
Total cash and cash equivalents | $ | $ | |||||||||
Available-for-sale investments: | |||||||||||
U.S. Treasury securities | $ | $ | |||||||||
Commercial paper | |||||||||||
Corporate debt securities | |||||||||||
U.S. Government agency securities | |||||||||||
Total available-for-sale investments | $ | $ | |||||||||
Held-to-maturity investments: | |||||||||||
U.S. Treasury securities | $ | $ | |||||||||
Commercial paper | |||||||||||
Corporate debt securities | |||||||||||
Total held-to-maturities investments | $ | $ | |||||||||
Total investments | $ | $ |
As of October 31, 2020 | |||||||||||||||||
Cost Basis | Unrealized Gain, Net | Recorded Basis | |||||||||||||||
(in thousands) | |||||||||||||||||
Available-for-sale investments: | |||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Total available-for-sale investments | $ | $ | $ | ||||||||||||||
As of January 31, 2020 | |||||||||||||||||
Cost Basis | Unrealized Gain, Net | Recorded Basis | |||||||||||||||
(in thousands) | |||||||||||||||||
Available-for-sale investments: | |||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
U.S. Government agency securities | |||||||||||||||||
Total available-for-sale investments | $ | $ | $ | ||||||||||||||
Held-to-maturity investments: | |||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Total held-to-maturities investments | $ | $ | $ | ||||||||||||||
Total investments | $ | $ | $ |
As of October 31, 2020 | |||||||||||
Cost Basis | Recorded Basis | ||||||||||
(in thousands) | |||||||||||
Due within one year | $ | $ | |||||||||
Due between one to five years | |||||||||||
Total | $ | $ |
As of January 31, 2020 | |||||||||||
Cost Basis | Recorded Basis | ||||||||||
(in thousands) | |||||||||||
Due within one year | $ | $ | |||||||||
Due between one to five years | |||||||||||
Total | $ | $ |
As of October 31, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Included in cash equivalents | $ | ||||||||||||||||||||||
Included in investments | $ |
As of January 31, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
U.S. Government agency securities | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Included in cash equivalents | $ | ||||||||||||||||||||||
Included in investments | $ |
(in thousands) | ||||||||||||||
Cash paid to common and preferred stockholders, warrant holders, and vested option holders | $ | |||||||||||||
Fair value of common stock transferred | ||||||||||||||
Fair value of assumed options and restricted stock attributable to pre-combination service(1) | ||||||||||||||
Fair value of future cash payments to common stockholders attributable to pre-combination service | ||||||||||||||
Total purchase consideration | $ | |||||||||||||
(1) The restricted shares are considered to be legally issued and outstanding on the date of issuance. |
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | |||||||||||||
Accounts receivable and other assets | ||||||||||||||
Intangible assets | ||||||||||||||
Goodwill | ||||||||||||||
Accounts payable and other liabilities | ( | |||||||||||||
Deferred revenue | ( | |||||||||||||
Deferred tax liabilities, net | ( | |||||||||||||
Total purchase consideration | $ |
Fair Value | Useful Life | |||||||||||||
(in thousands) | (in years) | |||||||||||||
Customer relationships | $ | |||||||||||||
Developed technology | $ | |||||||||||||
Trademarks | $ |
(in thousands) | ||||||||||||||
Balance as of January 31, 2020 | $ | |||||||||||||
Goodwill additions | ||||||||||||||
Balance as of October 31, 2020 | $ |
Cost | Accumulated Amortization | Net | Weighted Average Remaining Useful Life | |||||||||||||||||||||||
(in thousands) | (in years) | |||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
Developed technology | ( | |||||||||||||||||||||||||
Trademarks | ( | |||||||||||||||||||||||||
Other intangibles, net | $ | $ | ( | $ |
Year ending January 31, | ||||||||||||||
(in thousands) | ||||||||||||||
Remainder of 2021 | $ | |||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
Thereafter | ||||||||||||||
Total expected future amortization expense | $ |
As of October 31, 2020 | As of January 31, 2020 | ||||||||||
(in thousands) | |||||||||||
Leasehold improvements | $ | $ | |||||||||
Computers and equipment | |||||||||||
Furniture and fixtures | |||||||||||
Capitalized internal-use software | |||||||||||
Gross property and equipment (1) | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
As of October 31, 2020 | |||||
(in thousands) | |||||
Assets | |||||
Lease right-of-use assets | $ | ||||
Liabilities | |||||
Lease liabilities | |||||
Lease liabilities, non-current |
Three Months Ended October 31, 2020 | Nine Months Ended October 31, 2020 | ||||||||||
(in thousands) | |||||||||||
Operating lease expense | $ | $ | |||||||||
Short-term lease expense | |||||||||||
Variable lease expense |
Three Months Ended October 31, 2020 | Nine Months Ended October 31, 2020 | ||||||||||
(in thousands) | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ |
Year ending January 31, | |||||
(in thousands) | |||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Gross lease payments | $ | ||||
Less: Imputed interest | ( | ||||
Total | $ |
As of October 31, 2020 | ||||||||||||||
(in thousands) | ||||||||||||||
Principal | $ | |||||||||||||
Less: unamortized debt discount | ( | |||||||||||||
Less: unamortized issuance costs | ( | |||||||||||||
Net carrying amount | $ |
As of October 31, 2020 | ||||||||||||||
(in thousands) | ||||||||||||||
Proceeds allocated to the conversion options (debt discount) | $ | |||||||||||||
Less: issuance costs | ( | |||||||||||||
Carrying amount of the equity component | $ |
Three Months Ended October 31, 2020 | Nine Months Ended October 31, 2020 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Contractual interest expense | $ | $ | ||||||||||||||||||
Amortization of debt discount | ||||||||||||||||||||
Amortization of debt issuance costs | ||||||||||||||||||||
Total interest expense related to the Notes | $ | $ |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Deferred revenue, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Billings | |||||||||||||||||||||||
Deferred revenue assumed in the Rundeck acquisition | |||||||||||||||||||||||
Revenue recognized | ( | ( | ( | ( | |||||||||||||||||||
Deferred revenue, end of period | $ | $ | $ | $ |
October 31, 2020 | |||||
Outstanding stock options and unvested RSUs outstanding | |||||
Available for future stock option and RSU grants | |||||
Available for ESPP | |||||
Total common stock reserved at October 31, 2020 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Outstanding at January 31, 2020 | $ | $ | |||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Exercised | ( | $ | |||||||||||||||||||||
Canceled | ( | $ | |||||||||||||||||||||
Outstanding at October 31, 2020 | $ | $ | |||||||||||||||||||||
Vested as of October 31, 2020 | $ | $ |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Expected dividend yield | % | ||||||||||||||||||||||
Expected volatility | % | ||||||||||||||||||||||
Expected term (years) | |||||||||||||||||||||||
Risk-free interest rate | % |
Number of RSUs | Weighted Average Grant Date Fair Value Per Share | ||||||||||
Outstanding at January 31, 2020 | $ | ||||||||||
Granted | $ | ||||||||||
Vested, net of shares withheld for employee payroll taxes | ( | $ | |||||||||
Canceled | ( | $ | |||||||||
Outstanding at October 31, 2020 | $ |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares used in calculating net loss per share, basic and diluted | |||||||||||||||||||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( |
As of October 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Shares subject to outstanding common stock awards | |||||||||||
Convertible senior notes | |||||||||||
Unvested early exercised stock options | |||||||||||
Restricted stock awards purchased with promissory notes | |||||||||||
Restricted stock issued to Rundeck key personnel | |||||||||||
Shares issuable pursuant to the 2019 Employee Stock Purchase Plan | |||||||||||
Total |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
International | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
As of October 31, | |||||||||||
2020 | 2019 | ||||||||||
Customers | 13,725 | 12,436 | |||||||||
Customers greater than $100,000 in ARR | 401 | 303 |
Last 12 Months Ended October 31, | |||||||||||
2020 | 2019 | ||||||||||
Dollar-based net retention rate for all customers | 119 | % | 129 | % |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenue | $ | 53,772 | $ | 42,750 | $ | 154,272 | $ | 120,425 | |||||||||||||||
Cost of revenue(1) | 7,685 | 6,634 | 21,285 | 18,226 | |||||||||||||||||||
Gross profit | 46,087 | 36,116 | 132,987 | 102,199 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development(1) | 16,156 | 12,619 | 46,705 | 35,160 | |||||||||||||||||||
Sales and marketing(1) | 34,024 | 27,425 | 88,271 | 72,378 | |||||||||||||||||||
General and administrative(1) | 17,746 | 12,765 | 45,899 | 38,464 | |||||||||||||||||||
Total operating expenses | 67,926 | 52,809 | 180,875 | 146,002 | |||||||||||||||||||
Loss from operations | (21,839) | (16,693) | (47,888) | (43,803) | |||||||||||||||||||
Interest income | 974 | 1,427 | 3,375 | 4,283 | |||||||||||||||||||
Interest expense | (4,133) | — | (5,741) | — | |||||||||||||||||||
Other (expense) income, net | (449) | 245 | (861) | 346 | |||||||||||||||||||
Loss before benefit from (provision for) income taxes | (25,447) | (15,021) | (51,115) | (39,174) | |||||||||||||||||||
Benefit from (provision for) income taxes | 4,839 | (244) | 4,360 | (725) | |||||||||||||||||||
Net loss | $ | (20,608) | $ | (15,265) | $ | (46,755) | $ | (39,899) | |||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost of revenue | $ | 488 | $ | 303 | $ | 1,095 | $ | 773 | |||||||||||||||
Research and development | 2,807 | 1,462 | 7,459 | 3,760 | |||||||||||||||||||
Sales and marketing | 6,254 | 2,295 | 11,409 | 6,084 | |||||||||||||||||||
General and administrative | 3,910 | 3,287 | 11,772 | 8,775 | |||||||||||||||||||
Total | $ | 13,459 | $ | 7,347 | $ | 31,735 | $ | 19,392 |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Cost of revenue | 14 | 16 | 14 | 15 | |||||||||||||||||||
Gross profit | 86 | % | 84 | % | 86 | % | 85 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 30 | 30 | 30 | 29 | |||||||||||||||||||
Sales and marketing | 63 | 64 | 57 | 60 | |||||||||||||||||||
General and administrative | 33 | 30 | 30 | 32 | |||||||||||||||||||
Total operating expenses | 126 | 124 | 117 | 121 | |||||||||||||||||||
Loss from operations | (41) | (39) | (31) | (36) | |||||||||||||||||||
Interest income | 2 | 3 | 2 | 4 | |||||||||||||||||||
Interest expense | (8) | — | (4) | — | |||||||||||||||||||
Other (expense) income, net | (1) | 1 | (1) | — | |||||||||||||||||||
Loss before benefit from (provision for) income taxes | (47) | (35) | (33) | (33) | |||||||||||||||||||
Benefit from (provision for) income taxes | 9 | (1) | 3 | (1) | |||||||||||||||||||
Net loss | (38) | % | (36) | % | (30) | % | (33) | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenue | $ | 53,772 | $ | 42,750 | $ | 11,022 | 26 | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Cost of revenue | $ | 7,685 | $ | 6,634 | $ | 1,051 | 16 | % | |||||||||||||||
Gross margin | 86 | % | 84 | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Research and development | $ | 16,156 | $ | 12,619 | $ | 3,537 | 28 | % | |||||||||||||||
Percentage of revenue | 30 | % | 30 | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Sales and marketing | $ | 34,024 | $ | 27,425 | $ | 6,599 | 24 | % | |||||||||||||||
Percentage of revenue | 63 | % | 64 | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
General and administrative | $ | 17,746 | $ | 12,765 | $ | 4,981 | 39 | % | |||||||||||||||
Percentage of revenue | 33 | % | 30 | % |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest expense | $ | 4,133 | $ | — | $ | 4,133 | N/A |
Three Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest income | $ | 974 | $ | 1,427 | $ | (453) | (32) | % | |||||||||||||||
Other (expense) income, net | $ | (449) | $ | 245 | $ | (694) | (283) | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenue | $ | 154,272 | $ | 120,425 | $ | 33,847 | 28 | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Cost of revenue | $ | 21,285 | $ | 18,226 | $ | 3,059 | 17 | % | |||||||||||||||
Gross margin | 86 | % | 85 | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Research and development | $ | 46,705 | $ | 35,160 | $ | 11,545 | 33 | % | |||||||||||||||
Percentage of revenue | 30 | % | 29 | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Sales and marketing | $ | 88,271 | $ | 72,378 | $ | 15,893 | 22 | % | |||||||||||||||
Percentage of revenue | 57 | % | 60 | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
General and administrative | $ | 45,899 | $ | 38,464 | $ | 7,435 | 19 | % | |||||||||||||||
Percentage of revenue | 30 | % | 33 | % |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest expense | $ | 5,741 | $ | — | $ | 5,741 | N/A |
Nine Months Ended October 31, | |||||||||||||||||||||||
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest income | $ | 3,375 | $ | 4,283 | $ | (908) | (21) | % | |||||||||||||||
Other (expense) income, net | $ | (861) | $ | 346 | $ | (1,207) | (349) | % |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Gross profit | $ | 46,087 | $ | 36,116 | $ | 132,987 | $ | 102,199 | |||||||||||||||
Add: | |||||||||||||||||||||||
Stock-based compensation | 488 | 303 | 1,095 | 773 | |||||||||||||||||||
Amortization of acquired intangible assets | 93 | $ | — | 93 | — | ||||||||||||||||||
Non-GAAP gross profit | $ | 46,668 | $ | 36,419 | $ | 134,175 | $ | 102,972 | |||||||||||||||
Gross margin | 86 | % | 84 | % | 86 | % | 85 | % | |||||||||||||||
Non-GAAP gross margin | 87 | % | 85 | % | 87 | % | 86 | % |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Loss from operations | $ | (21,839) | $ | (16,693) | $ | (47,888) | $ | (43,803) | |||||||||||||||
Add: | |||||||||||||||||||||||
Stock-based compensation | 13,459 | 7,347 | 31,735 | 19,392 | |||||||||||||||||||
Amortization of acquired intangible assets | 292 | $ | — | 292 | — | ||||||||||||||||||
Acquisition-related expenses | 1,786 | — | 1,786 | — | |||||||||||||||||||
Non-GAAP operating loss | $ | (6,302) | $ | (9,346) | $ | (14,075) | $ | (24,411) | |||||||||||||||
Operating margin | (41) | % | (39) | % | (31) | % | (36) | % | |||||||||||||||
Non-GAAP operating margin | (12) | % | (22) | % | (9) | % | (20) | % |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net loss | $ | (20,608) | $ | (15,265) | $ | (46,755) | $ | (39,899) | |||||||||||||||
Add: | |||||||||||||||||||||||
Stock-based compensation | 13,459 | 7,347 | 31,735 | 19,392 | |||||||||||||||||||
Amortization of debt discount and issuance costs | 3,235 | — | 4,493 | — | |||||||||||||||||||
Amortization of acquired intangibles assets | 292 | — | 292 | — | |||||||||||||||||||
Acquisition-related expenses | 1,786 | — | 1,786 | — | |||||||||||||||||||
Acquisition-related tax benefit | (5,058) | — | (5,058) | — | |||||||||||||||||||
Non-GAAP net loss | $ | (6,894) | $ | (7,918) | $ | (13,507) | $ | (20,507) |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net cash used in operating activities | $ | 4,844 | 3,432 | $ | 6,706 | $ | (1,975) | ||||||||||||||||
Less: | |||||||||||||||||||||||
Purchases of property and equipment | (110) | (1,171) | (3,402) | (3,190) | |||||||||||||||||||
Capitalization of internal-use software costs | (217) | — | (328) | — | |||||||||||||||||||
Free cash flow | $ | 4,517 | $ | 2,261 | $ | 2,976 | $ | (5,165) | |||||||||||||||
Net cash used in investing activities | $ | (45,488) | $ | (135,967) | $ | (45,963) | $ | (172,682) | |||||||||||||||
Net cash provided by (used in) financing activities | $ | 663 | $ | 2,566 | $ | 251,890 | $ | 220,734 |
Nine Months Ended October 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Net cash provided by (used in) operating activities | $ | 6,706 | $ | (1,975) | |||||||
Net cash used in investing activities | $ | (45,963) | $ | (172,682) | |||||||
Net cash provided by financing activities | $ | 251,890 | $ | 220,734 |
Exhibit Number | Description | Form | File No. | Incorporated by Exhibit Reference | Filing Date | |||||||||||||||||||||||||||
8-K | 001-38856 | 2.1 | October 1, 2020 | |||||||||||||||||||||||||||||
8-K | 001-38856 | 3.1 | April 15, 2019 | |||||||||||||||||||||||||||||
8-K | 001-38856 | 3.2 | April 15, 2019 | |||||||||||||||||||||||||||||
Filed herewith | ||||||||||||||||||||||||||||||||
Filed herewith | ||||||||||||||||||||||||||||||||
Furnished herewith | ||||||||||||||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith | ||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document. | Filed herewith | ||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith | ||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith | ||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith | ||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, and 101.PRE). |
PAGERDUTY, INC. | |||||||||||
By: | /s/ Jennifer G. Tejada | ||||||||||
Jennifer G. Tejada | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
By: | /s/ Owen Howard Wilson | ||||||||||
Owen Howard Wilson | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
By: | /s/ Karen Walker | ||||||||||
Karen Walker | |||||||||||
Senior Vice President, Finance | |||||||||||
(Principal Accounting Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Jan. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,479 | $ 810 |
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Income Statement And Statement Of Comprehensive Income [Abstract] | ||||
Revenue | $ 53,772 | $ 42,750 | $ 154,272 | $ 120,425 |
Cost of revenue | 7,685 | 6,634 | 21,285 | 18,226 |
Gross profit | 46,087 | 36,116 | 132,987 | 102,199 |
Operating expenses: | ||||
Research and development | 16,156 | 12,619 | 46,705 | 35,160 |
Sales and marketing | 34,024 | 27,425 | 88,271 | 72,378 |
General and administrative | 17,746 | 12,765 | 45,899 | 38,464 |
Total operating expenses | 67,926 | 52,809 | 180,875 | 146,002 |
Loss from operations | (21,839) | (16,693) | (47,888) | (43,803) |
Interest income | 974 | 1,427 | 3,375 | 4,283 |
Interest expense | (4,133) | 0 | (5,741) | 0 |
Other (expense) income, net | (449) | 245 | (861) | 346 |
Loss before benefit from (provision for) income taxes | (25,447) | (15,021) | (51,115) | (39,174) |
Benefit from (provision for) income taxes | 4,839 | (244) | 4,360 | (725) |
Net loss | (20,608) | (15,265) | (46,755) | (39,899) |
Other comprehensive (loss) income: | ||||
Unrealized (loss) gain on investments | (422) | (50) | 497 | (50) |
Total comprehensive loss | $ (21,030) | $ (15,315) | $ (46,258) | $ (39,949) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.26) | $ (0.20) | $ (0.59) | $ (0.65) |
Weighted average shares used in calculating net loss per share, basic and diluted (in shares) | 79,937 | 75,992 | 78,835 | 61,628 |
Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands |
9 Months Ended |
---|---|
Oct. 31, 2020
USD ($)
| |
Statement of Cash Flows [Abstract] | |
Issuance of convertible senior notes, issuance costs paid | $ 8,835 |
Description of Business and Basis of Presentation |
9 Months Ended |
---|---|
Oct. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business PagerDuty, Inc. was incorporated under the laws of the state of Delaware in May 2010. PagerDuty acts as the central nervous system for the digital enterprise. PagerDuty harnesses digital signals from virtually any software-enabled system or device, combines it with human response data and orchestrates teams to take the right actions in real time. The Company’s products help organizations improve operations, accelerate innovation, increase revenue, mitigate security risk, and deliver a great customer experience. As used herein, “PagerDuty”, “we”, “our”, “the Company” and similar terms include PagerDuty, Inc., unless the context indicates otherwise. Initial Public Offering On April 15, 2019, the Company completed its initial public offering (“IPO”), pursuant to which the Company issued and sold 9,860,500 shares of common stock, inclusive of the over-allotment option, at a public offering price of $24.00 per share. The Company received net proceeds of $213.7 million, after deducting underwriters' discounts and commissions of $16.6 million and other issuance costs of $6.4 million. Immediately prior to the closing of the Company’s IPO, all shares of the redeemable convertible preferred stock automatically converted into 41,273,345 shares of common stock. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of January 31, 2020 was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended January 31, 2020, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The condensed consolidated financial statements include the results of PagerDuty, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. In the opinion of management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows, and statements of stockholders’ equity. The results of operations for the three and nine months ended October 31, 2020 are not necessarily indicative of the results to be expected for the full year ending January 31, 2021 or for any other interim period, or for any future year. The Company’s fiscal year ends on January 31. References to fiscal 2021, for example, refer to the fiscal year ended January 31, 2021. Convertible Senior Notes In June 2020, The Company issued $287.5 million aggregate principal amount of 1.25% Convertible Senior Notes due 2025 (the “Notes”). Refer to Note 10, “Debt and Financing Arrangements” for additional details. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the valuation of the Company’s stock-based awards, including the determination of fair value of common stock (prior to the closing of the IPO) and the fair value of the employee stock purchase plan (“ESPP”) expense, period of benefit for amortizing deferred contract costs, the determination of the allowance for doubtful accounts, the provision for income taxes, including the related valuation allowance and any uncertain tax positions, fair value of the liability and equity components of the Notes, fair value of acquired assets and assumed liabilities, impairment of goodwill and intangible assets, the incremental borrowing rate for lease liabilities, and estimates related to our revenue recognition, such as the assessment of performance obligations in our revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. In December 2019, the novel coronavirus and resulting disease (“COVID-19”) was reported and in March 2020 the World Health Organization declared it a pandemic. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our customers and our sales cycles, and impact on our employees, as discussed in more detail in the Overview section of our Management’s Discussion and Analysis. During the three and nine months ended October 31, 2020, this uncertainty resulted in a higher level of judgment related to our estimates and assumptions related to the estimate of credit losses for accounts receivable. As of the date of issuance of the financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments, or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Concentrations of Risk and Significant Customers The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, held-to-maturity investments, available-for-sale investments, and accounts receivable. All of the Company’s cash and cash equivalents and investments are invested in money market funds, United States (“U.S.”) Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality. No single customer accounted for 10% of the total accounts receivable balance as of October 31, 2020 or January 31, 2020. No single customer represented 10% or more of revenue for the three and nine months ended October 31, 2020 or 2019. Segment Information The Company manages operations and allocates resources as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Refer to Note 16, “Geographic Information” for information regarding the Company's long-lived assets and revenue by geography. Significant Accounting Policies There have been no significant changes to our significant accounting policies as compared to those described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, other than as set forth below. Convertible Senior Notes The Notes are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 470-20, Debt with Conversion and Other Options. Pursuant to ASC Subtopic 470-20, issuers of certain convertible debt instruments, such as the Notes, that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the liability component of the instrument is computed by estimating the fair value of a similar liability without the conversion option using a market-based approach. The amount of the equity component is then calculated by deducting the fair value of the liability component from the principal amount of the instrument. The difference between the principal amount and the liability component represents a debt discount that is amortized to interest expense over the respective term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components was based on their relative values. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance is based upon historical loss patterns, the age of each past due invoice, and an evaluation of the potential risk of loss associated with delinquent accounts. The allowance also reflects current market conditions and reasonable and supportable forecasts of future economic conditions. As of October 31, 2020, our allowance reflects considerations related to the COVID-19 pandemic and may increase in future periods as we ascertain future impacts to our customers and business. The allowance for doubtful accounts was $1.5 million and $0.8 million as of October 31, 2020 and January 31, 2020. Business Combinations The Company applies the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the acquisition. We allocate the purchase consideration to the net tangible and identifiable intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. Goodwill, Acquired Intangible Assets, and Impairment of Long-Lived Assets Goodwill. Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. No impairment charges were recorded during the three and nine months ended October 31, 2020 and 2019. Acquired Intangible Assets. Acquired intangible assets consist of identifiable intangible assets, primarily developed technology and customer relationships, resulting from our business acquisition. Intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives. Impairment of Long-Lived Assets. The carrying amounts of our long-lived assets, including property and equipment, lease right-of-use assets, capitalized internal-use software, and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful lives are shorter than originally estimated. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If long-lived assets are considered impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases, (“Topic 842”) (“ASU 2016-02”), which would require lessees to recognize most leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The Company adopted the standard using the optional alternative method on a prospective basis with an effective date as of the beginning of the Company’s fiscal year, February 1, 2020, and applied it to the operating leases that existed on that date. Prior year comparative financial information was not recast under the new standard and continues to be presented under ASC 840. The Company elected to utilize the package of practical expedients available for expired or existing contracts which allowed the Company to carryforward historical assessments of (a) whether contracts are or contain leases, (b) lease classification, and (c) initial direct costs. The Company elected to apply the short-term lease exception for all leases. Under the short-term lease exception, the Company will not recognize right-of-use assets or lease liabilities for leases that, at the acquisition date, have a remaining lease term of 12 months or less. As a result of implementing this guidance, the Company recognized a net operating right-of-use asset of $29.1 million and a $35.9 million operating lease liability in its condensed consolidated balance sheets as of February 1, 2020. The adoption of this guidance did not affect our condensed consolidated statements of operations or our condensed consolidated statements of cash flows. Refer to Note 9, “Leases” for further information. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (“Topic 326”) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. The Company adopted the standard as of the beginning of the Company’s fiscal year, February 1, 2020. The adoption of this guidance did not have a material impact to the condensed consolidated financial statements. In connection with the adoption, for purposes of identifying and measuring impairment, the policy election was made to exclude accrued interest from both the fair value and amortized cost basis of our available-for sale debt securities. Such accrued interest is recorded in prepaid expenses and other current assets. In January 2017, the FASB released Accounting Standards Update No. 2017-04, Intangibles— Goodwill and Other (“Topic 350”) which simplifies the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Previously, under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments of ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit’s fair value.. The amendments in this update were effective for an entity’s annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or fiscal year 2021 for the Company. The Company performs their impairment test on goodwill in the fourth quarter of each fiscal year. In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (“Topic 820”) (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements for certain types of investments. We adopted this standard in the first quarter of fiscal year 2020. The adoption did not have an effect on our consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (“Topic 740”): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intends to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning in fiscal 2022, although early adoption is permitted. The Company early adopted the standard as of the beginning of the Company’s fiscal year, February 1, 2020. The adoption of this guidance did not have a material impact to the condensed consolidated financial statements. Recently Issued Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update No. 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”) (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU 2020-06 will be effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted, but not before annual reporting periods beginning after December 15, 2020. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
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Cash, Cash Equivalents, and Investments |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, and Investments | Cash, Cash Equivalents, and Investments Cash, cash equivalents, and investments consisted of the following:
The following tables summarize the Company’s investments’ adjusted cost, net unrealized gains, and fair value by significant investment category as of October 31, 2020 and January 31, 2020. Gross realized gains or losses from sales of available-for-sale securities were not material for the three and nine months ended October 31, 2020.
All of the Company’s held-to-maturity securities have a contractual maturity of less than one year. The following table presents the Company’s available-for-sale securities by contractual maturity date as of October 31, 2020 and January 31, 2020:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows: Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace. Level 3—Valuations based on unobservable inputs that are supported by little or no market activity. The following table presents information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories:
The Company’s assets that are measured by management at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of October 31, 2020 and January 31, 2020, the Company’s Level 2 securities were priced by pricing vendors. These pricing vendors utilize observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities. The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable and accounts payable approximate fair value due to their short-term maturities and are excluded from the fair value table above. Convertible Senior Notes As of October 31, 2020, the estimated fair value of the Notes was approximately $291.7 million. The fair value was determined based on the quoted price for the Notes in an inactive market on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy.
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Business Combinations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations On October 1, 2020, the Company completed the acquisition of Rundeck Inc. (“Rundeck”), a leading provider of DevOps automation for enterprise. The acquisition of Rundeck strengthens our product and will enable our customers to resolve faster, reduce costs, and protect the customer experience. The Company acquired Rundeck for purchase consideration of $95.3 million in a combination of cash and common stock. The total purchase price consisted of the following:
The fair value of the stock and options recognized as purchase consideration was determined using the closing price of the Company’s common stock on the acquisition date. In addition to the purchase consideration, a portion of cash and stock for certain Rundeck key personnel attributable to post-combination services is subject to vest over two years from the closing of the acquisition, subject to on-going employee services and achievement of certain performance conditions as follow: •$3.7 million in future cash payments beginning in the fourth quarter of fiscal year 2021, which the Company will recognize within research and development over the vesting period of two years. •$3.3 million related to the fair value of restricted stock issued that will vest beginning from the acquisition date, which the Company will recognize as stock-based compensation expense over the vesting period of two years. The restricted shares are considered to be legally issued and outstanding on the date of issuance. In connection with the acquisition, the Company incurred transaction costs of $1.6 million within the general and administrative line of the Condensed Consolidated Statements of Operations. The acquisition was accounted for as a business combination and the total purchase consideration was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date and the excess was recorded as goodwill. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of October 31, 2020, the primary area that remains preliminary relates to the valuation of certain tax-related items. The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date:
The goodwill was primarily attributed to the value of synergies created with the Company’s current and future offerings. Goodwill is not expected to be deductible for income tax purposes. In connection with the acquisition, the Company recognized a net deferred tax liability for approximately $5.1 million, generated primarily from the difference between the tax basis and fair value of the acquired intangible assets, which increased goodwill. As the Company has a full valuation allowance as of October 31, 2020, we recorded an income tax benefit for this net deferred tax liability in the condensed consolidated statement of operations for the three months ended October 31, 2020. Refer to Note 15, Income Taxes, for further information The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
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Goodwill and Acquired Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The changes in the carrying amount of goodwill for the nine months ended October 31, 2020 are as follows:
Other intangible assets subject to amortization as of October 31, 2020 were as follows:
For the three and nine months ended October 31, 2020, amortization expense related to intangible assets was $0.3 million. No amortization expense was recorded during the three and nine months ended October 31, 2019. As of October 31, 2020, we expect amortization expense in future periods to be as follows:
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, consisted of the following:
(1) Gross property and equipment includes construction-in-progress for leasehold improvements and furniture and fixtures of $0.2 million and $5.1 million that had not yet been placed in service as of October 31, 2020 and January 31, 2020, respectively. The costs associated with construction-in-progress are not amortized until placed in service. Depreciation and amortization expense was $1.0 million and $0.6 million for the three months ended October 31, 2020 and 2019, respectively, and $2.9 million and $1.6 million for the nine months ended October 31, 2020 and 2019, respectively.
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Deferred Contract Costs |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Contract Costs | Deferred Contract CostsDeferred contract costs, which primarily consist of deferred sales commissions, were $28.7 million and $25.7 million as of October 31, 2020 and January 31, 2020, respectively. Amortization expense for deferred contract costs was $2.8 million and $2.1 million for the three months ended October 31, 2020 and 2019, respectively, and $7.9 million and $5.5 million for the nine months ended October 31, 2020 and 2019, respectively. There was no impairment charge related to the costs capitalized for the periods presented.Deferred Revenue and Performance Obligations The following table presents the changes to the Company’s deferred revenue:
For the three months ended October 31, 2020 and 2019, the majority of revenue recognized was from the deferred revenue balances at the beginning of each quarter. For the nine months ended October 31, 2020 and 2019, approximately half of revenue recognized was from the deferred revenue balance at the beginning of the period. As of October 31, 2020 and January 31, 2020, future estimated revenue related to performance obligations for subscriptions with terms of more than one year that are unsatisfied or partially unsatisfied at the end of the reporting periods was approximately $97.2 million and $75.7 million, respectively. The Company expects to satisfy the substantial majority of these unsatisfied performance obligations over the next 24 months and the remainder thereafter. The Company applied the optional exemption for subscriptions with terms of one year or less.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Operating Leases The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring between fiscal 2022 and fiscal 2029. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances. Our operating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments. Leases with a term of one year or less are not recognized on our condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. The following tables present information about leases on our condensed consolidated balance sheet.
As of October 31, 2020, the weighted average remaining lease term was 5.9 years and the weighted average discount rate used to determine the net present value of the lease liabilities was 3.7%. The following table presents information about leases on our condensed consolidated statement of operations.
The following table presents supplemental cash flow information about our leases.
As of October 31, 2020, remaining maturities of lease liabilities are as follows:
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Debt and Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Financing Arrangements | Debt and Financing Arrangements Convertible Senior Notes On June 25, 2020, the Company issued $287.5 million in aggregate principal amount of the Notes in a private offering pursuant to an Indenture dated June 25, 2020 (the “Indenture”). The total net proceeds from the debt offering, after deducting initial purchaser discounts and debt issuance costs, paid or payable by us, were $278.2 million. The Notes are senior, unsecured obligations of the Company and will accrue interest payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021, at a rate of 1.25% per year. The Notes will mature on July 1, 2025, unless such notes are converted, redeemed or repurchased earlier. The Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election in the manner and subject to the terms and conditions provided in the Indenture. Holders of the Notes may convert all or any portion of their Notes at their option at any time prior to the close of business on April 1, 2025, only under the following circumstances: •During any fiscal quarter commencing after the fiscal quarter ending on October 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; •During the five business day period after any ten consecutive trading day period (the measurement period) in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; •If the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or •Upon the occurrence of specified corporate events, as noted in the Indenture. On or after April 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. The conversion rate will initially be 24.9507 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $40.08 per share of common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture, but will not be adjusted for accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a fundamental change, as defined in the Indenture. The Company may not redeem the Notes prior to July 6, 2023. The Company may redeem for cash all or any portion of the Notes, at its option, on a redemption date occurring on or after July 6, 2023 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of the common stock has been at least 130% of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If the Company undergoes a fundamental change (as defined in the Indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding Notes may declare the entire principal of all the Notes plus accrued and unpaid interest to be immediately due and payable. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated using a discount rate of 7.30%, which was determined by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component representing the conversion option was $70.8 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification, and the equity component was recorded in additional paid-in-capital in the accompanying condensed consolidated balance sheet. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense at an annual effective interest rate of 7.88% over the contractual terms of the Notes. The interest rate was based on the interest rate of similar liabilities at the time of issuance that did not have associated convertible features. The debt component is classified as a long-term liability as of October 31, 2020. In accounting for the issuance costs related to the Notes, we allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were $7.0 million and will be amortized to interest expense using the effective interest method over the contractual term of the Notes. Issuance costs attributable to the equity component were $2.3 million and were netted with the equity component in additional paid-in capital. The net carrying amount of the liability component of the Notes was as follows:
The net carrying amount of the equity component of the Notes was as follows:
Interest expense recognized related to the Notes is as follows:
Capped Call Transactions In connection with the offering of the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain financial institution counterparties (the “Option Counterparties”). The Capped Calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Notes. The Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $35.7 million incurred to purchase the Capped Calls were recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheet. The Capped Calls each have an initial strike price of approximately $40.08 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $61.66 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 7.2 million shares of our common stock. The Capped Calls are subject to automatic exercise over a 40 trading day period commencing on May 2, 2025, subject to earlier termination under certain circumstances.
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Commitments and Contingencies |
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Oct. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters From time to time in the normal course of business, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company is not currently a party to any legal proceedings and does not anticipate any pending or threatened litigation that would be expected to have a material adverse effect on its financial condition, results of operations, or cash flows. Warranties and Indemnification The Company has entered into service-level agreements with a portion of its customers defining levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet the defined levels of uptime. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred or accrued any material liabilities related to these agreements in the financial statements.
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Deferred Revenue and Performance Obligations |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue and Performance Obligations | Deferred Contract CostsDeferred contract costs, which primarily consist of deferred sales commissions, were $28.7 million and $25.7 million as of October 31, 2020 and January 31, 2020, respectively. Amortization expense for deferred contract costs was $2.8 million and $2.1 million for the three months ended October 31, 2020 and 2019, respectively, and $7.9 million and $5.5 million for the nine months ended October 31, 2020 and 2019, respectively. There was no impairment charge related to the costs capitalized for the periods presented.Deferred Revenue and Performance Obligations The following table presents the changes to the Company’s deferred revenue:
For the three months ended October 31, 2020 and 2019, the majority of revenue recognized was from the deferred revenue balances at the beginning of each quarter. For the nine months ended October 31, 2020 and 2019, approximately half of revenue recognized was from the deferred revenue balance at the beginning of the period. As of October 31, 2020 and January 31, 2020, future estimated revenue related to performance obligations for subscriptions with terms of more than one year that are unsatisfied or partially unsatisfied at the end of the reporting periods was approximately $97.2 million and $75.7 million, respectively. The Company expects to satisfy the substantial majority of these unsatisfied performance obligations over the next 24 months and the remainder thereafter. The Company applied the optional exemption for subscriptions with terms of one year or less.
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Common Stock and Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Stockholders' Equity | Common Stock and Stockholders’ Equity Redeemable Convertible Preferred Stock Immediately prior to the completion of the IPO in April 2019, all shares of redeemable convertible preferred stock then outstanding were converted into 41,273,345 shares of common stock on a one-to-one basis and then immediately reclassified into common stock. Equity Incentive Plans The Company has two equity incentive plans: the 2010 Stock Plan (the “2010 Plan”) and the 2019 Equity Incentive Plan (the “2019 Plan”, collectively the “Stock Plans”). Upon completion of the Company’s IPO in April 2019, the Company ceased granting awards under the 2010 Plan, and all shares that remained available for future issuance under the 2010 Plan at that time were transferred to the 2019 Plan. The 2019 Plan superseded and replaced the 2010 Plan. As of October 31, 2020 and January 31, 2020, respectively, the Company was authorized to grant up to 17,956,224 shares and 13,126,301 shares of common stock under the Stock Plans. In March 2019, the Company granted 3,041,000 stock options to existing employees with 50 percent of these options vesting over four years from the grant date and 50 percent vesting over five years from the grant date. The Company currently uses authorized and unissued shares to satisfy stock award exercises. As of October 31, 2020 and January 31, 2020, there were 13,188,640 shares and 11,841,156 shares available for future issuance under the Stock Plans, respectively. Shares of common stock reserved for future issuance are as follows:
Stock Option Activity Stock option activity is as follows:
The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options on the date of grant. The Company accounts for forfeitures as they occur. The following assumptions were used to calculate the fair value of employee stock option grants made during the periods:
Stock options granted during the three months ended October 31, 2020 and 2019 had a weighted average grant date fair value of $23.04 and $11.72 per share, respectively. The aggregate intrinsic value of stock options exercised during the three months ended October 31, 2020 and 2019 was $19.0 million and $21.8 million, respectively. Stock options granted during the nine months ended October 31, 2020 and 2019 had a weighted average grant date fair value of $14.64 and $10.84 per share, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended October 31, 2020 and 2019 was $42.0 million and $52.5 million, respectively. The intrinsic value for options exercised is the difference between the market value of the stock and the exercise price of the stock option at the date of exercise. As of October 31, 2020 there was approximately $35.1 million of total unrecognized compensation cost related to unvested stock options granted under the Stock Plans, which will be recognized over a weighted average period of 2.8 years. Restricted Stock Units A summary of the Company’s RSU activity and related information is as follow:
The Company uses the fair value of RSUs based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur. As of October 31, 2020, there was $81.7 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 3.4 years based on vesting under the award service conditions. In connection with the acquisition of Rundeck, the Company agreed to grant restricted stock units (“RSUs”) to Rundeck employees who joined the Company upon the effective date of the acquisition, with a value totaling approximately $14.6 million. The amount will be ratably recognized as stock-based compensation over the requisite service period of four years. Employee Stock Purchase Plan In April 2019, the Board adopted and approved the 2019 Employee Stock Purchase Plan, which became effective on April 11, 2019. The ESPP initially reserved and authorized the issuance of up to a total of 1,850,000 shares of common stock to participating employees. Pursuant to the terms of the ESPP, the number of shares reserved under the ESPP increased by 777,916 shares on February 1, 2020. The ESPP generally provides for 24-month offering periods, with each offering period consisting of four six-month purchase periods, except for the initial offering period which began on April 11, 2019 and ended on December 13, 2019. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s stock as of the beginning of the offering period or (2) the fair market value of the Company’s stock on the purchase date, as defined in the ESPP. During the three months ended October 31, 2020 and 2019, the Company recognized $1.1 million and $1.5 million of stock-based compensation expense related to the ESPP, respectively. During the nine months ended October 31, 2020 and 2019, the Company recognized $3.9 million and $3.7 million of stock-based compensation expense related to the ESPP, respectively. During the three months ended October 31, 2020 and 2019, the Company withheld $1.7 million and $1.5 million in contributions from employees, respectively. During the nine months ended October 31, 2020 and 2019, the Company withheld $5.2 million and $4.1 million in contributions from employees, respectively. During the three months ended October 31, 2020, there were no purchases related to the ESPP. During the nine months ended October 31, 2020, 181,253 shares of common stock were issued under the ESPP at a purchase price of $19.63. During the three and nine months ended October 31, 2019, there were no purchases related to the ESPP. Stock-Based Compensation Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows:
In the three and nine months ended October 31, 2020, we recorded a one-time stock-based compensation expense of $3.1 million related to the modification of certain option awards.
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss per Share The following table presents the calculation of basic and diluted net loss per share:
Since the Company was in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
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Income Taxes |
9 Months Ended |
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Oct. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income (or loss) relates, changes in how the Company does business, and tax law developments. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% as a result of our U.S. losses for which no benefit will be realized, as well as our foreign operations which are subject to tax rates that differ from those in the U.S. The Company recorded an income tax benefit of $4.8 million for the three months ended October 31, 2020 and an income tax expense of $0.2 million for the three months ended October 31, 2019. The Company recorded an income tax benefit of $4.4 million for the nine months ended October 31, 2020 and an income tax expense of $0.7 million for the nine months ended October 31, 2019. The decrease in the Company’s income tax provision for the three and nine months ended October 31, 2020, relative to the respective prior periods, was primarily due to a reduction in our valuation allowance from the increase in the deferred tax liability associated with the acquired intangible assets from the acquisition of Rundeck, resulting in a $5.1 million deferred tax benefit.
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Geographic Information |
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Geographic Information | Geographic Information Revenue by location is determined by the billing address of the customer. The following table sets forth revenue by geographic area:
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Subsequent Events |
9 Months Ended |
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Oct. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated subsequent events through December 4, 2020. |
Summary of Significant Accounting Policies (Policies) |
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Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of January 31, 2020 was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended January 31, 2020, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The condensed consolidated financial statements include the results of PagerDuty, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. In the opinion of management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows, and statements of stockholders’ equity. The results of operations for the three and nine months ended October 31, 2020 are not necessarily indicative of the results to be expected for the full year ending January 31, 2021 or for any other interim period, or for any future year. The Company’s fiscal year ends on January 31. References to fiscal 2021, for example, refer to the fiscal year ended January 31, 2021.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s most significant estimates and judgments involve the valuation of the Company’s stock-based awards, including the determination of fair value of common stock (prior to the closing of the IPO) and the fair value of the employee stock purchase plan (“ESPP”) expense, period of benefit for amortizing deferred contract costs, the determination of the allowance for doubtful accounts, the provision for income taxes, including the related valuation allowance and any uncertain tax positions, fair value of the liability and equity components of the Notes, fair value of acquired assets and assumed liabilities, impairment of goodwill and intangible assets, the incremental borrowing rate for lease liabilities, and estimates related to our revenue recognition, such as the assessment of performance obligations in our revenue arrangements and the fair value assigned to each performance obligation, among others. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
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Concentrations of Risk and Significant Customers | Concentrations of Risk and Significant Customers The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, held-to-maturity investments, available-for-sale investments, and accounts receivable. All of the Company’s cash and cash equivalents and investments are invested in money market funds, United States (“U.S.”) Treasury securities, commercial paper, corporate debt securities, or U.S. Government agency securities that management believes to be of high credit quality.
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Segment Information | Segment Information The Company manages operations and allocates resources as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources.
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Convertible Senior Notes | Convertible Senior NotesThe Notes are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 470-20, Debt with Conversion and Other Options. Pursuant to ASC Subtopic 470-20, issuers of certain convertible debt instruments, such as the Notes, that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the liability component of the instrument is computed by estimating the fair value of a similar liability without the conversion option using a market-based approach. The amount of the equity component is then calculated by deducting the fair value of the liability component from the principal amount of the instrument. The difference between the principal amount and the liability component represents a debt discount that is amortized to interest expense over the respective term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components was based on their relative values |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsAccounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance is based upon historical loss patterns, the age of each past due invoice, and an evaluation of the potential risk of loss associated with delinquent accounts. The allowance also reflects current market conditions and reasonable and supportable forecasts of future economic conditions. |
Business Combinations | Business Combinations The Company applies the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the acquisition. We allocate the purchase consideration to the net tangible and identifiable intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable.
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Goodwill and Acquired Intangible Assets | Goodwill. Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. No impairment charges were recorded during the three and nine months ended October 31, 2020 and 2019. Acquired Intangible Assets. Acquired intangible assets consist of identifiable intangible assets, primarily developed technology and customer relationships, resulting from our business acquisition. Intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. The carrying amounts of our long-lived assets, including property and equipment, lease right-of-use assets, capitalized internal-use software, and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful lives are shorter than originally estimated. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If long-lived assets are considered impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. |
Recently Adopted/Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases, (“Topic 842”) (“ASU 2016-02”), which would require lessees to recognize most leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The Company adopted the standard using the optional alternative method on a prospective basis with an effective date as of the beginning of the Company’s fiscal year, February 1, 2020, and applied it to the operating leases that existed on that date. Prior year comparative financial information was not recast under the new standard and continues to be presented under ASC 840. The Company elected to utilize the package of practical expedients available for expired or existing contracts which allowed the Company to carryforward historical assessments of (a) whether contracts are or contain leases, (b) lease classification, and (c) initial direct costs. The Company elected to apply the short-term lease exception for all leases. Under the short-term lease exception, the Company will not recognize right-of-use assets or lease liabilities for leases that, at the acquisition date, have a remaining lease term of 12 months or less. As a result of implementing this guidance, the Company recognized a net operating right-of-use asset of $29.1 million and a $35.9 million operating lease liability in its condensed consolidated balance sheets as of February 1, 2020. The adoption of this guidance did not affect our condensed consolidated statements of operations or our condensed consolidated statements of cash flows. Refer to Note 9, “Leases” for further information. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (“Topic 326”) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. The Company adopted the standard as of the beginning of the Company’s fiscal year, February 1, 2020. The adoption of this guidance did not have a material impact to the condensed consolidated financial statements. In connection with the adoption, for purposes of identifying and measuring impairment, the policy election was made to exclude accrued interest from both the fair value and amortized cost basis of our available-for sale debt securities. Such accrued interest is recorded in prepaid expenses and other current assets. In January 2017, the FASB released Accounting Standards Update No. 2017-04, Intangibles— Goodwill and Other (“Topic 350”) which simplifies the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Previously, under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments of ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit’s fair value.. The amendments in this update were effective for an entity’s annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or fiscal year 2021 for the Company. The Company performs their impairment test on goodwill in the fourth quarter of each fiscal year. In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (“Topic 820”) (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements for certain types of investments. We adopted this standard in the first quarter of fiscal year 2020. The adoption did not have an effect on our consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (“Topic 740”): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intends to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning in fiscal 2022, although early adoption is permitted. The Company early adopted the standard as of the beginning of the Company’s fiscal year, February 1, 2020. The adoption of this guidance did not have a material impact to the condensed consolidated financial statements. Recently Issued Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update No. 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”) (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU 2020-06 will be effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted, but not before annual reporting periods beginning after December 15, 2020. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
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Fair Value Measurements | The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows: Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2—Valuations based on inputs that are directly or indirectly observable in the marketplace. Level 3—Valuations based on unobservable inputs that are supported by little or no market activity.
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Operating Leases | Operating Leases The Company has entered into various non-cancellable operating leases for its office spaces with lease periods expiring between fiscal 2022 and fiscal 2029. The operating lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances. Our operating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments. Leases with a term of one year or less are not recognized on our condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.
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Cash, Cash Equivalents, and Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Cash and Cash Equivalents | Cash, cash equivalents, and investments consisted of the following:
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Components of Available-for-sale Investments | Cash, cash equivalents, and investments consisted of the following:
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Components of Held-to-maturity Investments | Cash, cash equivalents, and investments consisted of the following:
The following tables summarize the Company’s investments’ adjusted cost, net unrealized gains, and fair value by significant investment category as of October 31, 2020 and January 31, 2020. Gross realized gains or losses from sales of available-for-sale securities were not material for the three and nine months ended October 31, 2020.
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Summary of Carrying Value of Available-for-sale Investments | The following tables summarize the Company’s investments’ adjusted cost, net unrealized gains, and fair value by significant investment category as of October 31, 2020 and January 31, 2020. Gross realized gains or losses from sales of available-for-sale securities were not material for the three and nine months ended October 31, 2020.
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Summary of Contractual Maturities of Available-for-sale Securities | The following table presents the Company’s available-for-sale securities by contractual maturity date as of October 31, 2020 and January 31, 2020:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information about Company's Financial Assets | The following table presents information about the Company’s financial assets that are required to be measured or disclosed at fair value using the above input categories:
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Business Combinations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Components | The total purchase price consisted of the following:
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Schedule of Allocation of Purchase Consideration | The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date:
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Schedule of Components of Identifiable Intangible Assets Acquired | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
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Goodwill and Acquired Intangible Assets (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine months ended October 31, 2020 are as follows:
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Schedule of Other Intangible Assets Subject to Amortization | Other intangible assets subject to amortization as of October 31, 2020 were as follows:
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Schedule of Expected Amortization Expense in Future Periods | As of October 31, 2020, we expect amortization expense in future periods to be as follows:
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Property and Equipment, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and equipment, net, consisted of the following:
(1) Gross property and equipment includes construction-in-progress for leasehold improvements and furniture and fixtures of $0.2 million and $5.1 million that had not yet been placed in service as of October 31, 2020 and January 31, 2020, respectively. The costs associated with construction-in-progress are not amortized until placed in service.
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information About Lease on Condensed Consolidated Balance Sheet | The following tables present information about leases on our condensed consolidated balance sheet.
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Information About Leases on Condensed Consolidated Statement of Operations and Supplemental Cash Flow Information | The following table presents information about leases on our condensed consolidated statement of operations.
The following table presents supplemental cash flow information about our leases.
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Schedule of Remaining Maturities of Lease Liabilities | As of October 31, 2020, remaining maturities of lease liabilities are as follows:
|
Debt and Financing Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Carrying Amount of Liability and Equity Components of Convertible Notes | The net carrying amount of the liability component of the Notes was as follows:
The net carrying amount of the equity component of the Notes was as follows:
Interest expense recognized related to the Notes is as follows:
|
Deferred Revenue and Performance Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Deferred Revenue | The following table presents the changes to the Company’s deferred revenue:
|
Common Stock and Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Shares of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance are as follows:
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Schedule of Stock Option Activity | Stock option activity is as follows:
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Schedule of Assumptions Used to Calculate Fair Value of Employee Stock Option Grants Made | The following assumptions were used to calculate the fair value of employee stock option grants made during the periods:
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Schedule of Restricted Stock Unit Activity | A summary of the Company’s RSU activity and related information is as follow:
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Schedule of Stock-based Compensation Expense | Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows:
|
Net Loss Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share:
|
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Schedule of Anti-dilutive Securities That Were Not Included in Diluted Per Share Calculations | Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
|
Geographic Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue By Geographic Location | Revenue by location is determined by the billing address of the customer. The following table sets forth revenue by geographic area:
|
Description of Business and Basis of Presentation (Details) - USD ($) |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 15, 2019 |
Apr. 14, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
Jun. 30, 2020 |
Jun. 25, 2020 |
|
Subsidiary, Sale of Stock [Line Items] | ||||||
Payments of other issuance costs | $ 0 | $ 5,603,000 | ||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued and sold (in shares) | 9,860,500 | |||||
Public offering price (in dollars per share) | $ 24.00 | |||||
Proceeds from sale of stock | $ 213,700,000 | |||||
Payments of underwriters' discounts and commissions | 16,600,000 | |||||
Payments of other issuance costs | $ 6,400,000 | |||||
Convertible Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt issued | $ 287,500,000 | $ 287,500,000 | ||||
Stated interest rate | 1.25% | 1.25% | ||||
Common stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares as a result of conversion (in shares) | 41,273,345 | 41,273,345 |
Summary of Significant Accounting Policies (Details) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 31, 2020
USD ($)
|
Oct. 31, 2019
USD ($)
|
Oct. 31, 2020
USD ($)
segment
|
Oct. 31, 2019
USD ($)
|
Feb. 01, 2020
USD ($)
|
Jan. 31, 2020
USD ($)
|
|
Accounting Policies [Abstract] | ||||||
Number of operating segments | segment | 1 | |||||
Allowance for doubtful accounts | $ 1,500,000 | $ 1,500,000 | $ 800,000 | |||
Goodwill impairment charges | 0 | $ 0 | 0 | $ 0 | ||
Net operating right-of-use asset | 25,790,000 | 25,790,000 | $ 29,100,000 | |||
Operating lease liability | $ 32,927,000 | $ 32,927,000 | $ 35,900,000 |
Cash, Cash Equivalents, and Investments - Contractual Maturity (Details) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Jan. 31, 2020 |
---|---|---|
Cost Basis | ||
Due within one year | $ 180,262 | $ 128,127 |
Due between one to five years | 38,705 | 71,076 |
Cost Basis | 218,967 | 199,203 |
Recorded Basis | ||
Due within one year | 180,779 | 128,169 |
Due between one to five years | 38,822 | 71,171 |
Recorded Basis | $ 219,601 | $ 199,340 |
Cash, Cash Equivalents, and Investments - Additional Information (Details) |
9 Months Ended |
---|---|
Oct. 31, 2020
USD ($)
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impairment loss recorded | $ 0 |
Business Combinations - Additional Information (Details) - Rundeck, Inc $ in Thousands |
Oct. 01, 2020
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Purchase consideration | $ 95,264 |
Vesting conditions, vesting period, period post closing of acquisition | 2 years |
Future cash payments attributable to post-combination services subject to vesting condition | $ 3,700 |
Aggregate transaction costs | 1,600 |
Net deferred tax liability recognized in connection with acquisition | 5,058 |
RSUs | |
Business Acquisition [Line Items] | |
Fair value of restricted stock issued attributable to post-combination services subject to vesting condition | $ 3,300 |
Business Combinations - Purchase Price Components (Details) - Rundeck, Inc $ in Thousands |
Oct. 01, 2020
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Cash paid to common and preferred stockholders, warrant holders, and vested option holders | $ 51,581 |
Fair value of future cash payments to common stockholders attributable to pre-combination service | 4,808 |
Total purchase consideration | 95,264 |
Fair value of common stock transferred | |
Business Acquisition [Line Items] | |
Fair value of equity interests issued and issuable | 33,941 |
Fair value of assumed options and restricted stock attributable to pre-combination service | |
Business Acquisition [Line Items] | |
Fair value of equity interests issued and issuable | $ 4,934 |
Business Combinations - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Oct. 01, 2020 |
Jan. 31, 2020 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 71,946 | $ 0 | |
Rundeck, Inc | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 1,925 | ||
Accounts receivable and other assets | 1,879 | ||
Identifiable intangible assets | 27,800 | ||
Goodwill | 71,946 | ||
Accounts payable and other liabilities | (548) | ||
Deferred revenue | (2,680) | ||
Deferred tax liabilities, net | (5,058) | ||
Total purchase consideration | $ 95,264 |
Business Combinations - Components of Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands |
Oct. 01, 2020 |
Oct. 31, 2020 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 27,800 | |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | 21,800 | |
Customer Relationships | Rundeck, Inc | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 21,800 | |
Useful Life | 10 years | |
Developed Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | 5,600 | |
Developed Technology | Rundeck, Inc | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 5,600 | |
Useful Life | 5 years | |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 400 | |
Trademarks | Rundeck, Inc | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 400 | |
Useful Life | 2 years |
Goodwill and Acquired Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Oct. 31, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of beginning of period | $ 0 |
Goodwill additions | 71,946 |
Balance as of end of period | $ 71,946 |
Goodwill and Acquired Intangible Assets - Schedule of Other Intangible Assets Subject to Amortization (Details) $ in Thousands |
9 Months Ended |
---|---|
Oct. 31, 2020
USD ($)
| |
Finite-Lived Intangible Assets [Line Items] | |
Cost | $ 27,800 |
Accumulated Amortization | (292) |
Net | 27,508 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Cost | 21,800 |
Accumulated Amortization | (182) |
Net | $ 21,618 |
Weighted Average Remaining Useful Life | 9 years 10 months 24 days |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Cost | $ 5,600 |
Accumulated Amortization | (93) |
Net | $ 5,507 |
Weighted Average Remaining Useful Life | 4 years 10 months 24 days |
Trademarks | |
Finite-Lived Intangible Assets [Line Items] | |
Cost | $ 400 |
Accumulated Amortization | (17) |
Net | $ 383 |
Weighted Average Remaining Useful Life | 1 year 10 months 24 days |
Goodwill and Acquired Intangible Assets - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense related to intangible assets | $ 300,000 | $ 0 | $ 300,000 | $ 0 |
Goodwill and Acquired Intangible Assets - Schedule of Expected Amortization Expense in Future Periods (Details) $ in Thousands |
Oct. 31, 2020
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2021 | $ 875 |
2022 | 3,500 |
2023 | 3,433 |
2024 | 3,300 |
2025 | 3,300 |
Thereafter | 13,100 |
Net | $ 27,508 |
Deferred Contract Costs (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
Jan. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | |||||
Deferred contract costs | $ 28,700,000 | $ 28,700,000 | $ 25,700,000 | ||
Amortization of deferred contract costs | 2,800,000 | $ 2,100,000 | 7,894,000 | $ 5,499,000 | |
Impairment loss in relation to costs capitalized | $ 0 | $ 0 | $ 0 | $ 0 |
Leases - Information About Lease on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Feb. 01, 2020 |
---|---|---|
Assets | ||
Lease right-of-use assets | $ 25,790 | $ 29,100 |
Liabilities | ||
Lease liabilities | 5,152 | |
Lease liabilities, non-current | $ 27,775 |
Leases - Additional Information (Details) |
Oct. 31, 2020 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term | 5 years 10 months 24 days |
Weighted average discount rate | 3.70% |
Leases - Information About Leases on Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 31, 2020 |
Oct. 31, 2020 |
|
Leases [Abstract] | ||
Operating lease expense | $ 1,448 | $ 4,335 |
Short-term lease expense | 105 | 665 |
Variable lease expense | $ 335 | $ 998 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 31, 2020 |
Oct. 31, 2020 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 1,524 | $ 3,811 |
Leases - Schedule of Remaining Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Feb. 01, 2020 |
---|---|---|
Leases [Abstract] | ||
2021 | $ 1,561 | |
2022 | 6,299 | |
2023 | 6,492 | |
2024 | 6,674 | |
2025 | 6,872 | |
Thereafter | 8,942 | |
Gross lease payments | 36,840 | |
Less: Imputed interest | (3,913) | |
Total | $ 32,927 | $ 35,900 |
Debt and Financing Arrangements - Net Carrying Amount (Details) - USD ($) $ in Thousands |
Oct. 31, 2020 |
Jun. 25, 2020 |
---|---|---|
Equity Component: | ||
Proceeds allocated to the conversion options (debt discount) | $ 70,768 | $ 70,800 |
Less: issuance costs | (2,290) | |
Carrying amount of the equity component | 68,478 | |
Convertible Senior Notes | ||
Liability Component: | ||
Principal | 287,500 | |
Less: unamortized debt discount | (66,680) | |
Less: unamortized issuance costs | (6,609) | |
Net carrying amount | $ 214,211 |
Debt and Financing Arrangements - Interest Expense (Details) - Convertible Senior Notes - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 31, 2020 |
Oct. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 898 | $ 1,248 |
Amortization of debt discount | 2,943 | 4,088 |
Amortization of debt issuance costs | 292 | 405 |
Total interest expense related to the Notes | $ 4,133 | $ 5,741 |
Deferred Revenue and Performance Obligations - Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Increase (Decrease) In Contract with Customer, Liability [Roll Forward] | ||||
Deferred revenue, beginning of period | $ 101,180 | $ 77,797 | $ 92,569 | $ 64,104 |
Billings | 57,636 | 45,577 | 166,747 | 136,945 |
Deferred revenue assumed in the Rundeck acquisition | 2,680 | 0 | 2,680 | 0 |
Revenue recognized | (53,772) | (42,750) | (154,272) | (120,425) |
Deferred revenue, end of period | $ 107,724 | $ 80,624 | $ 107,724 | $ 80,624 |
Deferred Revenue and Performance Obligations - Additional Information (Details) - USD ($) $ in Millions |
Oct. 31, 2020 |
Jan. 31, 2020 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Future estimated revenue related to performance obligations | $ 97.2 | $ 75.7 |
Common Stock and Stockholders' Equity - Shares Available for Issuance (Details) - shares |
Oct. 31, 2020 |
Jan. 31, 2020 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 13,188,640 | 11,841,156 |
Total common stock reserved at period end (in shares) | 31,419,527 | |
Stock options and RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding stock options and unvested RSUs outstanding (in shares) | 15,994,999 | |
Number of shares available for grant (in shares) | 13,188,640 | |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 2,235,888 |
Common Stock and Stockholders' Equity - Assumptions Used to Calculate Fair Value of Employee Stock Option Grants Made (Details) - Employee - Stock options |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | 42.20% | |||
Expected volatility, minimum | 43.00% | 43.00% | 42.00% | |
Expected volatility, maximum | 44.10% | 44.10% | 42.80% | |
Expected term (years) | 6 years 1 month 6 days | |||
Risk-free interest rate | 1.39% | |||
Risk-free interest rate, minimum | 0.20% | 0.20% | 1.39% | |
Risk-free interest rate, maximum | 0.39% | 0.47% | 2.48% | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 3 years 8 months 12 days | 3 years 8 months 12 days | 5 years 6 months | |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 10 months 24 days |
Common Stock and Stockholders' Equity - Restricted Stock Units Activity (Details) - RSUs |
9 Months Ended |
---|---|
Oct. 31, 2020
$ / shares
shares
| |
Number of RSUs | |
Outstanding, beginning balance (in shares) | shares | 1,114,911 |
Granted (in shares) | shares | 3,480,566 |
Vested, net of shares withheld for employee payroll taxes (in shares) | shares | (240,116) |
Canceled (in shares) | shares | (376,800) |
Outstanding, ending balance (in shares) | shares | 3,978,561 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 28.10 |
Granted (in dollars per share) | $ / shares | 20.02 |
Vested, net of shares withheld for employee payroll taxes (in dollars per share) | $ / shares | 22.68 |
Canceled (in dollars per share) | $ / shares | 21.76 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 21.92 |
Common Stock and Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 13,459 | $ 7,347 | $ 31,735 | $ 19,392 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 488 | 303 | 1,095 | 773 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 2,807 | 1,462 | 7,459 | 3,760 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 6,254 | 2,295 | 11,409 | 6,084 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 3,910 | $ 3,287 | $ 11,772 | $ 8,775 |
Net Loss Per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Numerator: | ||||
Net loss | $ (20,608) | $ (15,265) | $ (46,755) | $ (39,899) |
Denominator: | ||||
Weighted average shares used in calculating net loss per share, basic and diluted (in shares) | 79,937 | 75,992 | 78,835 | 61,628 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.26) | $ (0.20) | $ (0.59) | $ (0.65) |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (4,839) | $ 244 | $ (4,360) | $ 725 |
Deferred tax benefit related to reduction in valuation allowance from increase in deferred tax liability associated with acquired intangible assets from acquisition of Rundeck | $ 5,100 | $ 5,100 |
Geographic Information - Revenue by Location (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2020 |
Oct. 31, 2019 |
Oct. 31, 2020 |
Oct. 31, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 53,772 | $ 42,750 | $ 154,272 | $ 120,425 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 40,966 | 33,330 | 118,234 | 94,390 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 12,806 | $ 9,420 | $ 36,038 | $ 26,035 |
Geographic Information - Additional Information (Details) - Long-Lived Assets - Geographic Concentration Risk |
9 Months Ended | 12 Months Ended |
---|---|---|
Oct. 31, 2020 |
Jan. 31, 2020 |
|
United States | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 87.00% | 76.00% |
Canada | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.00% | 23.00% |
United Kingdom | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 1.00% |
Label | Element | Value |
---|---|---|
Restricted Cash | us-gaap_RestrictedCash | $ 53,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 0 |
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