XML 25 R13.htm IDEA: XBRL DOCUMENT v3.22.1
Leases
 9 Months Ended
Apr. 30, 2022
Leases [Abstract]  
Leases

NOTE 6. LEASES

We have operating leases for offices, research and development facilities and datacenters and finance leases for certain datacenter equipment. Our leases have remaining lease terms of one year to approximately seven years, some of which include options to renew or terminate. We do not include renewal options in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Our lease agreements do not contain any residual value guarantees or restrictive covenants.

Total operating lease cost was $10.8 million and $31.7 million for the three and nine months ended April 30, 2021, respectively, and $10.7 million and $32.4 million for the three and nine months ended April 30, 2022, respectively, excluding short-term lease costs, variable lease costs and sublease income, each of which were not material. Variable lease costs primarily include common area maintenance charges. Total finance lease cost was $0.3 million and $0.4 million for the three and nine months ended April 30, 2021, respectively, and $0.7 million and $1.7 million for the three and nine months ended April 30, 2022, respectively.

During the first quarter of fiscal 2021, we recorded impairment charges related to certain of our international office spaces, as well as an impairment charge related to an office space in the United States. We recorded a $2.8 million impairment in our condensed consolidated statement of operations for the three and nine months ended April 30, 2021. Of the $2.8 million impairment, approximately $1.9 million relates to the impairment of our operating lease right-of-use assets and approximately $0.9 million relates to the impairment of leasehold improvements. Additional charges related to asset impairments may be recorded in the future.

Supplemental balance sheet information related to leases is as follows:

 

 

 

As of

 

 

 

July 31,
2021

 

 

April 30,
2022

 

 

 

(in thousands)

 

Operating leases:

 

 

 

 

 

 

Operating lease right-of-use assets, gross

 

$

170,277

 

 

$

169,426

 

Accumulated amortization

 

 

(64,374

)

 

 

(85,999

)

Operating lease right-of-use assets, net

 

$

105,903

 

 

$

83,427

 

Operating lease liabilities—current

 

$

42,670

 

 

$

44,171

 

Operating lease liabilities—non-current

 

 

86,599

 

 

 

54,373

 

Total operating lease liabilities

 

$

129,269

 

 

$

98,544

 

Weighted average remaining lease term (in years):

 

 

3.1

 

 

 

2.5

 

Weighted average discount rate:

 

 

5.5

%

 

 

5.6

%

 

 

 

 

As of

 

 

 

July 31,
2021

 

 

April 30,
2022

 

 

 

(in thousands)

 

Finance leases:

 

 

 

 

 

 

Finance lease right-of-use assets, gross (1)

 

$

8,972

 

 

$

13,501

 

Accumulated amortization (1)

 

 

(687

)

 

 

(2,378

)

Finance lease right-of-use assets, net (1)

 

$

8,285

 

 

$

11,123

 

Finance lease liabilities—current (2)

 

$

1,772

 

 

$

2,680

 

Finance lease liabilities—non-current (3)

 

 

6,527

 

 

 

8,479

 

Total finance lease liabilities

 

$

8,299

 

 

$

11,159

 

Weighted average remaining lease term (in years):

 

 

4.7

 

 

 

4.2

 

Weighted average discount rate:

 

 

6.7

%

 

 

5.9

%

 

(1)
Included in the condensed consolidated balance sheets within property and equipment, net.
(2)
Included in the condensed consolidated balance sheets within accrued expenses and other current liabilities.
(3)
Included in the condensed consolidated balance sheets within other liabilities—non-current.

Supplemental cash flow and other information related to leases is as follows:

 

 

 

Three Months Ended
April 30,

 

 

Nine Months Ended
April 30,

 

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

 

(in thousands)

 

Cash paid for amounts included in the measurement of
   lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

11,860

 

 

$

11,353

 

 

$

34,234

 

 

$

36,910

 

Financing cash flows from finance leases

 

$

—

 

 

$

303

 

 

$

—

 

 

$

626

 

Lease liabilities arising from obtaining right-of-use assets:

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases

 

$

—

 

 

$

1,067

 

 

$

13,538

 

 

$

5,017

 

Finance leases

 

$

253

 

 

$

656

 

 

$

342

 

 

$

4,529

 

 

The undiscounted cash flows for our operating lease liabilities as of April 30, 2022 were as follows:

 

Fiscal Year Ending July 31:

 

Operating
Leases

 

 

Finance
Leases

 

 

Total

 

 

 

(in thousands)

 

2022 (remaining three months)

 

$

12,187

 

 

$

687

 

 

$

12,874

 

2023

 

 

48,177

 

 

 

2,750

 

 

 

50,927

 

2024

 

 

33,703

 

 

 

2,750

 

 

 

36,453

 

2025

 

 

7,359

 

 

 

2,750

 

 

 

10,109

 

2026

 

 

2,510

 

 

 

2,048

 

 

 

4,558

 

Thereafter

 

 

2,550

 

 

 

337

 

 

 

2,887

 

Total lease payments

 

 

106,486

 

 

 

11,322

 

 

 

117,808

 

Less: imputed interest

 

 

(7,942

)

 

 

(163

)

 

 

(8,105

)

Total lease obligation

 

 

98,544

 

 

 

11,159

 

 

 

109,703

 

Less: current lease obligations

 

 

(44,171

)

 

 

(2,680

)

 

 

(46,851

)

Long-term lease obligations

 

$

54,373

 

 

$

8,479

 

 

$

62,852

 

 

As of April 30, 2022, we had additional operating lease commitments of approximately $0.8 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during the remainder of fiscal 2022, with lease terms of approximately two years.