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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Okta Inc | NASDAQ:OKTA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.53 | 0.56% | 96.01 | 80.00 | 125.00 | 96.66 | 95.001 | 96.90 | 983,558 | 05:00:09 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
|
|
26-4175727
(I.R.S. Employer
Identification Number)
|
|
|
301 Brannan Street
San Francisco, California 94107
(Address of Principal executive offices)
|
|
|
Large accelerated filer
|
¨
|
|
|
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
ý
|
|
|
|
|
Smaller reporting company
|
¨
|
|
|
|
|
|
|
Emerging growth company
|
ý
|
|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
•
|
our future financial performance, including our revenue, costs of revenue, gross profits, margins and operating expenses;
|
•
|
trends in our key business metrics;
|
•
|
the sufficiency of our cash and cash equivalents, investments, credit facility and cash provided by sales of our products and services to meet our liquidity needs;
|
•
|
market or other opportunities arising from business combinations; and
|
•
|
the impact of recent accounting pronouncements on our financial statements.
|
|
October 31, 2018
|
|
January 31, 2018
|
||||
|
|
As Adjusted
(1)
|
|||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
195,898
|
|
|
$
|
127,949
|
|
Short-term investments
|
350,105
|
|
|
101,765
|
|
||
Accounts receivable, net of allowances of $1,425 and $1,472
|
70,136
|
|
|
52,248
|
|
||
Deferred commissions
|
21,695
|
|
|
17,755
|
|
||
Prepaid expenses and other current assets
|
20,280
|
|
|
17,781
|
|
||
Total current assets
|
658,114
|
|
|
317,498
|
|
||
Property and equipment, net
|
44,251
|
|
|
12,540
|
|
||
Deferred commissions, noncurrent
|
47,756
|
|
|
40,755
|
|
||
Intangible assets, net
|
14,989
|
|
|
11,761
|
|
||
Goodwill
|
18,074
|
|
|
6,282
|
|
||
Other assets
|
13,525
|
|
|
10,427
|
|
||
Total assets
|
$
|
796,709
|
|
|
$
|
399,263
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
12,085
|
|
|
$
|
9,566
|
|
Accrued expenses and other current liabilities
|
6,305
|
|
|
6,187
|
|
||
Accrued compensation
|
20,250
|
|
|
12,374
|
|
||
Deferred revenue
|
206,146
|
|
|
159,816
|
|
||
Total current liabilities
|
244,786
|
|
|
187,943
|
|
||
Convertible senior notes, net
|
267,665
|
|
|
—
|
|
||
Deferred revenue, noncurrent
|
4,977
|
|
|
4,963
|
|
||
Other liabilities, noncurrent
|
34,778
|
|
|
7,017
|
|
||
Total liabilities
|
552,206
|
|
|
199,923
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|||
Preferred stock, par value $0.0001 per share; 100,000 shares authorized, no shares issued and outstanding as of October 31, 2018 and January 31, 2018.
|
—
|
|
|
—
|
|
||
Class A Common stock, par value $0.0001 per share; 1,000,000 shares authorized as of October 31, 2018 and January 31, 2018; 98,518 and 70,610 shares issued and outstanding as of October 31, 2018 and January 31, 2018, respectively.
|
10
|
|
|
7
|
|
||
Class B Common stock, par value $0.0001 per share; 120,000 shares authorized as of October 31, 2018 and January 31, 2018; 11,828 and 33,361 shares issued and outstanding as of October 31, 2018 and January 31, 2018, respectively.
|
1
|
|
|
3
|
|
||
Additional paid-in capital
|
706,810
|
|
|
565,653
|
|
||
Accumulated other comprehensive income (loss)
|
(918
|
)
|
|
391
|
|
||
Accumulated deficit
|
(461,400
|
)
|
|
(366,714
|
)
|
||
Total stockholders’ equity
|
244,503
|
|
|
199,340
|
|
||
Total liabilities and stockholders’ equity
|
$
|
796,709
|
|
|
$
|
399,263
|
|
(1)
|
See Note 2 for a summary of adjustments.
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
97,698
|
|
|
$
|
61,863
|
|
|
$
|
262,393
|
|
|
$
|
165,459
|
|
Professional services and other
|
7,878
|
|
|
5,048
|
|
|
21,390
|
|
|
14,036
|
|
||||
Total revenue
|
105,576
|
|
|
66,911
|
|
|
283,783
|
|
|
179,495
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Subscription
|
20,265
|
|
|
13,553
|
|
|
55,808
|
|
|
37,401
|
|
||||
Professional services and other
|
9,435
|
|
|
7,570
|
|
|
26,227
|
|
|
20,867
|
|
||||
Total cost of revenue
|
29,700
|
|
|
21,123
|
|
|
82,035
|
|
|
58,268
|
|
||||
Gross profit
|
75,876
|
|
|
45,788
|
|
|
201,748
|
|
|
121,227
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
27,596
|
|
|
19,190
|
|
|
72,354
|
|
|
51,472
|
|
||||
Sales and marketing
|
56,911
|
|
|
47,567
|
|
|
165,408
|
|
|
120,761
|
|
||||
General and administrative
|
19,848
|
|
|
13,546
|
|
|
55,873
|
|
|
37,133
|
|
||||
Total operating expenses
|
104,355
|
|
|
80,303
|
|
|
293,635
|
|
|
209,366
|
|
||||
Operating loss
|
(28,479
|
)
|
|
(34,515
|
)
|
|
(91,887
|
)
|
|
(88,139
|
)
|
||||
Other income (expense), net
|
(1,705
|
)
|
|
509
|
|
|
(4,682
|
)
|
|
872
|
|
||||
Loss before provision for (benefit from) income taxes
|
(30,184
|
)
|
|
(34,006
|
)
|
|
(96,569
|
)
|
|
(87,267
|
)
|
||||
Provision for (benefit from) income taxes
|
(667
|
)
|
|
(940
|
)
|
|
(1,883
|
)
|
|
(463
|
)
|
||||
Net loss
|
$
|
(29,517
|
)
|
|
$
|
(33,066
|
)
|
|
$
|
(94,686
|
)
|
|
$
|
(86,804
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.27
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(1.13
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
108,776
|
|
|
95,474
|
|
|
106,587
|
|
|
76,950
|
|
(1)
|
See Note 2 for a summary of adjustments.
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(29,517
|
)
|
|
$
|
(33,066
|
)
|
|
$
|
(94,686
|
)
|
|
$
|
(86,804
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized losses on available-for-sale securities
|
4
|
|
|
(58
|
)
|
|
(44
|
)
|
|
(70
|
)
|
||||
Foreign currency translation adjustments
|
(442
|
)
|
|
(81
|
)
|
|
(1,265
|
)
|
|
168
|
|
||||
Other comprehensive income (loss)
|
(438
|
)
|
|
(139
|
)
|
|
(1,309
|
)
|
|
98
|
|
||||
Comprehensive loss
|
$
|
(29,955
|
)
|
|
$
|
(33,205
|
)
|
|
$
|
(95,995
|
)
|
|
$
|
(86,706
|
)
|
(1)
|
See Note 2 for a summary of adjustments.
|
|
Nine Months Ended October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
As Adjusted
(1)
|
|||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(94,686
|
)
|
|
$
|
(86,804
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Stock-based compensation
|
53,899
|
|
|
35,292
|
|
||
Depreciation, amortization and accretion
|
5,824
|
|
|
5,111
|
|
||
Amortization of debt discount and issuance costs
|
10,315
|
|
|
—
|
|
||
Amortization of deferred commissions
|
14,963
|
|
|
10,911
|
|
||
Deferred income taxes
|
(2,269
|
)
|
|
(960
|
)
|
||
Non-cash charitable contributions
|
1,008
|
|
|
708
|
|
||
Other
|
153
|
|
|
997
|
|
||
Changes in operating assets and liabilities, net of business combination:
|
|
|
|
||||
Accounts receivable
|
(17,539
|
)
|
|
(12,742
|
)
|
||
Deferred commissions
|
(25,907
|
)
|
|
(16,230
|
)
|
||
Prepaid expenses and other assets
|
(4,238
|
)
|
|
(2,353
|
)
|
||
Accounts payable
|
1,354
|
|
|
6,255
|
|
||
Accrued compensation
|
7,973
|
|
|
5,931
|
|
||
Accrued expenses and other liabilities
|
8,182
|
|
|
(1,545
|
)
|
||
Deferred revenue
|
46,036
|
|
|
30,034
|
|
||
Net cash provided by (used in) operating activities
|
5,068
|
|
|
(25,395
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capitalization of internal-use software costs
|
(2,329
|
)
|
|
(4,072
|
)
|
||
Purchases of property and equipment
|
(14,253
|
)
|
|
(5,570
|
)
|
||
Purchases of securities available for sale
|
(478,138
|
)
|
|
(95,344
|
)
|
||
Proceeds from maturities of securities available for sale
|
219,650
|
|
|
21,985
|
|
||
Proceeds from sales of securities available for sale
|
12,470
|
|
|
1,538
|
|
||
Payments for business acquisition, net of cash acquired
|
(15,616
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(278,216
|
)
|
|
(81,463
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from initial public offering, net of underwriters' discounts and commissions
|
—
|
|
|
199,948
|
|
||
Proceeds from issuance of convertible senior notes, net of issuance costs
|
334,980
|
|
|
—
|
|
||
Purchase of convertible senior notes hedge
|
(80,040
|
)
|
|
—
|
|
||
Proceeds from issuance of warrants related to convertible notes
|
52,440
|
|
|
—
|
|
||
Payments of deferred offering costs
|
—
|
|
|
(4,038
|
)
|
||
Proceeds from stock option exercises, net of repurchases
|
28,524
|
|
|
25,800
|
|
||
Proceeds from shares issued in connection with employee stock purchase plan
|
6,654
|
|
|
—
|
|
||
Other
|
(206
|
)
|
|
(343
|
)
|
||
Net cash provided by financing activities
|
342,352
|
|
|
221,367
|
|
||
Effects of changes in foreign currency exchange rates on cash and cash equivalents
|
(990
|
)
|
|
53
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
68,214
|
|
|
114,562
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
136,233
|
|
|
23,282
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
204,447
|
|
|
$
|
137,844
|
|
|
|
|
|
||||
Supplementary cash flow disclosure:
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Vesting of early exercised common stock options
|
629
|
|
|
986
|
|
||
Issuance of common stock in connection with warrant exercises
|
—
|
|
|
272
|
|
||
Common stock issued as charitable contribution
|
1,008
|
|
|
708
|
|
||
Property and equipment acquired through tenant improvement allowance
|
22,237
|
|
|
—
|
|
||
Property and equipment and other accrued but not yet paid
|
1,431
|
|
|
710
|
|
||
Issuance of common stock in connection with business combination
|
—
|
|
|
2,160
|
|
||
Conversion of redeemable convertible preferred stock to common stock
|
—
|
|
|
228,362
|
|
||
Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets to the amounts shown in the statements of cash flows above:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
195,898
|
|
|
$
|
137,575
|
|
Restricted cash, noncurrent included in other assets
|
8,549
|
|
|
269
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
204,447
|
|
|
$
|
137,844
|
|
|
|
|
|
(1)
|
See Note 2 for a summary of adjustments.
|
|
Three Months Ended October 31, 2017
|
|
Nine Months Ended October 31, 2017
|
||||||||||||||||||||
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||||
|
(unaudited)
|
|
(unaudited)
|
||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription
|
$
|
62,705
|
|
|
$
|
(842
|
)
|
|
$
|
61,863
|
|
|
$
|
167,142
|
|
|
$
|
(1,683
|
)
|
|
$
|
165,459
|
|
Professional services and other
|
5,533
|
|
|
(485
|
)
|
|
5,048
|
|
|
15,098
|
|
|
(1,062
|
)
|
|
14,036
|
|
||||||
Total revenue
|
68,238
|
|
|
(1,327
|
)
|
|
66,911
|
|
|
182,240
|
|
|
(2,745
|
)
|
|
179,495
|
|
||||||
Gross profit
|
47,115
|
|
|
(1,327
|
)
|
|
45,788
|
|
|
123,972
|
|
|
(2,745
|
)
|
|
121,227
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
49,606
|
|
|
(2,039
|
)
|
|
47,567
|
|
|
126,383
|
|
|
(5,622
|
)
|
|
120,761
|
|
||||||
Total operating expenses
|
82,342
|
|
|
(2,039
|
)
|
|
80,303
|
|
|
214,988
|
|
|
(5,622
|
)
|
|
209,366
|
|
||||||
Loss before income taxes
|
(34,718
|
)
|
|
712
|
|
|
(34,006
|
)
|
|
(90,144
|
)
|
|
2,877
|
|
|
(87,267
|
)
|
||||||
Net loss
|
(33,778
|
)
|
|
712
|
|
|
(33,066
|
)
|
|
(89,681
|
)
|
|
2,877
|
|
|
(86,804
|
)
|
||||||
Net loss per share, basic and diluted
|
(0.35
|
)
|
|
—
|
|
|
(0.35
|
)
|
|
(1.17
|
)
|
|
0.04
|
|
|
(1.13
|
)
|
|
As of January 31, 2018
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
|
(unaudited)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Deferred commissions
|
$
|
16,481
|
|
|
$
|
1,274
|
|
|
$
|
17,755
|
|
Prepaid expenses and other current assets
|
16,973
|
|
|
808
|
|
|
17,781
|
|
|||
Total current assets
|
315,416
|
|
|
2,082
|
|
|
317,498
|
|
|||
Deferred commissions, noncurrent
|
10,971
|
|
|
29,784
|
|
|
40,755
|
|
|||
Total assets
|
367,397
|
|
|
31,866
|
|
|
399,263
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
162,633
|
|
|
$
|
(2,817
|
)
|
|
$
|
159,816
|
|
Total current liabilities
|
190,760
|
|
|
(2,817
|
)
|
|
187,943
|
|
|||
Deferred revenue, noncurrent
|
6,034
|
|
|
(1,071
|
)
|
|
4,963
|
|
|||
Total liabilities
|
203,811
|
|
|
(3,888
|
)
|
|
199,923
|
|
|||
Accumulated deficit
|
(402,468
|
)
|
|
35,754
|
|
|
(366,714
|
)
|
|||
Total stockholders’ equity
|
163,586
|
|
|
35,754
|
|
|
199,340
|
|
|||
Total liabilities and stockholders’ equity
|
367,397
|
|
|
31,866
|
|
|
399,263
|
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, the Company satisfies a performance obligation
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
88,704
|
|
|
$
|
56,215
|
|
|
$
|
239,459
|
|
|
$
|
152,185
|
|
International
|
16,872
|
|
|
10,696
|
|
|
44,324
|
|
|
27,310
|
|
||||
Total
|
$
|
105,576
|
|
|
$
|
66,911
|
|
|
$
|
283,783
|
|
|
$
|
179,495
|
|
|
|
|
|
|
|
|
|
(1)
|
T
he prior periods presented above have been adjusted to reflect the adoption of ASC 606
.
|
|
As of October 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
158,639
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,639
|
|
Commercial paper
|
4,982
|
|
|
—
|
|
|
—
|
|
|
4,982
|
|
||||
Total cash equivalents
|
$
|
163,621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,621
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper
|
$
|
99,039
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,039
|
|
U.S. treasury securities
|
211,344
|
|
|
—
|
|
|
(188
|
)
|
|
211,156
|
|
||||
Corporate debt securities
|
39,968
|
|
|
—
|
|
|
(58
|
)
|
|
39,910
|
|
||||
Total short-term investments
|
350,351
|
|
|
—
|
|
|
(246
|
)
|
|
350,105
|
|
||||
Total
|
$
|
513,972
|
|
|
$
|
—
|
|
|
$
|
(246
|
)
|
|
$
|
513,726
|
|
|
As of January 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Estimated
Fair Value
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
90,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,770
|
|
Total cash equivalents
|
$
|
90,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,770
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial paper
|
$
|
15,946
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,946
|
|
U.S. treasury securities
|
61,896
|
|
|
—
|
|
|
(158
|
)
|
|
61,738
|
|
||||
Corporate debt securities
|
24,125
|
|
|
—
|
|
|
(44
|
)
|
|
24,081
|
|
||||
Total short-term investments
|
101,967
|
|
|
—
|
|
|
(202
|
)
|
|
101,765
|
|
||||
Total
|
$
|
192,737
|
|
|
$
|
—
|
|
|
$
|
(202
|
)
|
|
$
|
192,535
|
|
|
As of October 31, 2018
|
|
As of January 31, 2018
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||||||
|
(unaudited)
|
||||||||||||||
Due within one year
|
$
|
350,351
|
|
|
$
|
350,105
|
|
|
$
|
93,421
|
|
|
$
|
93,237
|
|
Due between one to five years
|
—
|
|
|
—
|
|
|
8,546
|
|
|
8,528
|
|
||||
|
$
|
350,351
|
|
|
$
|
350,105
|
|
|
$
|
101,967
|
|
|
$
|
101,765
|
|
|
|
|
|
|
|
|
|
|
As of October 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
158,639
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,639
|
|
Commercial paper
|
—
|
|
|
4,982
|
|
|
—
|
|
|
4,982
|
|
||||
Total cash equivalents
|
$
|
158,639
|
|
|
$
|
4,982
|
|
|
$
|
—
|
|
|
$
|
163,621
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper
|
$
|
—
|
|
|
$
|
99,039
|
|
|
$
|
—
|
|
|
$
|
99,039
|
|
U.S. treasury securities
|
—
|
|
|
211,156
|
|
|
—
|
|
|
211,156
|
|
||||
Corporate debt securities
|
—
|
|
|
39,910
|
|
|
—
|
|
|
39,910
|
|
||||
Total short-term investments
|
—
|
|
|
350,105
|
|
|
—
|
|
|
350,105
|
|
||||
Total cash equivalents and short-term investments
|
$
|
158,639
|
|
|
$
|
355,087
|
|
|
$
|
—
|
|
|
$
|
513,726
|
|
|
As of January 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
90,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,770
|
|
Total cash equivalents
|
$
|
90,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,770
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper
|
$
|
—
|
|
|
$
|
15,946
|
|
|
$
|
—
|
|
|
$
|
15,946
|
|
U.S. treasury securities
|
—
|
|
|
61,738
|
|
|
—
|
|
|
61,738
|
|
||||
Corporate debt securities
|
—
|
|
|
24,081
|
|
|
—
|
|
|
24,081
|
|
||||
Total short-term investments
|
—
|
|
|
101,765
|
|
|
—
|
|
|
101,765
|
|
||||
Total cash equivalents and short-term investments
|
$
|
90,770
|
|
|
$
|
101,765
|
|
|
$
|
—
|
|
|
$
|
192,535
|
|
|
As of October 31, 2018
|
||||||
|
Net Carrying Amount Before Unamortized Debt Issuance Costs
|
|
Estimated
Fair Value
|
||||
|
|
|
|
||||
|
(unaudited)
|
||||||
Convertible senior notes
|
$
|
274,576
|
|
|
$
|
471,256
|
|
|
As of October 31, 2018
|
||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
|
|
|
|
|
|
||||||
|
(unaudited)
|
||||||||||
Capitalized internal-use software costs
|
$
|
19,202
|
|
|
$
|
(8,684
|
)
|
|
$
|
10,518
|
|
Purchased developed technology
|
5,170
|
|
|
(1,019
|
)
|
|
4,151
|
|
|||
Software licenses
|
1,023
|
|
|
(703
|
)
|
|
320
|
|
|||
|
$
|
25,395
|
|
|
$
|
(10,406
|
)
|
|
$
|
14,989
|
|
|
|
|
|
|
|
|
As of January 31, 2018
|
||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
Capitalized internal-use software costs
|
$
|
16,434
|
|
|
$
|
(5,172
|
)
|
|
$
|
11,262
|
|
Software licenses
|
1,057
|
|
|
(558
|
)
|
|
499
|
|
|||
Purchased developed technology
|
570
|
|
|
(570
|
)
|
|
—
|
|
|||
|
$
|
18,061
|
|
|
$
|
(6,300
|
)
|
|
$
|
11,761
|
|
|
|
|
|
|
|
•
|
during any fiscal quarter commencing after the fiscal quarter ending on April 30, 2018 (and only during such fiscal quarter), if the last reported sale price of Class A common stock for at least
20
trading days (whether or not consecutive) during the period of
30
consecutive trading days ending on, and including, the last trading
|
•
|
during the
five
business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2023 Notes for each trading day of that
five
consecutive trading day period was less than
98%
of the product of the last reported sale price of Class A common stock and the conversion rate on such trading day; or
|
•
|
upon the occurrence of specified corporate events, as described in the Indenture.
|
|
Three Months Ended October 31, 2018
|
|
Nine Months Ended October 31, 2018
|
||||
|
(unaudited)
|
||||||
Contractual interest expense
|
$
|
215
|
|
|
$
|
577
|
|
Amortization of debt issuance costs
|
299
|
|
|
777
|
|
||
Amortization of debt discount
|
3,604
|
|
|
9,539
|
|
||
Total
|
$
|
4,118
|
|
|
$
|
10,893
|
|
|
|
|
|
|
As of October 31, 2018
|
||
|
(unaudited)
|
||
Liability component:
|
|
||
Principal
|
$
|
345,000
|
|
Less: unamortized debt issuance costs and debt discount
|
(77,335
|
)
|
|
Net carrying amount
|
$
|
267,665
|
|
|
|
||
|
At Issuance
|
||
|
(unaudited)
|
||
Equity component:
|
|
||
2023 Notes
|
$
|
79,962
|
|
Less: issuance costs
|
(2,320
|
)
|
|
Carrying amount of the equity component
(1)
|
$
|
77,642
|
|
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
|
|
|
|
||||||||||
Cost of revenue
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
2,383
|
|
|
$
|
1,421
|
|
|
$
|
5,813
|
|
|
$
|
3,163
|
|
Professional services and other
|
1,305
|
|
|
979
|
|
|
3,277
|
|
|
2,186
|
|
||||
Research and development
|
6,291
|
|
|
5,174
|
|
|
15,776
|
|
|
12,913
|
|
||||
Sales and marketing
|
6,228
|
|
|
3,894
|
|
|
15,852
|
|
|
9,290
|
|
||||
General and administrative
|
5,335
|
|
|
2,940
|
|
|
13,181
|
|
|
7,740
|
|
||||
Total
|
$
|
21,542
|
|
|
$
|
14,408
|
|
|
$
|
53,899
|
|
|
$
|
35,292
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
October 31, 2018
|
|
|
(unaudited)
|
|
Stock options and unvested RSUs outstanding
|
24,250,317
|
|
Available for future stock option and RSU grants
|
12,651,706
|
|
Available for ESPP
|
3,035,697
|
|
|
39,937,720
|
|
|
|
|
Number of
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
Outstanding as of January 31, 2018
|
24,917,045
|
|
|
$
|
7.37
|
|
|
7.6
|
|
$
|
550,173
|
|
Granted
|
684,500
|
|
|
39.21
|
|
|
|
|
|
|||
Exercised
|
(5,184,832
|
)
|
|
5.51
|
|
|
|
|
|
|||
Canceled
|
(1,102,379
|
)
|
|
8.53
|
|
|
|
|
|
|||
Outstanding as of October 31, 2018 (unaudited)
|
19,314,334
|
|
|
$
|
8.93
|
|
|
7.2
|
|
$
|
954,692
|
|
As of October 31, 2018
|
|
|
|
|
|
|
|
|||||
Vested and exercisable (unaudited)
|
9,897,397
|
|
|
$
|
6.54
|
|
|
6.7
|
|
$
|
512,889
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
||||||
Expected volatility
|
—
|
|
41%
|
|
40%
|
|
40% - 41%
|
Expected term (in years)
|
—
|
|
6.3
|
|
6.3
|
|
6.3 - 6.4
|
Risk-free interest rate
|
—
|
|
1.87%
|
|
2.70%
|
|
1.87% - 2.21%
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
Number of
RSUs |
|
Weighted-
Average Grant Date Fair Value Per Share |
|||
|
|
|
|
|||
Outstanding as of January 31, 2018
|
2,862,929
|
|
|
$
|
24.38
|
|
Granted
|
3,133,189
|
|
|
53.27
|
|
|
Vested
|
(741,253
|
)
|
|
23.56
|
|
|
Forfeited
|
(318,882
|
)
|
|
33.28
|
|
|
Outstanding as of October 31, 2018 (unaudited)
|
4,935,983
|
|
|
$
|
42.27
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
||||||
Expected volatility
|
—
|
|
—
|
|
39% - 40%
|
|
32% - 37%
|
Expected term (in years)
|
—
|
|
—
|
|
0.5 -1.0
|
|
0.5 - 1.2
|
Risk-free interest rate
|
—
|
|
—
|
|
2.12% - 2.34%
|
|
0.95% - 1.22%
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss
(1)
|
$
|
(26,502
|
)
|
|
$
|
(3,015
|
)
|
|
$
|
(8,672
|
)
|
|
$
|
(24,394
|
)
|
|
$
|
(79,991
|
)
|
|
$
|
(14,695
|
)
|
|
$
|
(16,366
|
)
|
|
$
|
(70,438
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average shares outstanding - basic and diluted
|
97,665
|
|
|
11,111
|
|
|
25,039
|
|
|
70,435
|
|
|
90,045
|
|
|
16,542
|
|
|
14,508
|
|
|
62,442
|
|
||||||||
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.27
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net loss for the three and
nine months ended October 31, 2017
has been adjusted.
See Note 2 for a summary of adjustments.
|
|
As of October 31,
|
||||
|
2018
|
|
2017
|
||
|
|
|
|
||
|
(unaudited)
|
||||
Unvested restricted common stock issued and outstanding
|
400
|
|
|
800
|
|
Stock options issued and outstanding
|
19,314
|
|
|
27,118
|
|
Unvested RSUs issued and outstanding
|
4,936
|
|
|
2,506
|
|
Unvested restricted stock awards issued and outstanding
|
388
|
|
|
599
|
|
Shares related to convertible senior notes
|
7,134
|
|
|
—
|
|
Shares committed under the ESPP
|
359
|
|
|
1,082
|
|
Unvested shares subject to repurchase
|
67
|
|
|
248
|
|
|
32,598
|
|
|
32,353
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
97,698
|
|
|
$
|
61,863
|
|
|
$
|
262,393
|
|
|
$
|
165,459
|
|
Professional services and other
|
7,878
|
|
|
5,048
|
|
|
21,390
|
|
|
14,036
|
|
||||
Total revenue
|
105,576
|
|
|
66,911
|
|
|
283,783
|
|
|
179,495
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Subscription
(2)
|
20,265
|
|
|
13,553
|
|
|
55,808
|
|
|
37,401
|
|
||||
Professional services and other
(2)
|
9,435
|
|
|
7,570
|
|
|
26,227
|
|
|
20,867
|
|
||||
Total cost of revenue
|
29,700
|
|
|
21,123
|
|
|
82,035
|
|
|
58,268
|
|
||||
Gross profit
|
75,876
|
|
|
45,788
|
|
|
201,748
|
|
|
121,227
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
(2)
|
27,596
|
|
|
19,190
|
|
|
72,354
|
|
|
51,472
|
|
||||
Sales and marketing
(2)
|
56,911
|
|
|
47,567
|
|
|
165,408
|
|
|
120,761
|
|
||||
General and administrative
(2)
|
19,848
|
|
|
13,546
|
|
|
55,873
|
|
|
37,133
|
|
||||
Total operating expenses
|
104,355
|
|
|
80,303
|
|
|
293,635
|
|
|
209,366
|
|
||||
Operating loss
|
(28,479
|
)
|
|
(34,515
|
)
|
|
(91,887
|
)
|
|
(88,139
|
)
|
||||
Other income (expense), net
|
(1,705
|
)
|
|
509
|
|
|
(4,682
|
)
|
|
872
|
|
||||
Loss before provision for (benefit from) income taxes
|
(30,184
|
)
|
|
(34,006
|
)
|
|
(96,569
|
)
|
|
(87,267
|
)
|
||||
Provision for (benefit from) income taxes
|
(667
|
)
|
|
(940
|
)
|
|
(1,883
|
)
|
|
(463
|
)
|
||||
Net loss
|
$
|
(29,517
|
)
|
|
$
|
(33,066
|
)
|
|
$
|
(94,686
|
)
|
|
$
|
(86,804
|
)
|
(1)
|
See Note 2 to our condensed consolidated financial statements for a summary of adjustments.
|
(2)
|
Includes stock-based compensation expense as follows:
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of subscription revenue
|
$
|
2,383
|
|
|
$
|
1,421
|
|
|
$
|
5,813
|
|
|
$
|
3,163
|
|
Cost of professional services and other revenue
|
1,305
|
|
|
979
|
|
|
3,277
|
|
|
2,186
|
|
||||
Research and development
|
6,291
|
|
|
5,174
|
|
|
15,776
|
|
|
12,913
|
|
||||
Sales and marketing
|
6,228
|
|
|
3,894
|
|
|
15,852
|
|
|
9,290
|
|
||||
General and administrative
|
5,335
|
|
|
2,940
|
|
|
13,181
|
|
|
7,740
|
|
||||
Total stock-based compensation expense
|
$
|
21,542
|
|
|
$
|
14,408
|
|
|
$
|
53,899
|
|
|
$
|
35,292
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted (1)
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||
Subscription
|
93
|
%
|
|
92
|
%
|
|
92
|
%
|
|
92
|
%
|
Professional services and other
|
7
|
|
|
8
|
|
|
8
|
|
|
8
|
|
Total revenue
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue
|
|
|
|
|
|
|
|
||||
Subscription
|
19
|
|
|
20
|
|
|
20
|
|
|
21
|
|
Professional services and other
|
9
|
|
|
12
|
|
|
9
|
|
|
11
|
|
Total cost of revenue
|
28
|
|
|
32
|
|
|
29
|
|
|
32
|
|
Gross profit
|
72
|
|
|
68
|
|
|
71
|
|
|
68
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||
Research and development
|
26
|
|
|
29
|
|
|
25
|
|
|
29
|
|
Sales and marketing
|
54
|
|
|
71
|
|
|
58
|
|
|
67
|
|
General and administrative
|
19
|
|
|
20
|
|
|
20
|
|
|
21
|
|
Total operating expenses
|
99
|
|
|
120
|
|
|
103
|
|
|
117
|
|
Operating loss
|
(27
|
)
|
|
(52
|
)
|
|
(32
|
)
|
|
(49
|
)
|
Other income (expense), net
|
(2
|
)
|
|
1
|
|
|
(2
|
)
|
|
1
|
|
Loss before provision for (benefit from) income taxes
|
(29
|
)
|
|
(51
|
)
|
|
(34
|
)
|
|
(48
|
)
|
Provision for (benefit from) income taxes
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
Net loss
|
(28
|
)%
|
|
(49
|
)%
|
|
(33
|
)%
|
|
(48
|
)%
|
(1)
|
See Note 2 to our condensed consolidated financial statements for a summary of adjustments.
|
|
Three Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
97,698
|
|
|
$
|
61,863
|
|
|
$
|
35,835
|
|
|
58
|
%
|
Professional services and other
|
7,878
|
|
|
5,048
|
|
|
2,830
|
|
|
56
|
|
|||
Total revenue
|
$
|
105,576
|
|
|
$
|
66,911
|
|
|
$
|
38,665
|
|
|
58
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
93
|
%
|
|
92
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
7
|
|
|
8
|
|
|
|
|
|
|
|
|||
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
20,265
|
|
|
$
|
13,553
|
|
|
$
|
6,712
|
|
|
50
|
%
|
Professional services and other
|
9,435
|
|
|
7,570
|
|
|
1,865
|
|
|
25
|
|
|||
Total cost of revenue
|
$
|
29,700
|
|
|
$
|
21,123
|
|
|
$
|
8,577
|
|
|
41
|
|
Gross profit
|
$
|
75,876
|
|
|
$
|
45,788
|
|
|
$
|
30,088
|
|
|
66
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
79
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
(20
|
)
|
|
(50
|
)
|
|
|
|
|
|
|
|||
Total gross margin
|
72
|
|
|
68
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
27,596
|
|
|
$
|
19,190
|
|
|
$
|
8,406
|
|
|
44
|
%
|
Percentage of revenue
|
26
|
%
|
|
29
|
%
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
56,911
|
|
|
$
|
47,567
|
|
|
$
|
9,344
|
|
|
20
|
%
|
Percentage of revenue
|
54
|
%
|
|
71
|
%
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
General and administrative
|
$
|
19,848
|
|
|
$
|
13,546
|
|
|
$
|
6,302
|
|
|
47
|
%
|
Percentage of revenue
|
19
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||||
Other income (expense), net
|
$
|
(1,705
|
)
|
|
$
|
509
|
|
|
$
|
(2,214
|
)
|
|
N/A
|
|
Nine Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
262,393
|
|
|
$
|
165,459
|
|
|
$
|
96,934
|
|
|
59
|
%
|
Professional services and other
|
21,390
|
|
|
14,036
|
|
|
7,354
|
|
|
52
|
|
|||
Total revenue
|
$
|
283,783
|
|
|
$
|
179,495
|
|
|
$
|
104,288
|
|
|
58
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
92
|
%
|
|
92
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
8
|
|
|
8
|
|
|
|
|
|
|
|
|||
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
Nine Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
55,808
|
|
|
$
|
37,401
|
|
|
$
|
18,407
|
|
|
49
|
%
|
Professional services and other
|
26,227
|
|
|
20,867
|
|
|
5,360
|
|
|
26
|
|
|||
Total cost of revenue
|
$
|
82,035
|
|
|
$
|
58,268
|
|
|
$
|
23,767
|
|
|
41
|
|
Gross profit
|
$
|
201,748
|
|
|
$
|
121,227
|
|
|
$
|
80,521
|
|
|
66
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
79
|
%
|
|
77
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
(23
|
)
|
|
(49
|
)
|
|
|
|
|
|
|
|||
Total gross margin
|
71
|
|
|
68
|
|
|
|
|
|
|
|
|
Nine Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
72,354
|
|
|
$
|
51,472
|
|
|
$
|
20,882
|
|
|
41
|
%
|
Percentage of revenue
|
25
|
%
|
|
29
|
%
|
|
|
|
|
|
|
|
Nine Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
165,408
|
|
|
$
|
120,761
|
|
|
$
|
44,647
|
|
|
37
|
%
|
Percentage of revenue
|
58
|
%
|
|
67
|
%
|
|
|
|
|
|
|
|
Nine Months Ended October 31,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
General and administrative
|
$
|
55,873
|
|
|
$
|
37,133
|
|
|
$
|
18,740
|
|
|
50
|
%
|
Percentage of revenue
|
20
|
%
|
|
21
|
%
|
|
|
|
|
|
|
|
Nine Months Ended October 31,
|
|
|
||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||||
Other income (expense), net
|
$
|
(4,682
|
)
|
|
$
|
872
|
|
|
$
|
(5,554
|
)
|
|
N/A
|
|
As of October 31,
|
||||
|
2018
|
|
2017
|
||
|
|
|
|
||
Customers with Annual Contract Value (ACV) above $100,000
|
937
|
|
|
603
|
|
Dollar-Based Retention Rate for the trailing 12 months ended
|
120
|
%
|
|
123
|
%
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Calculated Billings
|
$
|
124,038
|
|
|
$
|
78,560
|
|
|
$
|
329,355
|
|
|
$
|
210,165
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Gross profit
|
$
|
75,876
|
|
|
$
|
45,788
|
|
|
$
|
201,748
|
|
|
$
|
121,227
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense included in cost of revenue
|
3,688
|
|
|
2,400
|
|
|
9,090
|
|
|
5,349
|
|
||||
Amortization of acquired intangibles
|
449
|
|
|
—
|
|
|
449
|
|
|
4
|
|
||||
Non-GAAP gross profit
|
$
|
80,013
|
|
|
$
|
48,188
|
|
|
$
|
211,287
|
|
|
$
|
126,580
|
|
Gross margin
|
72
|
%
|
|
68
|
%
|
|
71
|
%
|
|
68
|
%
|
||||
Non-GAAP gross margin
|
76
|
%
|
|
72
|
%
|
|
74
|
%
|
|
71
|
%
|
(1)
|
See Note 2 to our condensed consolidated financial statements for a summary of adjustments.
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Operating loss
|
$
|
(28,479
|
)
|
|
$
|
(34,515
|
)
|
|
$
|
(91,887
|
)
|
|
$
|
(88,139
|
)
|
Add:
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
21,542
|
|
|
14,408
|
|
|
53,899
|
|
|
35,292
|
|
||||
Charitable contributions
|
—
|
|
|
754
|
|
|
1,008
|
|
|
754
|
|
||||
Amortization of acquired intangibles
|
449
|
|
|
—
|
|
|
449
|
|
|
4
|
|
||||
Non-GAAP operating loss
|
$
|
(6,488
|
)
|
|
$
|
(19,353
|
)
|
|
$
|
(36,531
|
)
|
|
$
|
(52,089
|
)
|
Operating margin
|
(27
|
)%
|
|
(52
|
)%
|
|
(32
|
)%
|
|
(49
|
)%
|
||||
Non-GAAP operating margin
|
(6
|
)%
|
|
(29
|
)%
|
|
(13
|
)%
|
|
(29
|
)%
|
(1)
|
See Note 2 to our condensed consolidated financial statements for a summary of adjustments.
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
6,439
|
|
|
$
|
(9,471
|
)
|
|
$
|
5,068
|
|
|
$
|
(25,395
|
)
|
Less:
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment
|
(4,463
|
)
|
|
(414
|
)
|
|
(14,253
|
)
|
|
(5,570
|
)
|
||||
Capitalization of internal-use software costs
|
(604
|
)
|
|
(1,329
|
)
|
|
(2,329
|
)
|
|
(4,072
|
)
|
||||
Free Cash Flow
|
$
|
1,372
|
|
|
$
|
(11,214
|
)
|
|
$
|
(11,514
|
)
|
|
$
|
(35,037
|
)
|
Net cash used in investing activities
|
$
|
(10,545
|
)
|
|
$
|
(1,161
|
)
|
|
$
|
(278,216
|
)
|
|
$
|
(81,463
|
)
|
Net cash provided by financing activities
|
$
|
7,469
|
|
|
$
|
21,814
|
|
|
$
|
342,352
|
|
|
$
|
221,367
|
|
|
Three Months Ended October 31,
|
|
Nine Months Ended October 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
As Adjusted
(1)
|
|
|
As Adjusted
(1)
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Total revenue
|
$
|
105,576
|
|
|
$
|
66,911
|
|
|
$
|
283,783
|
|
|
$
|
179,495
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Deferred revenue (end of period)
|
211,123
|
|
|
137,155
|
|
|
211,123
|
|
|
137,155
|
|
||||
Unbilled receivables (beginning of period)
|
818
|
|
|
498
|
|
|
809
|
|
|
1,537
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Unbilled receivables (end of period)
|
(1,581
|
)
|
|
(902
|
)
|
|
(1,581
|
)
|
|
(902
|
)
|
||||
Deferred revenue (beginning of period)
|
(191,898
|
)
|
|
(125,102
|
)
|
|
(164,779
|
)
|
|
(107,120
|
)
|
||||
Calculated billings
|
$
|
124,038
|
|
|
$
|
78,560
|
|
|
$
|
329,355
|
|
|
$
|
210,165
|
|
(1)
|
See Note 2 to our condensed consolidated financial statements for a summary of adjustments.
|
|
Nine Months Ended October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
5,068
|
|
|
$
|
(25,395
|
)
|
Net cash used in investing activities
|
(278,216
|
)
|
|
(81,463
|
)
|
||
Net cash provided by financing activities
|
342,352
|
|
|
221,367
|
|
||
Effects of changes in foreign currency exchange rates on cash and cash equivalents
|
(990
|
)
|
|
53
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
$
|
68,214
|
|
|
$
|
114,562
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Less
Than 1
Year
|
|
1 to 3
Years
|
|
3 to 5
Years
|
|
More Than
5 Years
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Convertible senior notes
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
345,000
|
|
|
$
|
—
|
|
|
$
|
345,000
|
|
Operating lease obligations
(2)
|
13,251
|
|
|
52,308
|
|
|
56,060
|
|
|
124,213
|
|
|
245,832
|
|
|||||
Other obligations
(3)
|
18,471
|
|
|
33,074
|
|
|
15,010
|
|
|
—
|
|
|
66,555
|
|
|||||
Total contractual obligations
|
$
|
31,722
|
|
|
$
|
85,382
|
|
|
$
|
416,070
|
|
|
$
|
124,213
|
|
|
$
|
657,387
|
|
(1)
|
Represents the principal amount of the 2023 Notes. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.
|
(2)
|
Consists of future non-cancelable minimum rental payments under operating leases for our offices.
These payments have not been adjusted to reflect minimum sublease rental income of
$17.1 million
payable to us through 2024 pursuant to a non-cancellable sublease.
|
(3)
|
Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center, IT operations, sales and marketing activities, and interest obligations for the 2023 Notes that are payable in cash.
|
•
|
price our products effectively so that we are able to attract and retain customers without compromising our profitability;
|
•
|
attract new customers, successfully deploy and implement our platform, up-sell or otherwise increase our existing customers’ use of our platform, obtain customer renewals and provide our customers with excellent customer support;
|
•
|
increase our number of ISVs and channel partners;
|
•
|
adequately expand our sales force, and maintain or increase our sales force’s productivity;
|
•
|
successfully introduce new products, enhance existing products and address new use cases;
|
•
|
introduce our platform to new markets outside of the United States;
|
•
|
successfully compete against larger companies and new market entrants; and
|
•
|
increase awareness of our brand on a global basis.
|
•
|
the level of demand for our platform;
|
•
|
our ability to attract new customers and increase our existing customers’ use of our platform;
|
•
|
the timing and success of new product introductions by us or our competitors or any other change in the competitive landscape of our market;
|
•
|
pricing pressure as a result of competition or otherwise;
|
•
|
seasonal buying patterns for IT spending;
|
•
|
the mix of revenue attributable to larger transactions as opposed to smaller transactions and the associated volatility and timing of our transactions;
|
•
|
errors in our forecasting of the demand for our products, which could lead to lower revenue, increased costs or both;
|
•
|
increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive;
|
•
|
credit or other difficulties confronting our channel partners;
|
•
|
adverse litigation judgments, settlements of litigation and other disputes or other litigation-related or dispute-related costs;
|
•
|
significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform;
|
•
|
the impact of new accounting pronouncements and associated system implementations;
|
•
|
changes in the legislative or regulatory environment;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
expenses related to real estate, including our office leases, and other fixed expenses;
|
•
|
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; and
|
•
|
general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability.
|
•
|
the need to raise awareness about the uses and benefits of our platform, including products that our customers can use to manage and secure the identities of their customers;
|
•
|
the need to allay privacy and security concerns;
|
•
|
the discretionary nature of purchasing and budget cycles and decisions;
|
•
|
the competitive nature of evaluation and purchasing processes;
|
•
|
announcements or planned introductions of new products, features or functionality by us or our competitors; and
|
•
|
often lengthy purchasing approval processes.
|
•
|
require costly litigation to resolve and/or the payment of substantial damages or other amounts to settle such disputes;
|
•
|
require significant management time;
|
•
|
cause us to enter into unfavorable royalty or license agreements, if such arrangements are available at all;
|
•
|
require us to discontinue the sale of some or all of our products, or to remove or reduce features or functionality of our products;
|
•
|
require us to indemnify our customers or third-party service providers; and/or
|
•
|
require us to expend additional development resources to redesign our products.
|
•
|
unexpected costs and errors in the localization of our products, including translation into foreign languages and adaptation for local practices and regulatory requirements;
|
•
|
lack of familiarity and burdens of complying with foreign laws, legal standards, privacy standards, regulatory requirements, tariffs and other barriers;
|
•
|
laws and business practices favoring local competitors or commercial parties;
|
•
|
costs and liabilities related to compliance with the GDPR and disparate data privacy standards and enforcement;
|
•
|
practical difficulties of enforcing intellectual property rights in countries with fluctuating laws and standards and reduced or varied protection for intellectual property rights in some countries;
|
•
|
unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;
|
•
|
difficulties in managing systems integrators and technology partners;
|
•
|
differing technology standards;
|
•
|
longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
•
|
difficulties in managing and staffing international operations and differing employer/employee relationships and local employment laws;
|
•
|
fluctuations in exchange rates that may increase the volatility of our foreign-based revenue; and
|
•
|
potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems and restrictions on the repatriation of earnings.
|
•
|
the transaction involves both current products and products that are under development;
|
•
|
the customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our products;
|
•
|
the transaction involves certain favorable pricing options;
|
•
|
the transaction involves acceptance criteria or other terms that may delay revenue recognition; or
|
•
|
the transaction involves performance milestones or payment terms that depend upon contingencies.
|
•
|
develop and enhance our products;
|
•
|
continue to expand our product development, sales and marketing organizations;
|
•
|
hire, train and retain employees;
|
•
|
respond to competitive pressures or unanticipated working capital requirements; or
|
•
|
pursue acquisition opportunities.
|
•
|
overall performance of the equity markets and/or publicly-listed technology companies;
|
•
|
actual or anticipated fluctuations in our revenue or other operating metrics;
|
•
|
changes in the financial projections we provide to the public or our failure to meet these projections;
|
•
|
failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates and/or recommendations by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;
|
•
|
recruitment or departure of key personnel;
|
•
|
significant security breaches, technical difficulties or interruptions of our services;
|
•
|
the economy as a whole and market conditions in our industry;
|
•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;
|
•
|
new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
|
•
|
lawsuits threatened or filed against us;
|
•
|
other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and
|
•
|
sales of additional shares of our Class A common stock by us, our directors, our officers or our stockholders.
|
•
|
provide that our board of directors is classified into three classes of directors with staggered three-year terms;
|
•
|
permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships;
|
•
|
require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws;
|
•
|
authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
|
•
|
provide that only the Chairperson of our board of directors, our Chief Executive Officer, or a majority of our board of directors are authorized to call a special meeting of stockholders;
|
•
|
provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;
|
•
|
prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and
|
•
|
advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
|
•
|
any derivative action or proceeding brought on our behalf;
|
•
|
any action asserting a breach of fiduciary duty;
|
•
|
any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or
|
•
|
or any action asserting a claim against us that is governed by the internal affairs doctrine.
|
•
|
make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and our industry;
|
•
|
place us at a disadvantage compared to our competitors who have less debt;
|
•
|
limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes; and
|
•
|
make an acquisition of our company less attractive or more difficult.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference from
Form
|
||||
3.1
|
|
|
Exhibit 3.2 to Form S-1 filed on March 13, 2017
|
|||||
3.2
|
|
|
Exhibit 3.4 to Form S-1 filed on March 13, 2017
|
|||||
4.1
|
|
|
Exhibit 4.1 to Form S-1 filed on March 13, 2017
|
|||||
31.1
|
|
|
Filed herewith
|
|||||
31.2
|
|
|
Filed herewith
|
|||||
32.1*
|
|
|
Furnished herewith
|
|||||
101.INS
|
|
XBRL Instance 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
|
|
Okta, Inc.
|
||
|
|
|
|
|
|
|
|
December 6, 2018
|
|
/s/
|
William E. Losch
|
|
|
|
William E. Losch
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
|
1 Year Okta Chart |
1 Month Okta Chart |
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