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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 | 95.10 | 98.90 | 96.66 | 95.001 | 96.90 | 983,558 | 01:00:00 |
☒
|
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
|
|
100 First Street, Suite 600
|
|
26-4175727
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
San Francisco
|
|
(I.R.S. Employer
Identification Number)
|
|
|
California
|
|
|
|
|
94105
|
|
|
|
|
(Address of Principal executive offices)
|
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A common stock, par value $0.0001 per share
|
|
OKTA
|
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
☒
|
|
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
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 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.
|
|
July 31, 2019
|
|
January 31, 2019
|
||||
|
|
|
As Adjusted (1)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
206,753
|
|
|
$
|
298,394
|
|
Short-term investments
|
350,712
|
|
|
265,374
|
|
||
Accounts receivable, net of allowances of $1,331 and $2,098
|
87,851
|
|
|
91,926
|
|
||
Deferred commissions
|
27,062
|
|
|
24,185
|
|
||
Prepaid expenses and other current assets
|
24,642
|
|
|
28,237
|
|
||
Total current assets
|
697,020
|
|
|
708,116
|
|
||
Property and equipment, net
|
51,858
|
|
|
52,921
|
|
||
Operating lease right-of-use assets
|
116,706
|
|
|
121,389
|
|
||
Deferred commissions, noncurrent
|
59,560
|
|
|
54,812
|
|
||
Intangible assets, net
|
34,712
|
|
|
13,897
|
|
||
Goodwill
|
47,964
|
|
|
18,089
|
|
||
Other assets
|
18,990
|
|
|
15,089
|
|
||
Total assets
|
$
|
1,026,810
|
|
|
$
|
984,313
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
3,492
|
|
|
$
|
2,431
|
|
Accrued expenses and other current liabilities
|
31,843
|
|
|
33,653
|
|
||
Accrued compensation
|
21,869
|
|
|
19,770
|
|
||
Convertible senior notes, net
|
279,741
|
|
|
271,628
|
|
||
Deferred revenue
|
283,724
|
|
|
245,622
|
|
||
Total current liabilities
|
620,669
|
|
|
573,104
|
|
||
Operating lease liabilities, noncurrent
|
143,706
|
|
|
147,046
|
|
||
Deferred revenue, noncurrent
|
7,469
|
|
|
8,768
|
|
||
Other liabilities, noncurrent
|
4,241
|
|
|
3,018
|
|
||
Total liabilities
|
776,085
|
|
|
731,936
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|||
Preferred stock, par value $0.0001 per share; 100,000 shares authorized, no shares issued and outstanding as of July 31, 2019 and January 31, 2019.
|
—
|
|
|
—
|
|
||
Class A Common stock, par value $0.0001 per share; 1,000,000 shares authorized as of July 31, 2019 and January 31, 2019; 106,595 and 101,093 shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively.
|
11
|
|
|
10
|
|
||
Class B Common stock, par value $0.0001 per share; 120,000 shares authorized as of July 31, 2019 and January 31, 2019; 10,153 and 11,059 shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively.
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
839,523
|
|
|
744,896
|
|
||
Accumulated other comprehensive loss
|
(1,653
|
)
|
|
(319
|
)
|
||
Accumulated deficit
|
(587,157
|
)
|
|
(492,211
|
)
|
||
Total stockholders’ equity
|
250,725
|
|
|
252,377
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,026,810
|
|
|
$
|
984,313
|
|
(1)
|
Adjusted for adoption of ASC 842, Leases. See Note 2.
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
132,494
|
|
|
$
|
87,854
|
|
|
$
|
249,657
|
|
|
$
|
164,695
|
|
Professional services and other
|
7,986
|
|
|
6,732
|
|
|
16,046
|
|
|
13,512
|
|
||||
Total revenue
|
140,480
|
|
|
94,586
|
|
|
265,703
|
|
|
178,207
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Subscription
|
27,917
|
|
|
19,211
|
|
|
52,457
|
|
|
35,543
|
|
||||
Professional services and other
|
10,863
|
|
|
9,017
|
|
|
21,418
|
|
|
16,792
|
|
||||
Total cost of revenue
|
38,780
|
|
|
28,228
|
|
|
73,875
|
|
|
52,335
|
|
||||
Gross profit
|
101,700
|
|
|
66,358
|
|
|
191,828
|
|
|
125,872
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
40,045
|
|
|
24,829
|
|
|
74,077
|
|
|
44,758
|
|
||||
Sales and marketing
|
78,385
|
|
|
59,004
|
|
|
160,497
|
|
|
108,497
|
|
||||
General and administrative
|
26,887
|
|
|
20,955
|
|
|
52,653
|
|
|
36,025
|
|
||||
Total operating expenses
|
145,317
|
|
|
104,788
|
|
|
287,227
|
|
|
189,280
|
|
||||
Operating loss
|
(43,617
|
)
|
|
(38,430
|
)
|
|
(95,399
|
)
|
|
(63,408
|
)
|
||||
Interest expense
|
(4,304
|
)
|
|
(4,058
|
)
|
|
(8,545
|
)
|
|
(6,775
|
)
|
||||
Other income, net
|
3,464
|
|
|
2,296
|
|
|
6,364
|
|
|
3,798
|
|
||||
Loss before benefit from income taxes
|
(44,457
|
)
|
|
(40,192
|
)
|
|
(97,580
|
)
|
|
(66,385
|
)
|
||||
Benefit from income taxes
|
(1,477
|
)
|
|
(985
|
)
|
|
(2,634
|
)
|
|
(1,216
|
)
|
||||
Net loss
|
$
|
(42,980
|
)
|
|
$
|
(39,207
|
)
|
|
$
|
(94,946
|
)
|
|
$
|
(65,169
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss per share, basic and diluted
|
$
|
(0.37
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.62
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net loss per share, basic and diluted
|
115,033
|
|
|
106,702
|
|
|
114,042
|
|
|
105,475
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(42,980
|
)
|
|
$
|
(39,207
|
)
|
|
$
|
(94,946
|
)
|
|
$
|
(65,169
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized losses on available-for-sale securities
|
194
|
|
|
77
|
|
|
389
|
|
|
(48
|
)
|
||||
Foreign currency translation adjustments
|
(1,390
|
)
|
|
(379
|
)
|
|
(1,723
|
)
|
|
(823
|
)
|
||||
Other comprehensive loss
|
(1,196
|
)
|
|
(302
|
)
|
|
(1,334
|
)
|
|
(871
|
)
|
||||
Comprehensive loss
|
$
|
(44,176
|
)
|
|
$
|
(39,509
|
)
|
|
$
|
(96,280
|
)
|
|
$
|
(66,040
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Common stock and additional paid in capital:
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
784,078
|
|
|
$
|
642,471
|
|
|
$
|
744,907
|
|
|
$
|
565,663
|
|
Issuance of common stock upon exercise of stock options and other activity, net
|
23,965
|
|
|
16,740
|
|
|
37,481
|
|
|
29,154
|
|
||||
Issuance of common stock for settlement of RSUs
|
—
|
|
|
—
|
|
|
2,809
|
|
|
—
|
|
||||
Stock-based compensation
|
31,492
|
|
|
18,308
|
|
|
54,338
|
|
|
32,660
|
|
||||
Equity component of convertible senior notes, net of issuance costs
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
77,631
|
|
||||
Issuance of warrants related to convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
52,440
|
|
||||
Purchase of convertible senior notes hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
(80,040
|
)
|
||||
Balance, end of period
|
839,535
|
|
|
677,508
|
|
|
839,535
|
|
|
677,508
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Accumulated deficit:
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
(544,177
|
)
|
|
(392,676
|
)
|
|
(492,211
|
)
|
|
(366,714
|
)
|
||||
Net loss
|
(42,980
|
)
|
|
(39,207
|
)
|
|
(94,946
|
)
|
|
(65,169
|
)
|
||||
Balance, end of period
|
(587,157
|
)
|
|
(431,883
|
)
|
|
(587,157
|
)
|
|
(431,883
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
(457
|
)
|
|
(178
|
)
|
|
(319
|
)
|
|
391
|
|
||||
Other comprehensive loss
|
(1,196
|
)
|
|
(302
|
)
|
|
(1,334
|
)
|
|
(871
|
)
|
||||
Balance, end of period
|
(1,653
|
)
|
|
(480
|
)
|
|
(1,653
|
)
|
|
(480
|
)
|
||||
Total stockholder’s equity
|
$
|
250,725
|
|
|
$
|
245,145
|
|
|
$
|
250,725
|
|
|
$
|
245,145
|
|
|
Six Months Ended July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
As Adjusted (1)
|
|||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(94,946
|
)
|
|
$
|
(65,169
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Stock-based compensation
|
53,959
|
|
|
32,357
|
|
||
Depreciation, amortization and accretion
|
7,916
|
|
|
3,699
|
|
||
Amortization of debt discount and issuance costs
|
8,113
|
|
|
6,413
|
|
||
Amortization of deferred commissions
|
13,192
|
|
|
9,613
|
|
||
Deferred income taxes
|
(3,057
|
)
|
|
(1,575
|
)
|
||
Non-cash charitable contributions
|
652
|
|
|
1,008
|
|
||
Other
|
84
|
|
|
18
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
4,459
|
|
|
(7,240
|
)
|
||
Deferred commissions
|
(21,372
|
)
|
|
(14,240
|
)
|
||
Prepaid expenses and other assets
|
1,534
|
|
|
622
|
|
||
Operating lease right-of-use assets
|
6,189
|
|
|
7,540
|
|
||
Accounts payable
|
1,368
|
|
|
767
|
|
||
Accrued compensation
|
4,717
|
|
|
498
|
|
||
Accrued expenses and other liabilities
|
1,304
|
|
|
2,061
|
|
||
Operating lease liabilities
|
(159
|
)
|
|
(4,554
|
)
|
||
Deferred revenue
|
36,175
|
|
|
26,811
|
|
||
Net cash provided by (used in) operating activities
|
20,128
|
|
|
(1,371
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capitalization of internal-use software costs
|
(1,330
|
)
|
|
(1,725
|
)
|
||
Purchases of property and equipment
|
(9,917
|
)
|
|
(9,790
|
)
|
||
Purchases of securities available for sale and other
|
(237,693
|
)
|
|
(320,018
|
)
|
||
Proceeds from maturities of securities available for sale
|
136,344
|
|
|
79,500
|
|
||
Proceeds from sales of securities available for sale and other
|
17,329
|
|
|
—
|
|
||
Purchases of intangible assets
|
(8,500
|
)
|
|
—
|
|
||
Payments for business acquisition, net of cash acquired
|
(44,223
|
)
|
|
(15,638
|
)
|
||
Net cash used in investing activities
|
(147,990
|
)
|
|
(267,671
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
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
|
|
||
Proceeds from stock option exercises, net of repurchases
|
27,453
|
|
|
21,055
|
|
||
Proceeds from shares issued in connection with employee stock purchase plan
|
9,005
|
|
|
6,654
|
|
||
Other, net
|
(126
|
)
|
|
(206
|
)
|
||
Net cash provided by financing activities
|
36,332
|
|
|
334,883
|
|
||
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
(1,187
|
)
|
|
(632
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(92,717
|
)
|
|
65,209
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
311,215
|
|
|
136,233
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
218,498
|
|
|
$
|
201,442
|
|
|
|
|
|
||||
Supplementary cash flow disclosure:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
431
|
|
|
$
|
—
|
|
Income taxes
|
654
|
|
|
—
|
|
||
Non-cash investing and financing activities:
|
|
|
|
||||
Vesting of early exercised common stock options
|
370
|
|
|
459
|
|
||
Common stock issued as charitable contribution
|
652
|
|
|
1,008
|
|
||
Operating lease right-of-use assets exchanged for lease obligations
|
1,665
|
|
|
125,526
|
|
||
Property and equipment acquired through tenant improvement allowance
|
—
|
|
|
22,237
|
|
||
Property and equipment and other accrued but not yet paid
|
602
|
|
|
605
|
|
||
Bonus settled through the issuance of common stock
|
2,809
|
|
|
—
|
|
||
Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
206,753
|
|
|
$
|
192,882
|
|
Restricted cash, current included in prepaid expenses and other current assets
|
307
|
|
|
—
|
|
||
Restricted cash, noncurrent included in other assets
|
11,438
|
|
|
8,560
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
218,498
|
|
|
$
|
201,442
|
|
|
|
|
|
(1)
|
Adjusted for adoption of ASC 842, Leases. See Note 2.
|
•
|
whether contractual arrangements that expired prior to or existed as of February 1, 2017, are or contain leases,
|
•
|
the classification of leases that expired prior to or existed as of February 1, 2017, and
|
•
|
initial direct costs for leases that existed as of February 1, 2017.
|
|
As of January 31, 2019
|
||||||||||
|
As Reported
|
|
Adoption of ASC 842
|
|
As Adjusted
|
||||||
|
(unaudited)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Prepaid expenses and other current assets
|
$
|
29,451
|
|
|
$
|
(1,214
|
)
|
|
$
|
28,237
|
|
Total current assets
|
709,330
|
|
|
(1,214
|
)
|
|
708,116
|
|
|||
Operating lease right-of-use assets
|
—
|
|
|
121,389
|
|
|
121,389
|
|
|||
Other noncurrent assets
|
15,286
|
|
|
(197
|
)
|
|
15,089
|
|
|||
Total assets
|
$
|
864,335
|
|
|
$
|
119,978
|
|
|
$
|
984,313
|
|
|
|
|
|
|
|
||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accrued expenses and other liabilities
|
$
|
24,740
|
|
|
$
|
8,913
|
|
|
$
|
33,653
|
|
Total current liabilities
|
564,191
|
|
|
8,913
|
|
|
573,104
|
|
|||
Other noncurrent liabilities
|
38,999
|
|
|
(35,981
|
)
|
|
3,018
|
|
|||
Operating lease liabilities, noncurrent
|
—
|
|
|
147,046
|
|
|
147,046
|
|
|||
Total liabilities
|
611,958
|
|
|
119,978
|
|
|
731,936
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
864,335
|
|
|
$
|
119,978
|
|
|
$
|
984,313
|
|
|
As of July 31, 2019
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
116,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,155
|
|
Corporate debt securities
|
4,999
|
|
|
—
|
|
|
(1
|
)
|
|
4,998
|
|
||||
Total cash equivalents
|
121,154
|
|
|
—
|
|
|
(1
|
)
|
|
121,153
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury securities
|
204,210
|
|
|
189
|
|
|
(22
|
)
|
|
204,377
|
|
||||
Corporate debt securities
|
146,135
|
|
|
203
|
|
|
(3
|
)
|
|
146,335
|
|
||||
Total short-term investments
|
350,345
|
|
|
392
|
|
|
(25
|
)
|
|
350,712
|
|
||||
Total
|
$
|
471,499
|
|
|
$
|
392
|
|
|
$
|
(26
|
)
|
|
$
|
471,865
|
|
|
As of January 31, 2019
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Estimated
Fair Value
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
247,426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
247,426
|
|
Corporate debt securities
|
3,409
|
|
|
—
|
|
|
(1
|
)
|
|
3,408
|
|
||||
Total cash equivalents
|
250,835
|
|
|
—
|
|
|
(1
|
)
|
|
250,834
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. treasury securities
|
195,913
|
|
|
37
|
|
|
(53
|
)
|
|
195,897
|
|
||||
Corporate debt securities
|
69,483
|
|
|
13
|
|
|
(19
|
)
|
|
69,477
|
|
||||
Total short-term investments
|
265,396
|
|
|
50
|
|
|
(72
|
)
|
|
265,374
|
|
||||
Total
|
$
|
516,231
|
|
|
$
|
50
|
|
|
$
|
(73
|
)
|
|
$
|
516,208
|
|
|
As of July 31, 2019
|
|
As of January 31, 2019
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||||||
|
(unaudited)
|
|
|
|
|
||||||||||
Due within one year
|
$
|
350,345
|
|
|
$
|
350,712
|
|
|
$
|
265,396
|
|
|
$
|
265,374
|
|
|
|
|
|
|
|
|
|
|
As of July 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
116,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,155
|
|
Corporate debt securities
|
—
|
|
|
4,998
|
|
|
—
|
|
|
4,998
|
|
||||
Total cash equivalents
|
116,155
|
|
|
4,998
|
|
|
—
|
|
|
121,153
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury securities
|
—
|
|
|
204,377
|
|
|
—
|
|
|
204,377
|
|
||||
Corporate debt securities
|
—
|
|
|
146,335
|
|
|
—
|
|
|
146,335
|
|
||||
Total short-term investments
|
—
|
|
|
350,712
|
|
|
—
|
|
|
350,712
|
|
||||
Total cash equivalents and short-term investments
|
$
|
116,155
|
|
|
$
|
355,710
|
|
|
$
|
—
|
|
|
$
|
471,865
|
|
|
As of January 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
247,426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
247,426
|
|
Corporate debt securities
|
—
|
|
|
3,408
|
|
|
—
|
|
|
3,408
|
|
||||
Total cash equivalents
|
247,426
|
|
|
3,408
|
|
|
—
|
|
|
250,834
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury securities
|
—
|
|
|
195,897
|
|
|
—
|
|
|
195,897
|
|
||||
Corporate debt securities
|
—
|
|
|
69,477
|
|
|
—
|
|
|
69,477
|
|
||||
Total short-term investments
|
—
|
|
|
265,374
|
|
|
—
|
|
|
265,374
|
|
||||
Total cash equivalents and short-term investments
|
$
|
247,426
|
|
|
$
|
268,782
|
|
|
$
|
—
|
|
|
$
|
516,208
|
|
|
As of July 31, 2019
|
||||||
|
Net Carrying Amount
Before Unamortized Debt Issuance Costs
|
|
Estimated
Fair Value
|
||||
|
|
|
|
||||
|
(unaudited)
|
||||||
Convertible senior notes
|
$
|
285,696
|
|
|
$
|
958,925
|
|
|
As of July 31, 2019
|
||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
|
|
|
|
|
|
||||||
|
(unaudited)
|
||||||||||
Capitalized internal-use software costs
|
$
|
21,494
|
|
|
$
|
(12,342
|
)
|
|
$
|
9,152
|
|
Purchased developed technology
|
28,800
|
|
|
(3,381
|
)
|
|
25,419
|
|
|||
Software licenses
|
1,023
|
|
|
(882
|
)
|
|
141
|
|
|||
|
$
|
51,317
|
|
|
$
|
(16,605
|
)
|
|
$
|
34,712
|
|
|
|
|
|
|
|
|
As of January 31, 2019
|
||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
|
|
||||||||||
Capitalized internal-use software costs
|
$
|
19,838
|
|
|
$
|
(9,969
|
)
|
|
$
|
9,869
|
|
Purchased developed technology
|
4,600
|
|
|
(833
|
)
|
|
3,767
|
|
|||
Software licenses
|
1,023
|
|
|
(763
|
)
|
|
260
|
|
|||
|
$
|
25,461
|
|
|
$
|
(11,565
|
)
|
|
$
|
13,896
|
|
•
|
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 day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the 2023 Notes on each applicable trading day;
|
•
|
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 July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(unaudited)
|
||||||||||||||
Contractual interest expense
|
$
|
215
|
|
|
$
|
216
|
|
|
$
|
431
|
|
|
$
|
362
|
|
Amortization of debt issuance costs
|
329
|
|
|
288
|
|
|
648
|
|
|
478
|
|
||||
Amortization of debt discount
|
3,759
|
|
|
3,554
|
|
|
7,465
|
|
|
5,935
|
|
||||
Total
|
$
|
4,303
|
|
|
$
|
4,058
|
|
|
$
|
8,544
|
|
|
$
|
6,775
|
|
|
As of July 31, 2019
|
||
|
(unaudited)
|
||
Liability component:
|
|
||
Principal
|
$
|
345,000
|
|
Less: unamortized debt issuance costs and debt discount
|
(65,259
|
)
|
|
Net carrying amount
|
$
|
279,741
|
|
|
|
||
|
At Issuance
|
||
Equity component:
|
|
||
2023 Notes
|
$
|
79,962
|
|
Less: issuance costs
|
(2,320
|
)
|
|
Carrying amount of the equity component(1)
|
$
|
77,642
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(unaudited)
|
||||||||||||||
Operating lease cost(1)
|
|
$
|
5,620
|
|
|
$
|
5,807
|
|
|
$
|
11,083
|
|
|
$
|
9,241
|
|
|
|
Operating Leases
|
||
|
|
(unaudited)
|
||
2020
|
|
$
|
12,157
|
|
2021
|
|
24,504
|
|
|
2022
|
|
24,189
|
|
|
2023
|
|
23,765
|
|
|
2024
|
|
24,252
|
|
|
Thereafter
|
|
95,733
|
|
|
Total lease payments
|
|
204,600
|
|
|
Less imputed interest
|
|
(45,310
|
)
|
|
Total operating lease liabilities
|
|
$
|
159,290
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
Cost of revenue
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
3,111
|
|
|
$
|
1,901
|
|
|
$
|
5,533
|
|
|
$
|
3,430
|
|
Professional services and other
|
1,873
|
|
|
1,083
|
|
|
3,392
|
|
|
1,972
|
|
||||
Research and development
|
9,082
|
|
|
5,272
|
|
|
15,428
|
|
|
9,485
|
|
||||
Sales and marketing
|
9,236
|
|
|
5,471
|
|
|
16,022
|
|
|
9,624
|
|
||||
General and administrative
|
7,972
|
|
|
4,495
|
|
|
13,584
|
|
|
7,846
|
|
||||
Total
|
$
|
31,274
|
|
|
$
|
18,222
|
|
|
$
|
53,959
|
|
|
$
|
32,357
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
July 31, 2019
|
|
|
(unaudited)
|
|
Stock options and unvested RSUs outstanding
|
19,988,414
|
|
Available for future stock option and RSU grants
|
16,501,443
|
|
Available for ESPP
|
3,778,949
|
|
|
40,268,806
|
|
|
|
|
Number of
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding as of January 31, 2019
|
17,803,794
|
|
|
$
|
9.16
|
|
|
7.1
|
|
$
|
1,304,446
|
|
Granted
|
412,360
|
|
|
82.16
|
|
|
|
|
|
|||
Exercised
|
(3,376,704
|
)
|
|
8.13
|
|
|
|
|
|
|||
Canceled
|
(252,126
|
)
|
|
11.67
|
|
|
|
|
|
|||
Outstanding as of July 31, 2019 (unaudited)
|
14,587,324
|
|
|
$
|
11.42
|
|
|
6.6
|
|
$
|
1,741,854
|
|
As of July 31, 2019
|
|
|
|
|
|
|
|
|||||
Vested and exercisable (unaudited)
|
9,195,820
|
|
|
$
|
7.87
|
|
|
6.1
|
|
$
|
1,130,712
|
|
|
Number of
RSUs |
|
Weighted-
Average Grant Date Fair Value Per Share |
|||
|
|
|
|
|||
Outstanding as of January 31, 2019
|
4,835,536
|
|
|
$
|
44.49
|
|
Granted
|
1,895,182
|
|
|
115.86
|
|
|
Vested
|
(1,016,224
|
)
|
|
43.60
|
|
|
Forfeited
|
(313,404
|
)
|
|
45.44
|
|
|
Outstanding as of July 31, 2019 (unaudited)
|
5,401,090
|
|
|
$
|
69.65
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|||||||
Expected volatility
|
43% - 59%
|
|
39% - 40%
|
|
43% - 59%
|
|
39% - 40%
|
|
Expected term (in years)
|
0.5 - 1.0
|
|
0.5 - 1.0
|
|
0.5 - 1.0
|
|
0.5 - 1.0
|
|
Risk-free interest rate
|
2.05% - 1.95%
|
|
2.12% - 2.34%
|
|
2.05% - 1.95%
|
|
2.12% - 2.34%
|
|
Expected dividend yield
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss
|
$
|
(39,250
|
)
|
|
$
|
(3,730
|
)
|
|
$
|
(33,862
|
)
|
|
$
|
(5,345
|
)
|
|
$
|
(86,516
|
)
|
|
$
|
(8,430
|
)
|
|
$
|
(53,242
|
)
|
|
$
|
(11,927
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average shares outstanding - basic and diluted
|
105,049
|
|
|
9,984
|
|
|
92,156
|
|
|
14,546
|
|
|
103,917
|
|
|
10,125
|
|
|
86,172
|
|
|
19,303
|
|
||||||||
Net loss per share, basic and diluted
|
$
|
(0.37
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.62
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31,
|
||||
|
2019
|
|
2018
|
||
|
|
|
|
||
|
(unaudited)
|
||||
Unvested restricted common stock issued and outstanding
|
—
|
|
|
400
|
|
Stock options issued and outstanding
|
14,587
|
|
|
20,898
|
|
Unvested RSUs issued and outstanding
|
5,401
|
|
|
4,891
|
|
Unvested restricted stock awards issued and outstanding
|
177
|
|
|
388
|
|
Shares related to convertible senior notes
|
7,134
|
|
|
7,134
|
|
Shares subject to warrants related to the issuance of convertible senior notes
|
7,134
|
|
|
—
|
|
Shares committed under the ESPP
|
215
|
|
|
360
|
|
Unvested shares subject to repurchase
|
14
|
|
|
96
|
|
|
34,662
|
|
|
34,167
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
132,494
|
|
|
$
|
87,854
|
|
|
$
|
249,657
|
|
|
$
|
164,695
|
|
Professional services and other
|
7,986
|
|
|
6,732
|
|
|
16,046
|
|
|
13,512
|
|
||||
Total revenue
|
140,480
|
|
|
94,586
|
|
|
265,703
|
|
|
178,207
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Subscription(1)
|
27,917
|
|
|
19,211
|
|
|
52,457
|
|
|
35,543
|
|
||||
Professional services and other(1)
|
10,863
|
|
|
9,017
|
|
|
21,418
|
|
|
16,792
|
|
||||
Total cost of revenue
|
38,780
|
|
|
28,228
|
|
|
73,875
|
|
|
52,335
|
|
||||
Gross profit
|
101,700
|
|
|
66,358
|
|
|
191,828
|
|
|
125,872
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development(1)
|
40,045
|
|
|
24,829
|
|
|
74,077
|
|
|
44,758
|
|
||||
Sales and marketing(1)
|
78,385
|
|
|
59,004
|
|
|
160,497
|
|
|
108,497
|
|
||||
General and administrative(1)
|
26,887
|
|
|
20,955
|
|
|
52,653
|
|
|
36,025
|
|
||||
Total operating expenses
|
145,317
|
|
|
104,788
|
|
|
287,227
|
|
|
189,280
|
|
||||
Operating loss
|
(43,617
|
)
|
|
(38,430
|
)
|
|
(95,399
|
)
|
|
(63,408
|
)
|
||||
Interest expense
|
(4,304
|
)
|
|
(4,058
|
)
|
|
(8,545
|
)
|
|
(6,775
|
)
|
||||
Other income, net
|
3,464
|
|
|
2,296
|
|
|
6,364
|
|
|
3,798
|
|
||||
Loss before benefit from income taxes
|
(44,457
|
)
|
|
(40,192
|
)
|
|
(97,580
|
)
|
|
(66,385
|
)
|
||||
Benefit from income taxes
|
(1,477
|
)
|
|
(985
|
)
|
|
(2,634
|
)
|
|
(1,216
|
)
|
||||
Net loss
|
$
|
(42,980
|
)
|
|
$
|
(39,207
|
)
|
|
$
|
(94,946
|
)
|
|
$
|
(65,169
|
)
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of subscription revenue
|
$
|
3,111
|
|
|
$
|
1,901
|
|
|
$
|
5,533
|
|
|
$
|
3,430
|
|
Cost of professional services and other revenue
|
1,873
|
|
|
1,083
|
|
|
3,392
|
|
|
1,972
|
|
||||
Research and development
|
9,082
|
|
|
5,272
|
|
|
15,428
|
|
|
9,485
|
|
||||
Sales and marketing
|
9,236
|
|
|
5,471
|
|
|
16,022
|
|
|
9,624
|
|
||||
General and administrative
|
7,972
|
|
|
4,495
|
|
|
13,584
|
|
|
7,846
|
|
||||
Total stock-based compensation expense
|
$
|
31,274
|
|
|
$
|
18,222
|
|
|
$
|
53,959
|
|
|
$
|
32,357
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Revenue
|
|
|
|
|
|
||||||
Subscription
|
94
|
%
|
|
93
|
%
|
|
94
|
%
|
|
92
|
%
|
Professional services and other
|
6
|
|
|
7
|
|
|
6
|
|
|
8
|
|
Total revenue
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue
|
|
|
|
|
|
|
|
||||
Subscription
|
20
|
|
|
20
|
|
|
20
|
|
|
20
|
|
Professional services and other
|
8
|
|
|
10
|
|
|
8
|
|
|
9
|
|
Total cost of revenue
|
28
|
|
|
30
|
|
|
28
|
|
|
29
|
|
Gross profit
|
72
|
|
|
70
|
|
|
72
|
|
|
71
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||
Research and development
|
28
|
|
|
26
|
|
|
28
|
|
|
25
|
|
Sales and marketing
|
56
|
|
|
62
|
|
|
60
|
|
|
62
|
|
General and administrative
|
19
|
|
|
23
|
|
|
20
|
|
|
20
|
|
Total operating expenses
|
103
|
|
|
111
|
|
|
108
|
|
|
107
|
|
Operating loss
|
(31
|
)
|
|
(41
|
)
|
|
(36
|
)
|
|
(36
|
)
|
Interest expense
|
(3
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(4
|
)
|
Other income, net
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Loss before benefit from income taxes
|
(32
|
)
|
|
(43
|
)
|
|
(37
|
)
|
|
(38
|
)
|
Benefit from income taxes
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Net loss
|
(31
|
)%
|
|
(41
|
)%
|
|
(36
|
)%
|
|
(37
|
)%
|
|
Three Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
132,494
|
|
|
$
|
87,854
|
|
|
$
|
44,640
|
|
|
51
|
%
|
Professional services and other
|
7,986
|
|
|
6,732
|
|
|
1,254
|
|
|
19
|
|
|||
Total revenue
|
$
|
140,480
|
|
|
$
|
94,586
|
|
|
$
|
45,894
|
|
|
49
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
94
|
%
|
|
93
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
6
|
|
|
7
|
|
|
|
|
|
|
|
|||
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
27,917
|
|
|
$
|
19,211
|
|
|
$
|
8,706
|
|
|
45
|
%
|
Professional services and other
|
10,863
|
|
|
9,017
|
|
|
1,846
|
|
|
20
|
|
|||
Total cost of revenue
|
$
|
38,780
|
|
|
$
|
28,228
|
|
|
$
|
10,552
|
|
|
37
|
|
Gross profit
|
$
|
101,700
|
|
|
$
|
66,358
|
|
|
$
|
35,342
|
|
|
53
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
79
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
(36
|
)
|
|
(34
|
)
|
|
|
|
|
|
|
|||
Total gross margin
|
72
|
|
|
70
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
40,045
|
|
|
$
|
24,829
|
|
|
$
|
15,216
|
|
|
61
|
%
|
Percentage of revenue
|
28
|
%
|
|
26
|
%
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
78,385
|
|
|
$
|
59,004
|
|
|
$
|
19,381
|
|
|
33
|
%
|
Percentage of revenue
|
56
|
%
|
|
62
|
%
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
General and administrative
|
$
|
26,887
|
|
|
$
|
20,955
|
|
|
$
|
5,932
|
|
|
28
|
%
|
Percentage of revenue
|
19
|
%
|
|
23
|
%
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
|
||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||||
Interest expense
|
$
|
(4,304
|
)
|
|
$
|
(4,058
|
)
|
|
(246
|
)
|
|
6
|
%
|
Other income, net
|
3,464
|
|
|
2,296
|
|
|
1,168
|
|
|
51
|
%
|
|
Six Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
249,657
|
|
|
$
|
164,695
|
|
|
$
|
84,962
|
|
|
52
|
%
|
Professional services and other
|
16,046
|
|
|
13,512
|
|
|
2,534
|
|
|
19
|
|
|||
Total revenue
|
$
|
265,703
|
|
|
$
|
178,207
|
|
|
$
|
87,496
|
|
|
49
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
94
|
%
|
|
92
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
6
|
|
|
8
|
|
|
|
|
|
|
|
|||
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription
|
$
|
52,457
|
|
|
$
|
35,543
|
|
|
$
|
16,914
|
|
|
48
|
%
|
Professional services and other
|
21,418
|
|
|
16,792
|
|
|
4,626
|
|
|
28
|
|
|||
Total cost of revenue
|
$
|
73,875
|
|
|
$
|
52,335
|
|
|
$
|
21,540
|
|
|
41
|
|
Gross profit
|
$
|
191,828
|
|
|
$
|
125,872
|
|
|
$
|
65,956
|
|
|
52
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription
|
79
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|||
Professional services and other
|
(33
|
)
|
|
(24
|
)
|
|
|
|
|
|
|
|||
Total gross margin
|
72
|
|
|
71
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
74,077
|
|
|
$
|
44,758
|
|
|
$
|
29,319
|
|
|
66
|
%
|
Percentage of revenue
|
28
|
%
|
|
25
|
%
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
160,497
|
|
|
$
|
108,497
|
|
|
$
|
52,000
|
|
|
48
|
%
|
Percentage of revenue
|
60
|
%
|
|
62
|
%
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
General and administrative
|
$
|
52,653
|
|
|
$
|
36,025
|
|
|
$
|
16,628
|
|
|
46
|
%
|
Percentage of revenue
|
20
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
As of July 31,
|
||||
|
2019
|
|
2018
|
||
|
|
|
|
||
Customers with Annual Contract Value (ACV) above $100,000
|
1,222
|
|
|
837
|
|
Dollar-Based Retention Rate for the trailing 12 months ended
|
118
|
%
|
|
121
|
%
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Calculated Billings
|
$
|
155,764
|
|
|
$
|
109,391
|
|
|
$
|
302,959
|
|
|
$
|
205,317
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Gross profit
|
$
|
101,700
|
|
|
$
|
66,358
|
|
|
$
|
191,828
|
|
|
$
|
125,872
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense included in cost of revenue
|
4,984
|
|
|
2,984
|
|
|
8,925
|
|
|
5,402
|
|
||||
Amortization of acquired intangibles
|
1,785
|
|
|
—
|
|
|
2,548
|
|
|
—
|
|
||||
Non-GAAP gross profit
|
$
|
108,469
|
|
|
$
|
69,342
|
|
|
$
|
203,301
|
|
|
$
|
131,274
|
|
Gross margin
|
72
|
%
|
|
70
|
%
|
|
72
|
%
|
|
71
|
%
|
||||
Non-GAAP gross margin
|
77
|
%
|
|
73
|
%
|
|
77
|
%
|
|
74
|
%
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Operating loss
|
$
|
(43,617
|
)
|
|
$
|
(38,430
|
)
|
|
$
|
(95,399
|
)
|
|
$
|
(63,408
|
)
|
Add:
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
31,274
|
|
|
18,222
|
|
|
53,959
|
|
|
32,357
|
|
||||
Charitable contributions
|
652
|
|
|
1,008
|
|
|
652
|
|
|
1,008
|
|
||||
Amortization of acquired intangibles
|
1,785
|
|
|
—
|
|
|
2,548
|
|
|
—
|
|
||||
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
3,449
|
|
|
—
|
|
||||
Non-GAAP operating loss
|
$
|
(9,906
|
)
|
|
$
|
(19,200
|
)
|
|
$
|
(34,791
|
)
|
|
$
|
(30,043
|
)
|
Operating margin
|
(31
|
)%
|
|
(41
|
)%
|
|
(36
|
)%
|
|
(36
|
)%
|
||||
Non-GAAP operating margin
|
(7
|
)%
|
|
(20
|
)%
|
|
(13
|
)%
|
|
(17
|
)%
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(1,134
|
)
|
|
$
|
(5,343
|
)
|
|
$
|
20,128
|
|
|
$
|
(1,371
|
)
|
Less:
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment
|
(2,207
|
)
|
|
(5,313
|
)
|
|
(9,917
|
)
|
|
(9,790
|
)
|
||||
Capitalization of internal-use software costs
|
(961
|
)
|
|
(674
|
)
|
|
(1,330
|
)
|
|
(1,725
|
)
|
||||
Free Cash Flow
|
$
|
(4,302
|
)
|
|
$
|
(11,330
|
)
|
|
$
|
8,881
|
|
|
$
|
(12,886
|
)
|
Net cash used in investing activities
|
$
|
(22,383
|
)
|
|
$
|
(28,729
|
)
|
|
$
|
(147,990
|
)
|
|
$
|
(267,671
|
)
|
Net cash provided by financing activities
|
$
|
23,070
|
|
|
$
|
15,438
|
|
|
$
|
36,332
|
|
|
$
|
334,883
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Total revenue
|
$
|
140,480
|
|
|
$
|
94,586
|
|
|
$
|
265,703
|
|
|
$
|
178,207
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Deferred revenue (end of period)
|
291,193
|
|
|
191,898
|
|
|
291,193
|
|
|
191,898
|
|
||||
Unbilled receivables (beginning of period)
|
799
|
|
|
1,619
|
|
|
1,457
|
|
|
809
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Unbilled receivables (end of period)
|
(1,004
|
)
|
|
(818
|
)
|
|
(1,004
|
)
|
|
(818
|
)
|
||||
Deferred revenue (beginning of period)
|
(275,704
|
)
|
|
(177,894
|
)
|
|
(254,390
|
)
|
|
(164,779
|
)
|
||||
Calculated billings
|
$
|
155,764
|
|
|
$
|
109,391
|
|
|
$
|
302,959
|
|
|
$
|
205,317
|
|
|
Six Months Ended July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
20,128
|
|
|
$
|
(1,371
|
)
|
Net cash used in investing activities
|
(147,990
|
)
|
|
(267,671
|
)
|
||
Net cash provided by financing activities
|
36,332
|
|
|
334,883
|
|
||
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
(1,187
|
)
|
|
(632
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(92,717
|
)
|
|
$
|
65,209
|
|
•
|
price our platform effectively so that we are able to attract and retain customers without compromising our profitability;
|
•
|
attract new customers, successfully deploy and implement our platform, upsell or otherwise increase our existing customers’ use of our platform, obtain customer renewals and provide our customers with excellent customer support;
|
•
|
increase our network of channel partners, which include resellers, ISVs, system integrators and other distribution partners;
|
•
|
adequately expand our sales force, and maintain or increase our sales force’s productivity;
|
•
|
successfully identify and enter into agreements with suitable acquisition targets, integrate any acquisitions and integrate acquired technologies into our existing products or use them to develop new products;
|
•
|
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, obtain renewals from existing customers and upsell or otherwise 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;
|
•
|
significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform and products;
|
•
|
our ability to comply with privacy laws and requirements, including the General Data Protection Regulation and California Consumer Privacy Act;
|
•
|
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs;
|
•
|
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;
|
•
|
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; 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 our customer identity products;
|
•
|
the need to allay privacy, regulatory 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, ongoing royalty payments or other amounts to settle such disputes;
|
•
|
require significant management time and attention;
|
•
|
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, remove or reduce features or functionality of our products or comply with other unfavorable terms;
|
•
|
require us to indemnify our customers or third-party service providers; and/or
|
•
|
require us to expend additional development resources to redesign our products.
|
•
|
delays or reductions in customer purchases for both us and the acquired business;
|
•
|
disruption of partner and customer relationships;
|
•
|
potential loss of key employees of the acquired company;
|
•
|
claims by and disputes with the acquired company’s employees, customers, stockholders or third parties;
|
•
|
unknown liabilities or risks associated with the acquired business, product or technology, such as contractual obligations, potential security vulnerabilities of the acquired company and its products and services, potential intellectual property infringement, costs arising from the acquired company’s failure to comply with legal or regulatory requirements and litigation matters;
|
•
|
they could be viewed unfavorably by our partners, our customers, our stockholders or securities analysts;
|
•
|
unforeseen integration or other expenses; and
|
•
|
future impairment of goodwill or other acquired intangible assets.
|
•
|
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;
|
•
|
greater risk that our foreign employees or partners will fail to comply with U.S. and foreign laws;
|
•
|
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;
|
•
|
restrictive governmental actions focusing on cross-border trade, including taxes, trade laws, tariffs, import and export restrictions or quotas, barriers, sanctions, custom duties or other trade restrictions;
|
•
|
unexpected changes in legal and regulatory requirements;
|
•
|
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;
|
•
|
political, economic and social instability, war, armed conflict or terrorist activities;
|
•
|
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.
|
•
|
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 financial or 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;
|
•
|
our failure to meet the estimates or the expectations of securities analysts or investors;
|
•
|
recruitment or departure of key personnel;
|
•
|
significant security breaches, technical difficulties or interruptions of our service;
|
•
|
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
|
•
|
establish 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 - the instance document does not appear in the Interactive Data File because its IBRL tags are embedded within the Inline XBRL document.
|
|
Filed herewith
|
||||
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
||||
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
||||
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
||||
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
||||
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
||||
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)
|
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Filed herewith
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Okta, Inc.
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August 28, 2019
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/s/
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William E. Losch
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William E. Losch
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Chief Financial Officer
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(Principal Accounting and Financial Officer)
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1 Year Okta Chart |
1 Month Okta Chart |
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