|
x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-2530195
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3300 Olcott Street
Santa Clara, California 95054
(Address of principal executive office, including zip code)
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|
|
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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New York Stock Exchange LLC
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I
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Item 1.
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||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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||
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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•
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our ability to maintain an adequate rate of revenue growth;
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•
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our business plan and our ability to effectively manage our growth;
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•
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trends in revenue, costs of revenue, and gross margin;
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•
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trends in our operating expenses, including personnel costs, research and development expense, sales and marketing expense, and general and administrative expense;
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•
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our ability to extend our leadership position in next-generation network security;
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•
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our ability to timely and effectively scale and adapt our existing technology;
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•
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our ability to expand internationally;
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•
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the effects of increased competition in our market and our ability to offer differentiated products and compete effectively;
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•
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our ability to introduce new subscriptions, renew existing contracts, and increase sales to our existing customer base;
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•
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costs associated with defending intellectual property infringement and other claims, such as those claims discussed in “Legal Proceedings” included in Part I, Item 3 of this Annual Report on Form 10-K;
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•
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the effects of seasonal trends and macroeconomic conditions on our results of operations;
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•
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the adequacy of our current facilities;
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•
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the sufficiency of our cash flow from operations with existing cash and cash equivalents to meet our cash needs for at least the next 12 months; and
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•
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future acquisitions of, or investments in, complementary companies, products, services, or technologies.
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•
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Threat Prevention Subscription
. This service provides the intrusion detection and prevention capabilities of our platform. Our threat prevention engine blocks vulnerability exploits, viruses, spyware, buffer overflows, denial-of-service attacks, and port scans from compromising and damaging enterprise information resources. It includes mechanisms such as protocol decoder-based analysis, protocol anomaly-based protection, stateful pattern matching, statistical anomaly detection, heuristic-based analysis, custom vulnerability, and spyware phone home signatures.
|
•
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URL Filtering Subscription
. This service provides the URL filtering capabilities of our platform. The URL filtering database consists of millions of URLs across many categories and is designed to monitor and control employee web surfing activities. The on-appliance URL database can be augmented to suit the traffic patterns of the local user community with a custom URL database. URLs that are not categorized by the local URL database can be pulled into a separate, cache-based URL database from a very extensive, cloud-based URL database.
|
•
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GlobalProtect Subscription
. This service provides protection for mobile users of both traditional laptop devices and mobile devices. It expands the boundaries of the physical network, effectively establishing a logical perimeter that encompasses remote laptop and mobile device users irrespective of their location. When a remote user logs into the device, GlobalProtect automatically determines the closest gateway available to the roaming device and establishes a secure connection. Windows and Apple laptops as well as such mobile devices as Apple iPhones and iPads, will stay connected to the corporate network whenever they are on a network of any kind. As a result they are protected as if they never left the corporate campus. GlobalProtect ensures that the same secure application enablement policies that protect users at the corporate site are enforced for all users, independent of their location.
|
•
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WildFire Subscription
. This service provides protection against targeted modern malware and advanced persistent threats. Its cloud-based analysis service provides a near real-time analysis engine for detecting previously unseen modern malware. The core component of this service is a sandbox environment that can operate on an end-customers' private cloud or our public cloud where files can be run and monitored for more than 100 behavioral characteristics that identify the file as malware. Once identified, signatures are automatically generated and delivered to all devices that subscribe to the service. By providing this as a cloud-based service, all of our end-customers benefit from malware found on any network.
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•
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large networking vendors such as Cisco Systems, Inc. and Juniper Networks, Inc. that incorporate network security features in their products;
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•
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large companies such as Intel Corporation, International Business Machines (IBM), and Hewlett-Packard Company (HP) that have acquired large network security specialist vendors in recent years and have the technical and financial resources to bring competitive solutions to the market;
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•
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independent network security vendors such as Check Point Software Technologies Ltd. and Fortinet, Inc. that offer network security products; and
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•
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small and large companies that offer point solutions that compete with some of the features present in our platform.
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•
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product features, reliability, performance, and effectiveness;
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•
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product line breadth, diversity, and applicability;
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•
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product extensibility and ability to integrate with other technology infrastructures;
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•
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price and total cost of ownership;
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•
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adherence to industry standards and certifications;
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•
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strength of sales and marketing efforts; and
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•
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brand awareness and reputation.
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•
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our ability to attract and retain new end-customers;
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•
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the budgeting cycles and purchasing practices of end-customers;
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•
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changes in end-customer, distributor or reseller requirements, or market needs;
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•
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changes in the growth rate of the enterprise network security market;
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•
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the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our industry, including consolidation among our competitors or end-customers;
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•
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changes in mix of our products and services including increases in multi-year subscriptions and support and maintenance;
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•
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price competition;
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•
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deferral of orders from end-customers in anticipation of new products or product enhancements announced by us or our competitors;
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•
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our ability to successfully expand our business domestically and internationally;
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•
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our ability to increase the size of our distribution channel;
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•
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decisions by potential end-customers to purchase enterprise network security solutions from larger, more established security vendors or from their primary network equipment vendors;
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•
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changes in end-customer attach rates and renewal rates for our services;
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•
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timing of revenue recognition and revenue deferrals;
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•
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our ability to manage production and manufacturing related costs, global customer service organization costs, inventory excess and obsolescence costs, and warranty costs;
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•
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insolvency or credit difficulties confronting our customers, which could adversely affect their ability to purchase or pay for our products and services, or confronting our key suppliers, including our sole source suppliers, which could disrupt our supply chain;
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•
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any disruption in our channel or termination of our relationship with important channel partners, including as a result of consolidation among distributors and resellers of network security solutions;
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•
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our inability to fulfill our end-customers’ orders due to supply chain delays or events that impact our manufacturers or their suppliers;
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•
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the cost and potential outcomes of existing and future litigation, which could have a material adverse effect on our business;
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•
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seasonality or cyclical fluctuations in our markets;
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•
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future accounting pronouncements or changes in our accounting policies;
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•
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the impact on our overall effective tax rate caused by any reorganization in our corporate structure or any changes in our valuation allowance for domestic deferred assets;
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•
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increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates, as an increasing portion of our expenses are incurred and paid in currencies other than the U.S. dollar; and
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•
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general macroeconomic conditions, both domestically and in our foreign markets.
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•
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greater name recognition and longer operating histories;
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•
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larger sales and marketing budgets and resources;
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•
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broader distribution and established relationships with distribution partners and end-customers;
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•
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greater customer support resources;
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•
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greater resources to make acquisitions;
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•
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lower labor and development costs;
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•
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larger and more mature intellectual property portfolios; and
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•
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substantially greater financial, technical, and other resources.
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•
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competition from larger competitors, such as Cisco, Check Point, and Juniper, that traditionally target larger enterprises, service providers, and government entities and that may have pre-existing relationships or purchase commitments from those end-customers;
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•
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increased purchasing power and leverage held by large end-customers in negotiating contractual arrangements with us;
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•
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more stringent requirements in our worldwide support service contracts, including stricter support response times and penalties for any failure to meet support requirements; and
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•
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longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our products and services.
|
•
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expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors or defects or to address and eliminate vulnerabilities;
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•
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loss of existing or potential end-customers or channel partners;
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•
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delayed or lost revenue;
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•
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delay or failure to attain market acceptance;
|
•
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an increase in warranty claims compared with our historical experience, or an increased cost of servicing warranty claims, either of which would adversely affect our gross margins; and
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•
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litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
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•
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economic uncertainty around the world, in particular, macroeconomic challenges in Europe;
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•
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greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
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•
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the uncertainty of protection for intellectual property rights in some countries;
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•
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greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
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•
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risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
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•
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greater risk of a failure of foreign employees, partners, distributors, and resellers to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices;
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•
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heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
•
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increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
|
•
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greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;
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•
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management communication and integration problems resulting from cultural and geographic dispersion;
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•
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fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business; and
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•
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general economic and political conditions in these foreign markets.
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•
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announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
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•
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price and volume fluctuations in the overall stock market from time to time;
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•
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significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;
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•
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fluctuations in the trading volume of our shares or the size of our public float;
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•
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actual or anticipated changes in our operating results or fluctuations in our operating results;
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•
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whether our operating results meet the expectations of securities analysts or investors;
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•
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actual or anticipated changes in the expectations of securities analysts or investors;
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•
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litigation involving us, our industry, or both, including any developments with respect to our pending litigation, described under the "Litigation" subheading in Note 6. Commitments and Contingencies of Notes to Consolidated Financial Statements in Part II, Item 8 of this Quarterly Report on Form 10-Q;
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•
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regulatory developments in the United States, foreign countries or both;
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•
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major catastrophic events;
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•
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sales of large blocks of our stock;
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•
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departures of key personnel; or
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•
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economic uncertainty around the world, in particular, macroeconomic challenges in Europe;
|
•
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a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
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the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
|
•
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the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
|
the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our president, our secretary, or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
|
•
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the requirement for the affirmative vote of holders of at least 66
2
/
3
% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt;
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•
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the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to amend the bylaws to facilitate an unsolicited takeover attempt; and
|
•
|
advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
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ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES
|
Year Ended July 31, 2012
|
High
|
|
Low
|
||||
Fourth Quarter (from July 20, 2012)
|
$
|
62.07
|
|
|
$
|
51.10
|
|
Year Ended July 31, 2013
|
|
|
|
||||
First Quarter
|
$
|
72.61
|
|
|
$
|
53.27
|
|
Second Quarter
|
$
|
57.65
|
|
|
$
|
47.00
|
|
Third Quarter
|
$
|
62.19
|
|
|
$
|
50.29
|
|
Fourth Quarter
|
$
|
56.60
|
|
|
$
|
39.08
|
|
Company/Index
|
7/20/2012
|
|
7/31/2012
|
|
10/31/2012
|
|
1/31/2013
|
|
4/30/2013
|
|
7/31/2013
|
||||||||||||
Palo Alto Networks, Inc.
|
$
|
100.00
|
|
|
$
|
107.55
|
|
|
$
|
103.48
|
|
|
$
|
104.20
|
|
|
$
|
101.83
|
|
|
$
|
92.11
|
|
NYSE Comp
|
$
|
100.00
|
|
|
$
|
101.34
|
|
|
$
|
105.95
|
|
|
$
|
114.63
|
|
|
$
|
119.55
|
|
|
$
|
123.19
|
|
NYSE Arca Tech 100
|
$
|
100.00
|
|
|
$
|
101.35
|
|
|
$
|
101.94
|
|
|
$
|
113.77
|
|
|
$
|
118.29
|
|
|
$
|
127.39
|
|
ITEM 6.
|
SELECTED CONSOLIDATED FINANCIAL DATA
|
|
Year Ended July 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Selected Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
243,707
|
|
|
$
|
174,462
|
|
|
$
|
84,800
|
|
|
$
|
36,789
|
|
|
$
|
10,110
|
|
Services
|
152,400
|
|
|
80,676
|
|
|
33,797
|
|
|
11,993
|
|
|
3,242
|
|
|||||
Total revenue
|
396,107
|
|
|
255,138
|
|
|
118,597
|
|
|
48,782
|
|
|
13,352
|
|
|||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
(1)
|
63,412
|
|
|
44,615
|
|
|
21,766
|
|
|
10,822
|
|
|
3,952
|
|
|||||
Services
(1)
|
46,344
|
|
|
25,938
|
|
|
10,507
|
|
|
4,812
|
|
|
2,324
|
|
|||||
Total cost of revenue
|
109,756
|
|
|
70,553
|
|
|
32,273
|
|
|
15,634
|
|
|
6,276
|
|
|||||
Total gross profit
|
286,351
|
|
|
184,585
|
|
|
86,324
|
|
|
33,148
|
|
|
7,076
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
(1)
|
62,482
|
|
|
38,570
|
|
|
21,366
|
|
|
12,788
|
|
|
8,208
|
|
|||||
Sales and marketing
(1)
|
199,771
|
|
|
115,917
|
|
|
62,254
|
|
|
29,726
|
|
|
15,372
|
|
|||||
General and administrative
(1)
|
42,719
|
|
|
26,207
|
|
|
13,108
|
|
|
11,291
|
|
|
2,536
|
|
|||||
Total operating expenses
|
304,972
|
|
|
180,694
|
|
|
96,728
|
|
|
53,805
|
|
|
26,116
|
|
|||||
Operating income (loss)
|
(18,621
|
)
|
|
3,891
|
|
|
(10,404
|
)
|
|
(20,657
|
)
|
|
(19,040
|
)
|
|||||
Interest income
|
484
|
|
|
18
|
|
|
3
|
|
|
4
|
|
|
52
|
|
|||||
Other expense, net
|
(519
|
)
|
|
(1,110
|
)
|
|
(1,651
|
)
|
|
(424
|
)
|
|
(5
|
)
|
|||||
Income (loss) before income taxes
|
(18,656
|
)
|
|
2,799
|
|
|
(12,052
|
)
|
|
(21,077
|
)
|
|
(18,993
|
)
|
|||||
Provision for income taxes
|
10,590
|
|
|
2,062
|
|
|
476
|
|
|
56
|
|
|
12
|
|
|||||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
|
$
|
(21,133
|
)
|
|
$
|
(19,005
|
)
|
Net income (loss) attributable to common stockholders, basic and diluted
|
$
|
(29,246
|
)
|
|
$
|
—
|
|
|
$
|
(12,528
|
)
|
|
$
|
(21,133
|
)
|
|
$
|
(19,005
|
)
|
Net income (loss) per share attributable to common stockholders, basic and diluted
|
$
|
(0.43
|
)
|
|
$
|
—
|
|
|
$
|
(0.88
|
)
|
|
$
|
(1.78
|
)
|
|
$
|
(2.01
|
)
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic and diluted
|
68,682
|
|
|
19,569
|
|
|
14,201
|
|
|
11,901
|
|
|
9,435
|
|
(1)
|
Includes share-based compensation expense as follows:
|
|
Year Ended July 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of product revenue
|
$
|
765
|
|
|
$
|
121
|
|
|
$
|
27
|
|
|
$
|
9
|
|
|
$
|
6
|
|
Cost of services revenue
|
3,586
|
|
|
653
|
|
|
179
|
|
|
46
|
|
|
9
|
|
|||||
Research and development
|
9,931
|
|
|
3,733
|
|
|
1,020
|
|
|
318
|
|
|
126
|
|
|||||
Sales and marketing
|
20,493
|
|
|
4,267
|
|
|
1,133
|
|
|
364
|
|
|
186
|
|
|||||
General and administrative
|
9,101
|
|
|
5,151
|
|
|
2,374
|
|
|
132
|
|
|
47
|
|
|||||
Total share-based compensation
|
$
|
43,876
|
|
|
$
|
13,925
|
|
|
$
|
4,733
|
|
|
$
|
869
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
July 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Selected Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
310,614
|
|
|
$
|
322,642
|
|
|
$
|
40,517
|
|
|
$
|
18,835
|
|
|
$
|
21,366
|
|
Investments
|
126,321
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Working capital
|
323,597
|
|
|
259,651
|
|
|
9,739
|
|
|
7,000
|
|
|
18,246
|
|
|||||
Total assets
|
585,606
|
|
|
407,804
|
|
|
91,172
|
|
|
38,119
|
|
|
28,213
|
|
|||||
Preferred stock warrant liability
|
—
|
|
|
—
|
|
|
2,068
|
|
|
491
|
|
|
68
|
|
|||||
Redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
64,491
|
|
|
64,491
|
|
|
64,491
|
|
|||||
Common stock including additional paid-in capital
|
381,710
|
|
|
309,099
|
|
|
9,311
|
|
|
2,589
|
|
|
1,200
|
|
|||||
Total stockholders’ equity (deficit)
|
272,420
|
|
|
229,071
|
|
|
(71,454
|
)
|
|
(65,648
|
)
|
|
(45,904
|
)
|
•
|
We added over
4,800
new end-customers during fiscal
2013
and we had more than
13,500
end customers in over
120
countries as of
July 31, 2013
.
|
•
|
Total revenue increased
55%
to
$396.1 million
during fiscal
2013
from
$255.1 million
during fiscal
2012
.
|
•
|
Revenue increased
53%
in Americas,
48%
in EMEA and
82%
in APAC during fiscal
2013
compared to fiscal
2012
.
|
•
|
Service revenue increased
89%
to
$152.4 million
during fiscal
2013
from
$80.7 million
during fiscal
2012
.
|
•
|
Service revenue as a percentage of total revenue increased to
38%
during fiscal
2013
from
32%
during fiscal
2012
, which reflected the increasing recurring revenue in the business model and the rapid adoption of higher margin subscriptions services in our customer base.
|
•
|
As of
July 31, 2013
, we had
$436.9 million
in cash, cash equivalents, and investments.
|
•
|
Cash flow provided by operating activities increased
48%
to
$114.5 million
during fiscal
2013
from
$77.4 million
during fiscal
2012
.
|
•
|
Deferred revenue increased
84%
to
$249.2 million
as of
July 31, 2013
from
$135.8 million
as
July 31, 2012
reflected the increased adoption of our support and maintenance and all our subscriptions services.
|
•
|
We completed the reorganization of our corporate structure and intercompany relationships to more closely align with the international nature of our business activities. Through changes in international procurement and sales operations, our corporate structure may cause short-term volatility but is expected to reduce our overall effective tax rate over the long term.
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Total deferred revenue
|
$
|
249,230
|
|
|
$
|
135,808
|
|
Cash, cash equivalents, and investments
|
$
|
436,935
|
|
|
$
|
322,642
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(dollars in thousands)
|
||||||||||
Total revenue
|
$
|
396,107
|
|
|
$
|
255,138
|
|
|
$
|
118,597
|
|
Year over year percentage increase
|
55.3
|
%
|
|
115.1
|
%
|
|
143.1
|
%
|
|||
Gross margin percentage
|
72.3
|
%
|
|
72.3
|
%
|
|
72.8
|
%
|
|||
Operating income (loss)
|
$
|
(18,621
|
)
|
|
$
|
3,891
|
|
|
$
|
(10,404
|
)
|
Operating margin percentage
|
(4.7
|
)%
|
|
1.5
|
%
|
|
(8.8
|
)%
|
|||
Cash flow provided by operating activities
|
$
|
114,519
|
|
|
$
|
77,368
|
|
|
$
|
32,102
|
|
Free cash flow (non-GAAP)
|
$
|
92,077
|
|
|
$
|
62,803
|
|
|
$
|
19,102
|
|
•
|
Deferred Revenue
.
Our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue as of the period end. The majority of our deferred revenue balance consists of subscription and support and maintenance revenue that is recognized ratably over the contractual service period. We monitor our deferred revenue balance because it represents a significant portion of revenue to be recognized in future periods.
|
•
|
Cash Flow Provided by Operating Activities
.
We monitor cash flow provided by operating activities as a measure of our overall business performance. Our cash flow provided by operating activities is driven in large part by sales of our products and from up-front payments for both subscriptions and support and maintenance. Monitoring cash flow provided by operating activities enables us to analyze our financial performance without the non-cash effects of certain items such as depreciation, amortization, and share-based compensation costs, thereby allowing us to better understand and manage the cash needs of our business.
|
•
|
Free Cash Flow (non-GAAP)
.
We define free cash flow, a non-GAAP financial measure, as cash provided by operating activities less purchases of property, equipment, and other assets. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchases of property, equipment, and other assets, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet.
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Cash Flow:
|
|
|
|
|
|
||||||
Cash flow provided by operating activities
|
$
|
114,519
|
|
|
$
|
77,368
|
|
|
$
|
32,102
|
|
Less: purchase of property, equipment, and other assets
|
22,442
|
|
|
14,565
|
|
|
13,000
|
|
|||
Free cash flow (non-GAAP)
|
$
|
92,077
|
|
|
$
|
62,803
|
|
|
$
|
19,102
|
|
Net cash used in investing activities
|
$
|
(151,565
|
)
|
|
$
|
(14,565
|
)
|
|
$
|
(13,000
|
)
|
Net cash provided by financing activities
|
$
|
25,018
|
|
|
$
|
219,322
|
|
|
$
|
2,580
|
|
•
|
Product Revenue
. The substantial majority of our product revenue is derived from sales of our appliances. Product revenue also includes revenue derived from software licenses of Panorama, Virtual Systems Upgrades, and the VM-Series. We recognize product revenue at the time of shipment, provided that all other revenue recognition criteria have been met. As a percentage of total revenue, we expect our product revenue to vary from quarter to quarter based on seasonal and cyclical factors.
|
•
|
Services Revenue
. Services revenue is derived primarily from Threat Prevention, URL Filtering, GlobalProtect, and WildFire subscriptions and support and maintenance. Our subscriptions are priced as a percentage of the appliance’s list price. Our contractual subscription and support and maintenance terms are typically one to five years. We recognize revenue from subscriptions and support and maintenance over the contractual service period. As a percentage of total revenue, we expect our services revenue to remain at consistent levels or increase over the long term as we introduce new subscriptions, renew existing services contracts, and expand our end-customer base.
|
•
|
Cost of Product Revenue
.
Cost of product revenue primarily includes costs paid to our third-party contract manufacturer. Our cost of product revenue also includes product testing costs, allocated costs, warranty costs, shipping costs, and personnel costs associated with logistics and quality control. We expect our cost of product revenue to increase as our product revenue increases.
|
•
|
Cost of Services Revenue
.
Cost of services revenue includes personnel costs for our global customer support organization, allocated costs, and URL filtering database service fees. We expect our cost of services revenue to increase as our end-customer base grows.
|
•
|
Research and Development
.
Research and development expense consists primarily of personnel costs. Research and development expense also includes prototype related expenses and allocated costs. We expect research and development expense to increase in absolute dollars as we continue to invest in our future products and services, although our research and development expense may fluctuate as a percentage of total revenue.
|
•
|
Sales and Marketing
. Sales and marketing expense consists primarily of personnel costs including commission costs. We expense commission costs as incurred. Sales and marketing expense also includes costs for market development programs, promotional and other marketing costs, travel costs, office equipment and software, depreciation of capital equipment, professional services, and allocated costs. In the last 12 months, we have significantly increased the size of our sales force and have also substantially grown our sales presence internationally. We expect sales and marketing expense to continue to increase in absolute dollars as we increase the size of our sales and marketing organizations to increase touch points with end-customers and to expand our international presence, although our sales and marketing expense may fluctuate as a percentage of total revenue.
|
•
|
General and Administrative
. General and administrative expense consists of personnel costs as well as professional services. General and administrative personnel include our executive, finance, human resources, and legal organizations. Professional services consist primarily of legal, auditing, accounting, and other consulting costs. We
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
243,707
|
|
|
$
|
174,462
|
|
|
$
|
84,800
|
|
Services
|
152,400
|
|
|
80,676
|
|
|
33,797
|
|
|||
Total revenue
|
396,107
|
|
|
255,138
|
|
|
118,597
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product
|
63,412
|
|
|
44,615
|
|
|
21,766
|
|
|||
Services
|
46,344
|
|
|
25,938
|
|
|
10,507
|
|
|||
Total cost of revenue
|
109,756
|
|
|
70,553
|
|
|
32,273
|
|
|||
Total gross profit
|
286,351
|
|
|
184,585
|
|
|
86,324
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
62,482
|
|
|
38,570
|
|
|
21,366
|
|
|||
Sales and marketing
|
199,771
|
|
|
115,917
|
|
|
62,254
|
|
|||
General and administrative
|
42,719
|
|
|
26,207
|
|
|
13,108
|
|
|||
Total operating expenses
|
304,972
|
|
|
180,694
|
|
|
96,728
|
|
|||
Operating income (loss)
|
(18,621
|
)
|
|
3,891
|
|
|
(10,404
|
)
|
|||
Interest income
|
484
|
|
|
18
|
|
|
3
|
|
|||
Other expense, net
|
(519
|
)
|
|
(1,110
|
)
|
|
(1,651
|
)
|
|||
Income (loss) before income taxes
|
(18,656
|
)
|
|
2,799
|
|
|
(12,052
|
)
|
|||
Provision for income taxes
|
10,590
|
|
|
2,062
|
|
|
476
|
|
|||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
|
Year Ended July 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
|
(as a percentage of revenue)
|
|||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|||
Revenue:
|
|
|
|
|
|
|||
Product
|
61.5
|
%
|
|
68.4
|
%
|
|
71.5
|
%
|
Services
|
38.5
|
%
|
|
31.6
|
%
|
|
28.5
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenue:
|
|
|
|
|
|
|||
Product
|
16.0
|
%
|
|
17.5
|
%
|
|
18.4
|
%
|
Services
|
11.7
|
%
|
|
10.2
|
%
|
|
8.8
|
%
|
Total cost of revenue
|
27.7
|
%
|
|
27.7
|
%
|
|
27.2
|
%
|
Total gross profit
|
72.3
|
%
|
|
72.3
|
%
|
|
72.8
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
15.8
|
%
|
|
15.1
|
%
|
|
18.0
|
%
|
Sales and marketing
|
50.4
|
%
|
|
45.4
|
%
|
|
52.5
|
%
|
General and administrative
|
10.8
|
%
|
|
10.3
|
%
|
|
11.1
|
%
|
Total operating expenses
|
77.0
|
%
|
|
70.8
|
%
|
|
81.6
|
%
|
Operating income (loss)
|
(4.7
|
)%
|
|
1.5
|
%
|
|
(8.8
|
)%
|
Interest income
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
Other expense, net
|
(0.1
|
)%
|
|
(0.4
|
)%
|
|
(1.4
|
)%
|
Income (loss) before income taxes
|
(4.7
|
)%
|
|
1.1
|
%
|
|
(10.2
|
)%
|
Provision for income taxes
|
2.7
|
%
|
|
0.8
|
%
|
|
0.4
|
%
|
Net income (loss)
|
(7.4
|
)%
|
|
0.3
|
%
|
|
(10.6
|
)%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
243,707
|
|
|
61.5
|
%
|
|
$
|
174,462
|
|
|
68.4
|
%
|
|
$
|
69,245
|
|
|
39.7
|
%
|
Services
|
152,400
|
|
|
38.5
|
%
|
|
80,676
|
|
|
31.6
|
%
|
|
71,724
|
|
|
88.9
|
%
|
|||
Total revenue
|
$
|
396,107
|
|
|
100.0
|
%
|
|
$
|
255,138
|
|
|
100.0
|
%
|
|
$
|
140,969
|
|
|
55.3
|
%
|
Revenue by geographic theater:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas
|
$
|
247,616
|
|
|
62.5
|
%
|
|
$
|
161,873
|
|
|
63.4
|
%
|
|
$
|
85,743
|
|
|
53.0
|
%
|
EMEA
|
91,496
|
|
|
23.1
|
%
|
|
61,994
|
|
|
24.3
|
%
|
|
29,502
|
|
|
47.6
|
%
|
|||
APAC
|
56,995
|
|
|
14.4
|
%
|
|
31,271
|
|
|
12.3
|
%
|
|
25,724
|
|
|
82.3
|
%
|
|||
Total revenue
|
$
|
396,107
|
|
|
100.0
|
%
|
|
$
|
255,138
|
|
|
100.0
|
%
|
|
$
|
140,969
|
|
|
55.3
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
63,412
|
|
|
|
|
$
|
44,615
|
|
|
|
|
$
|
18,797
|
|
|
|
|||
Services
|
46,344
|
|
|
|
|
25,938
|
|
|
|
|
20,406
|
|
|
|
||||||
Total cost of revenue
|
$
|
109,756
|
|
|
|
|
$
|
70,553
|
|
|
|
|
$
|
39,203
|
|
|
|
|||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
180,295
|
|
|
74.0
|
%
|
|
$
|
129,847
|
|
|
74.4
|
%
|
|
$
|
50,448
|
|
|
(0.4
|
)%
|
Services
|
106,056
|
|
|
69.6
|
%
|
|
54,738
|
|
|
67.8
|
%
|
|
51,318
|
|
|
1.8
|
%
|
|||
Total gross profit
|
$
|
286,351
|
|
|
72.3
|
%
|
|
$
|
184,585
|
|
|
72.3
|
%
|
|
$
|
101,766
|
|
|
—
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
62,482
|
|
|
15.8
|
%
|
|
$
|
38,570
|
|
|
15.1
|
%
|
|
$
|
23,912
|
|
|
62.0
|
%
|
Sales and marketing
|
199,771
|
|
|
50.4
|
%
|
|
115,917
|
|
|
45.4
|
%
|
|
83,854
|
|
|
72.3
|
%
|
|||
General and administrative
|
42,719
|
|
|
10.8
|
%
|
|
26,207
|
|
|
10.3
|
%
|
|
16,512
|
|
|
63.0
|
%
|
|||
Total operating expenses
|
$
|
304,972
|
|
|
77.0
|
%
|
|
$
|
180,694
|
|
|
70.8
|
%
|
|
$
|
124,278
|
|
|
68.8
|
%
|
Includes share-based compensation of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
9,931
|
|
|
|
|
$
|
3,733
|
|
|
|
|
$
|
6,198
|
|
|
166.0
|
%
|
||
Sales and marketing
|
20,493
|
|
|
|
|
4,267
|
|
|
|
|
16,226
|
|
|
380.3
|
%
|
|||||
General and administrative
|
9,101
|
|
|
|
|
5,151
|
|
|
|
|
3,950
|
|
|
76.7
|
%
|
|||||
Total
|
$
|
39,525
|
|
|
|
|
$
|
13,151
|
|
|
|
|
$
|
26,374
|
|
|
200.5
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Other expense, net
|
$
|
519
|
|
|
$
|
1,110
|
|
|
$
|
(591
|
)
|
|
(53.2
|
)%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Provision for income taxes
|
$
|
10,590
|
|
|
$
|
2,062
|
|
|
$
|
8,528
|
|
|
413.6
|
%
|
Effective tax rate
|
(56.8
|
)%
|
|
73.7
|
%
|
|
|
|
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue |
|
Amount
|
|
% of
Revenue |
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
174,462
|
|
|
68.4
|
%
|
|
$
|
84,800
|
|
|
71.5
|
%
|
|
$
|
89,662
|
|
|
105.7
|
%
|
Services
|
80,676
|
|
|
31.6
|
%
|
|
33,797
|
|
|
28.5
|
%
|
|
46,879
|
|
|
138.7
|
%
|
|||
Total revenue
|
$
|
255,138
|
|
|
100.0
|
%
|
|
$
|
118,597
|
|
|
100.0
|
%
|
|
$
|
136,541
|
|
|
115.1
|
%
|
Revenue by geographic theater:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas
|
$
|
161,873
|
|
|
63.4
|
%
|
|
$
|
73,145
|
|
|
61.7
|
%
|
|
$
|
88,728
|
|
|
121.3
|
%
|
EMEA
|
61,994
|
|
|
24.3
|
%
|
|
32,504
|
|
|
27.4
|
%
|
|
29,490
|
|
|
90.7
|
%
|
|||
APAC
|
31,271
|
|
|
12.3
|
%
|
|
12,948
|
|
|
10.9
|
%
|
|
18,323
|
|
|
141.5
|
%
|
|||
Total revenue
|
$
|
255,138
|
|
|
100.0
|
%
|
|
$
|
118,597
|
|
|
100.0
|
%
|
|
$
|
136,541
|
|
|
115.1
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Gross
Margin |
|
Amount
|
|
Gross
Margin |
|
Amount
|
|
Gross
Margin |
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
44,615
|
|
|
|
|
$
|
21,766
|
|
|
|
|
$
|
22,849
|
|
|
|
|||
Services
|
25,938
|
|
|
|
|
10,507
|
|
|
|
|
15,431
|
|
|
|
||||||
Total cost of revenue
|
$
|
70,553
|
|
|
|
|
$
|
32,273
|
|
|
|
|
$
|
38,280
|
|
|
|
|||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
129,847
|
|
|
74.4
|
%
|
|
$
|
63,034
|
|
|
74.3
|
%
|
|
$
|
66,813
|
|
|
0.1
|
%
|
Services
|
54,738
|
|
|
67.8
|
%
|
|
23,290
|
|
|
68.9
|
%
|
|
31,448
|
|
|
(1.1
|
)%
|
|||
Total gross profit
|
$
|
184,585
|
|
|
72.3
|
%
|
|
$
|
86,324
|
|
|
72.8
|
%
|
|
$
|
98,261
|
|
|
(0.5
|
)%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
38,570
|
|
|
15.1
|
%
|
|
$
|
21,366
|
|
|
18.0
|
%
|
|
$
|
17,204
|
|
|
80.5
|
%
|
Sales and marketing
|
115,917
|
|
|
45.4
|
%
|
|
62,254
|
|
|
52.5
|
%
|
|
53,663
|
|
|
86.2
|
%
|
|||
General and administrative
|
26,207
|
|
|
10.3
|
%
|
|
13,108
|
|
|
11.1
|
%
|
|
13,099
|
|
|
99.9
|
%
|
|||
Total operating expenses
|
$
|
180,694
|
|
|
70.8
|
%
|
|
$
|
96,728
|
|
|
81.6
|
%
|
|
$
|
83,966
|
|
|
86.8
|
%
|
Includes share-based compensation of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
3,733
|
|
|
|
|
$
|
1,020
|
|
|
|
|
$
|
2,713
|
|
|
266.0
|
%
|
||
Sales and marketing
|
4,267
|
|
|
|
|
1,133
|
|
|
|
|
3,134
|
|
|
276.6
|
%
|
|||||
General and administrative
|
5,151
|
|
|
|
|
2,374
|
|
|
|
|
2,777
|
|
|
117.0
|
%
|
|||||
Total
|
$
|
13,151
|
|
|
|
|
$
|
4,527
|
|
|
|
|
$
|
8,624
|
|
|
190.5
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Other expense, net
|
$
|
1,110
|
|
|
$
|
1,651
|
|
|
$
|
(541
|
)
|
|
(32.8
|
)%
|
|
Year Ended July 31,
|
|
|
|
|
|||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Provision for income taxes
|
$
|
2,062
|
|
|
$
|
476
|
|
|
$
|
1,586
|
|
|
333.2
|
%
|
Effective tax rate
|
73.7
|
%
|
|
(3.9
|
)%
|
|
|
|
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Working capital
|
$
|
323,597
|
|
|
$
|
259,651
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
310,614
|
|
|
$
|
322,642
|
|
Investments
|
126,321
|
|
|
—
|
|
||
Total cash, cash equivalents, and investments
|
$
|
436,935
|
|
|
$
|
322,642
|
|
|
Year Ended July 31,
|
||||||||||
2013
|
|
2012
|
|
2011
|
|||||||
|
(in thousands)
|
||||||||||
Cash provided by operating activities
|
$
|
114,519
|
|
|
$
|
77,368
|
|
|
$
|
32,102
|
|
Cash used in investing activities
|
(151,565
|
)
|
|
(14,565
|
)
|
|
(13,000
|
)
|
|||
Cash provided by financing activities
|
25,018
|
|
|
219,322
|
|
|
2,580
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(12,028
|
)
|
|
$
|
282,125
|
|
|
$
|
21,682
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than 1
Year |
|
1 - 3 Years
|
|
3- 5 Years
|
|
More Than 5
Years |
||||||||||
|
|
|
(in thousands)
|
|
|
||||||||||||||
Operating lease obligations
(1) (2)
|
$
|
108,313
|
|
|
$
|
7,728
|
|
|
$
|
24,634
|
|
|
$
|
23,651
|
|
|
$
|
52,300
|
|
Purchase obligations
(3)
|
19,130
|
|
|
19,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
(4)
|
$
|
127,443
|
|
|
$
|
26,858
|
|
|
$
|
24,634
|
|
|
$
|
23,651
|
|
|
$
|
52,300
|
|
(1)
|
Consists of contractual obligations from non-cancelable office space under operating leases.
|
(2)
|
Excludes proceeds from contractual sublease of
$10.7 million
, which consists of
$0.1 million
to be received in less than one year,
$5.5 million
to be received in one to three years,
$5.1 million
to be received in three to five years and
nil
to be received in more than five years.
|
(3)
|
Consists of minimum purchase commitments of products and components with our independent contract manufacturer and original design manufacturers. Obligations under contracts that we can cancel without a significant penalty are not included in the table above.
|
(4)
|
No amounts related to Financial Accounting Standards Board Accounting Standard Codification Topic 740-10, Income Taxes, are included. As of
July 31, 2013
, we had approximately
$2.4 million
of tax liabilities recorded related to uncertainty in income tax positions.
|
•
|
Persuasive Evidence of an Arrangement Exists.
We rely upon non-cancelable sales agreements and purchase orders to determine the existence of an arrangement.
|
•
|
Delivery has Occurred.
We use shipping documents or transmissions of product or service contract registration codes to determine delivery.
|
•
|
The Fee is Fixed or Determinable.
We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction.
|
•
|
Collectability is Reasonably Assured.
We assess collectability based on credit analysis and payment history.
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
310,614
|
|
|
$
|
322,642
|
|
Short-term investments
|
109,007
|
|
|
—
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $51 and $164 at July 31, 2013 and July 31, 2012, respectively
|
87,461
|
|
|
45,642
|
|
||
Prepaid expenses and other current assets
|
22,617
|
|
|
13,373
|
|
||
Total current assets
|
529,699
|
|
|
381,657
|
|
||
Property and equipment, net
|
32,086
|
|
|
20,979
|
|
||
Long-term investments
|
17,314
|
|
|
—
|
|
||
Other assets
|
6,507
|
|
|
5,168
|
|
||
Total assets
|
$
|
585,606
|
|
|
$
|
407,804
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
15,544
|
|
|
$
|
9,214
|
|
Accrued and other liabilities
|
14,609
|
|
|
15,189
|
|
||
Accrued compensation
|
22,004
|
|
|
11,307
|
|
||
Deferred revenue
|
153,945
|
|
|
86,296
|
|
||
Total current liabilities
|
206,102
|
|
|
122,006
|
|
||
Deferred revenue—non-current
|
95,285
|
|
|
49,512
|
|
||
Other long-term liabilities
|
11,799
|
|
|
7,215
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock; $0.0001 par value; 100,000 shares authorized; none issued and outstanding at July 31, 2013 and July 31, 2012
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value; 1,000,000 shares authorized; 71,612 and 67,852 shares issued and outstanding at July 31, 2013 and July 31, 2012, respectively
|
7
|
|
|
7
|
|
||
Additional paid-in capital
|
381,703
|
|
|
309,092
|
|
||
Accumulated other comprehensive loss
|
(16
|
)
|
|
—
|
|
||
Accumulated deficit
|
(109,274
|
)
|
|
(80,028
|
)
|
||
Total stockholders’ equity
|
272,420
|
|
|
229,071
|
|
||
Total liabilities and stockholders’ equity
|
$
|
585,606
|
|
|
$
|
407,804
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
243,707
|
|
|
$
|
174,462
|
|
|
$
|
84,800
|
|
Services
|
152,400
|
|
|
80,676
|
|
|
33,797
|
|
|||
Total revenue
|
396,107
|
|
|
255,138
|
|
|
118,597
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product
|
63,412
|
|
|
44,615
|
|
|
21,766
|
|
|||
Services
|
46,344
|
|
|
25,938
|
|
|
10,507
|
|
|||
Total cost of revenue
|
109,756
|
|
|
70,553
|
|
|
32,273
|
|
|||
Total gross profit
|
286,351
|
|
|
184,585
|
|
|
86,324
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
62,482
|
|
|
38,570
|
|
|
21,366
|
|
|||
Sales and marketing
|
199,771
|
|
|
115,917
|
|
|
62,254
|
|
|||
General and administrative
|
42,719
|
|
|
26,207
|
|
|
13,108
|
|
|||
Total operating expenses
|
304,972
|
|
|
180,694
|
|
|
96,728
|
|
|||
Operating income (loss)
|
(18,621
|
)
|
|
3,891
|
|
|
(10,404
|
)
|
|||
Interest income
|
484
|
|
|
18
|
|
|
3
|
|
|||
Other expense, net
|
(519
|
)
|
|
(1,110
|
)
|
|
(1,651
|
)
|
|||
Income (loss) before income taxes
|
(18,656
|
)
|
|
2,799
|
|
|
(12,052
|
)
|
|||
Provision for income taxes
|
10,590
|
|
|
2,062
|
|
|
476
|
|
|||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
Net income (loss) attributable to common stockholders, basic and diluted
|
$
|
(29,246
|
)
|
|
$
|
—
|
|
|
$
|
(12,528
|
)
|
Net income (loss) per share attributable to common stockholders, basic and diluted
|
$
|
(0.43
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.88
|
)
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic and diluted
|
68,682
|
|
|
19,569
|
|
|
14,201
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized losses on investments
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss)
|
$
|
(29,262
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
|
|
Redeemable Convertible
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive Loss
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity (Deficit)
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance as of July 31, 2010
|
|
41,084
|
|
|
$
|
64,491
|
|
|
19,790
|
|
|
$
|
2
|
|
|
$
|
2,587
|
|
|
$
|
—
|
|
|
$
|
(68,237
|
)
|
|
$
|
(65,648
|
)
|
Net loss and comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,528
|
)
|
|
(12,528
|
)
|
||||||
Stock option exercises, net of unvested portion
|
|
—
|
|
|
—
|
|
|
951
|
|
|
—
|
|
|
1,094
|
|
|
—
|
|
|
—
|
|
|
1,094
|
|
||||||
Share-based compensation for equity based awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,733
|
|
|
—
|
|
|
—
|
|
|
4,733
|
|
||||||
Repurchase of unvested restricted common stock from terminated employees
|
|
—
|
|
|
—
|
|
|
(990
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from settlement of note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
895
|
|
|
—
|
|
|
—
|
|
|
895
|
|
||||||
Balance as of July 31, 2011
|
|
41,084
|
|
|
64,491
|
|
|
19,751
|
|
|
2
|
|
|
9,309
|
|
|
—
|
|
|
(80,765
|
)
|
|
(71,454
|
)
|
||||||
Net income and comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
737
|
|
|
737
|
|
||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering
|
|
(41,305
|
)
|
|
(67,517
|
)
|
|
41,305
|
|
|
4
|
|
|
67,513
|
|
|
—
|
|
|
—
|
|
|
67,517
|
|
||||||
Issuance of common stock from initial public offering, net of offering costs
|
|
—
|
|
|
—
|
|
|
5,617
|
|
|
1
|
|
|
215,374
|
|
|
—
|
|
|
—
|
|
|
215,375
|
|
||||||
Stock option exercises, net of unvested portion and excess tax benefit
|
|
—
|
|
|
—
|
|
|
1,044
|
|
|
—
|
|
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
||||||
Share-based compensation for equity based awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,837
|
|
|
—
|
|
|
—
|
|
|
13,837
|
|
||||||
Repurchase of unvested restricted common stock from terminated employees
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of restricted common stock to employees
|
|
—
|
|
|
—
|
|
|
192
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from settlement of note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
637
|
|
|
—
|
|
|
—
|
|
|
637
|
|
||||||
Exercise of preferred stock warrants
|
|
221
|
|
|
3,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of July 31, 2012
|
|
—
|
|
|
—
|
|
|
67,852
|
|
|
7
|
|
|
309,092
|
|
|
—
|
|
|
(80,028
|
)
|
|
229,071
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,246
|
)
|
|
(29,246
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
||||||
Stock option exercises, net of unvested portion and excess tax benefit
|
|
—
|
|
|
—
|
|
|
3,627
|
|
|
—
|
|
|
22,640
|
|
|
—
|
|
|
—
|
|
|
22,640
|
|
||||||
Issuance of common stock upon vesting of restricted stock units
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock in connection with employee stock purchase plan
|
|
—
|
|
|
—
|
|
|
170
|
|
|
—
|
|
|
6,267
|
|
|
—
|
|
|
—
|
|
|
6,267
|
|
||||||
Share-based compensation for equity based awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,704
|
|
|
—
|
|
|
—
|
|
|
43,704
|
|
||||||
Repurchase of unvested restricted common stock from terminated employees
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of July 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
71,612
|
|
|
$
|
7
|
|
|
$
|
381,703
|
|
|
$
|
(16
|
)
|
|
$
|
(109,274
|
)
|
|
$
|
272,420
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
9,892
|
|
|
6,134
|
|
|
2,189
|
|
|||
Amortization of investment premiums, net of accretion of purchase discounts
|
1,943
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation for equity based awards
|
43,704
|
|
|
13,837
|
|
|
4,733
|
|
|||
Loss on facility sublease
|
262
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from share-based compensation
|
(6,762
|
)
|
|
(215
|
)
|
|
—
|
|
|||
Change in fair value of preferred stock warrants
|
—
|
|
|
958
|
|
|
1,577
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(41,819
|
)
|
|
(15,965
|
)
|
|
(15,436
|
)
|
|||
Prepaid expenses and other assets
|
(8,865
|
)
|
|
(11,063
|
)
|
|
(5,114
|
)
|
|||
Accounts payable
|
5,830
|
|
|
3,779
|
|
|
2,734
|
|
|||
Accrued and other liabilities
|
26,158
|
|
|
9,912
|
|
|
6,340
|
|
|||
Deferred revenue
|
113,422
|
|
|
68,553
|
|
|
43,134
|
|
|||
Reimbursement of cost of leasehold improvements
|
—
|
|
|
701
|
|
|
4,473
|
|
|||
Net cash provided by operating activities
|
114,519
|
|
|
77,368
|
|
|
32,102
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchase of property, equipment, and other assets
|
(22,442
|
)
|
|
(14,565
|
)
|
|
(13,000
|
)
|
|||
Purchase of investments
|
(345,324
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of investments
|
13,491
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from maturities of investments
|
202,710
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(151,565
|
)
|
|
(14,565
|
)
|
|
(13,000
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from initial public offering, net of offering costs
|
—
|
|
|
215,375
|
|
|
—
|
|
|||
Excess tax benefit from share-based compensation
|
6,762
|
|
|
215
|
|
|
—
|
|
|||
Change in restricted cash
|
—
|
|
|
1,221
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
14,765
|
|
|
1,956
|
|
|
1,775
|
|
|||
Proceeds from employee stock purchase plan
|
6,267
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from settlement of note receivable
|
—
|
|
|
637
|
|
|
895
|
|
|||
Payments of initial public offering costs
|
(2,698
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of restricted common stock from terminated employees
|
(78
|
)
|
|
(82
|
)
|
|
(90
|
)
|
|||
Net cash provided by financing activities
|
25,018
|
|
|
219,322
|
|
|
2,580
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(12,028
|
)
|
|
282,125
|
|
|
21,682
|
|
|||
Cash and cash equivalents—beginning of period
|
322,642
|
|
|
40,517
|
|
|
18,835
|
|
|||
Cash and cash equivalents—end of period
|
$
|
310,614
|
|
|
$
|
322,642
|
|
|
$
|
40,517
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
304
|
|
|
$
|
1,355
|
|
|
$
|
32
|
|
Cash paid for interest
|
$
|
58
|
|
|
$
|
23
|
|
|
$
|
25
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Conversion of preferred stock into common stock
|
$
|
—
|
|
|
$
|
67,517
|
|
|
$
|
—
|
|
Issuance of preferred stock upon exercise of warrant
|
$
|
—
|
|
|
$
|
3,026
|
|
|
$
|
—
|
|
•
|
Persuasive Evidence of an Arrangement Exists.
We rely upon non-cancelable sales agreements and purchase orders to determine the existence of an arrangement.
|
•
|
Delivery has Occurred.
We use shipping documents or transmissions of product or service contract registration codes to determine delivery.
|
•
|
The Fee is Fixed or Determinable.
We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction.
|
•
|
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.
|
•
|
Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.
|
|
|
July 31, 2013
|
|
July 31, 2012
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Certificates of deposit
|
|
$
|
1,822
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,822
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. government and agency securities
|
|
—
|
|
|
46,700
|
|
|
—
|
|
|
46,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Money market funds
|
|
131,845
|
|
|
—
|
|
|
—
|
|
|
131,845
|
|
|
250,005
|
|
|
—
|
|
|
—
|
|
|
250,005
|
|
||||||||
Total cash equivalents
|
|
133,667
|
|
|
46,700
|
|
|
—
|
|
|
180,367
|
|
|
250,005
|
|
|
—
|
|
|
—
|
|
|
250,005
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt securities
|
|
—
|
|
|
32,834
|
|
|
—
|
|
|
32,834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. government and agency securities
|
|
—
|
|
|
76,173
|
|
|
—
|
|
|
76,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total short-term investments
|
|
—
|
|
|
109,007
|
|
|
—
|
|
|
109,007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt securities
|
|
—
|
|
|
12,317
|
|
|
—
|
|
|
12,317
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. government and agency securities
|
|
—
|
|
|
4,997
|
|
|
—
|
|
|
4,997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total long-term investments
|
|
—
|
|
|
17,314
|
|
|
—
|
|
|
17,314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restricted cash
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
||||||||
Total other assets
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
||||||||
Total assets measured at fair value
|
|
$
|
134,888
|
|
|
$
|
173,021
|
|
|
$
|
—
|
|
|
$
|
307,909
|
|
|
$
|
251,226
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
251,226
|
|
|
July 31, 2013
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Certificates of deposit
|
$
|
1,822
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,822
|
|
Corporate debt securities
|
45,173
|
|
|
12
|
|
|
(34
|
)
|
|
45,151
|
|
||||
U.S. government and agency securities
|
127,864
|
|
|
8
|
|
|
(2
|
)
|
|
127,870
|
|
||||
Money market funds
|
131,845
|
|
|
—
|
|
|
—
|
|
|
131,845
|
|
||||
Total
|
$
|
306,704
|
|
|
$
|
20
|
|
|
$
|
(36
|
)
|
|
$
|
306,688
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Corporate debt securities
|
$
|
31,429
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,429
|
|
|
$
|
(34
|
)
|
U.S. government and agency securities
|
15,926
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
15,926
|
|
|
(2
|
)
|
||||||
Total
|
$
|
47,355
|
|
|
$
|
(36
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47,355
|
|
|
$
|
(36
|
)
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due within one year
|
$
|
157,515
|
|
|
$
|
157,529
|
|
Due within one to two years
|
17,344
|
|
|
17,314
|
|
||
Instruments not due at a single maturity date
|
131,845
|
|
|
131,845
|
|
||
Total
|
$
|
306,704
|
|
|
$
|
306,688
|
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
Acquired intellectual property
|
$
|
1,546
|
|
|
$
|
546
|
|
Less: amortization
|
(188
|
)
|
|
(63
|
)
|
||
Total
|
$
|
1,358
|
|
|
$
|
483
|
|
|
Amount
|
||
Years ending July 31:
|
|
||
2014
|
$
|
227
|
|
2015
|
227
|
|
|
2016
|
227
|
|
|
2017
|
208
|
|
|
2018
|
110
|
|
|
2019 and thereafter
|
359
|
|
|
Total
|
$
|
1,358
|
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
Computers, equipment, and software
|
$
|
27,239
|
|
|
$
|
12,016
|
|
Demonstration units
|
11,401
|
|
|
8,440
|
|
||
Leasehold improvements
|
10,176
|
|
|
8,913
|
|
||
Furniture and fixtures
|
2,746
|
|
|
2,436
|
|
||
Total property and equipment
|
51,562
|
|
|
31,805
|
|
||
Less: accumulated depreciation and amortization
|
(19,476
|
)
|
|
(10,826
|
)
|
||
Total property and equipment, net
|
$
|
32,086
|
|
|
$
|
20,979
|
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
Accrued expenses payable
|
$
|
11,144
|
|
|
$
|
11,497
|
|
Accrued taxes
|
2,609
|
|
|
1,168
|
|
||
Other liabilities
|
856
|
|
|
2,524
|
|
||
Total accrued and other liabilities
|
$
|
14,609
|
|
|
$
|
15,189
|
|
|
Amount
|
||
Years ending July 31:
|
|
||
2014
|
$
|
7,728
|
|
2015
|
12,152
|
|
|
2016
|
12,482
|
|
|
2017
|
12,224
|
|
|
2018
|
11,427
|
|
|
2019 and thereafter
|
52,300
|
|
|
Committed gross lease payments
|
108,313
|
|
|
Less: proceeds from sublease rental
|
(10,700
|
)
|
|
Net operating lease obligation
|
$
|
97,613
|
|
|
Options Outstanding
|
|||||||||||
|
Number
of Shares |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
|||||
Balance—July 31, 2012
|
14,225
|
|
|
$
|
9.46
|
|
|
8.3
|
|
$
|
678,248
|
|
Options granted
|
90
|
|
|
55.36
|
|
|
|
|
|
|||
Options forfeited
|
(655
|
)
|
|
10.71
|
|
|
|
|
|
|||
Options exercised
|
(3,627
|
)
|
|
4.07
|
|
|
|
|
|
|||
Balance—July 31, 2013
|
10,033
|
|
|
11.74
|
|
|
7.8
|
|
$
|
373,228
|
|
|
Options vested and expected to vest—July 31, 2013
|
9,589
|
|
|
$
|
11.55
|
|
|
7.8
|
|
$
|
358,533
|
|
Options exercisable—July 31, 2013
|
5,125
|
|
|
$
|
8.06
|
|
|
7.4
|
|
$
|
209,510
|
|
|
RSUs Outstanding
|
|||||||||||
|
Number
of Shares |
|
Weighted-
Average Grant-Date Fair Value Per Share |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
|||||
Balance—July 31, 2012
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
RSUs granted
|
2,358
|
|
|
54.51
|
|
|
|
|
|
|||
RSUs vested
|
(5
|
)
|
|
49.25
|
|
|
|
|
|
|||
RSUs forfeited
|
(112
|
)
|
|
57.89
|
|
|
|
|
|
|||
Balance—July 31, 2013
|
2,241
|
|
|
$
|
54.36
|
|
|
1.5
|
|
$
|
109,675
|
|
RSUs vested and expected to vest—July 31, 2013
|
2,011
|
|
|
$
|
54.44
|
|
|
1.5
|
|
$
|
98,418
|
|
|
Number of shares
|
|
Balance at beginning of fiscal year
|
10,571
|
|
Options granted
|
(90
|
)
|
RSUs granted
|
(2,358
|
)
|
Repurchased
|
42
|
|
Options forfeited
|
655
|
|
RSUs forfeited
|
112
|
|
Balance at end of fiscal year
|
8,932
|
|
|
Year Ended July 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Risk-free interest rate
|
1.0%
|
|
0.7% - 1.1%
|
|
0.8% - 1.8%
|
Expected term
|
6 years
|
|
4 – 6 years
|
|
4 years
|
Volatility
|
50%
|
|
49% – 51%
|
|
49%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Year Ended July 31,
|
||
|
2013
|
|
2012
|
Risk-free interest rate
|
0.1%
|
|
0.1%
|
Expected term
|
< 1 year
|
|
< 1 year
|
Volatility
|
42%
|
|
46%
|
Dividend yield
|
—%
|
|
—%
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cost of revenue
|
$
|
4,351
|
|
|
$
|
774
|
|
|
$
|
206
|
|
Research and development
|
9,931
|
|
|
3,733
|
|
|
1,020
|
|
|||
Sales and marketing
|
20,493
|
|
|
4,267
|
|
|
1,133
|
|
|||
General and administrative
|
9,101
|
|
|
5,151
|
|
|
2,374
|
|
|||
Total
|
$
|
43,876
|
|
|
$
|
13,925
|
|
|
$
|
4,733
|
|
|
Year Ended July 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Federal statutory rate
|
35.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Effect of:
|
|
|
|
|
|
|||
State taxes, net of federal tax benefit
|
1.0
|
|
|
9.7
|
|
|
4.6
|
|
Change in valuation allowance
|
(7.3
|
)
|
|
(85.4
|
)
|
|
(26.9
|
)
|
Foreign income at other than U.S. rates
|
(62.4
|
)
|
|
17.2
|
|
|
(1.8
|
)
|
Share-based compensation
|
(16.1
|
)
|
|
66.6
|
|
|
(6.9
|
)
|
Preferred stock warrant liability
|
—
|
|
|
12.3
|
|
|
(5.0
|
)
|
Meals and entertainment
|
(2.0
|
)
|
|
11.9
|
|
|
(1.5
|
)
|
Other, net
|
(5.0
|
)
|
|
7.4
|
|
|
(0.4
|
)
|
Total
|
(56.8
|
)%
|
|
73.7
|
%
|
|
(3.9
|
)%
|
|
July 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Accruals and reserves
|
$
|
23,461
|
|
|
$
|
12,065
|
|
Research and development and foreign tax credits
|
4,702
|
|
|
3,911
|
|
||
Net operating loss carryforwards
|
2,170
|
|
|
10,632
|
|
||
Share-based compensation
|
10,619
|
|
|
2,956
|
|
||
Gross deferred tax assets
|
40,952
|
|
|
29,564
|
|
||
Valuation allowance
|
(37,659
|
)
|
|
(29,555
|
)
|
||
Total deferred tax assets
|
3,293
|
|
|
9
|
|
||
Deferred tax liabilities
|
(2,937
|
)
|
|
—
|
|
||
Total
|
$
|
356
|
|
|
$
|
9
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Unrecognized tax benefits at the beginning of the period
|
$
|
2,630
|
|
|
$
|
1,972
|
|
|
$
|
1,061
|
|
Additions for tax positions taken in prior years
|
585
|
|
|
9
|
|
|
320
|
|
|||
Reductions for tax positions taken in prior years
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions related to the current year
|
3,349
|
|
|
649
|
|
|
591
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Lapse of statute of limitations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits at the end of the period
|
$
|
6,561
|
|
|
$
|
2,630
|
|
|
$
|
1,972
|
|
|
Year Ended July 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income (loss) used to compute net income (loss) per share:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(29,246
|
)
|
|
$
|
737
|
|
|
$
|
(12,528
|
)
|
Less: undistributed earnings allocated to participating securities
|
—
|
|
|
(737
|
)
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders, basic and diluted
|
$
|
(29,246
|
)
|
|
$
|
—
|
|
|
$
|
(12,528
|
)
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic and diluted
|
68,682
|
|
|
19,569
|
|
|
14,201
|
|
|||
Net income (loss) per share attributable to common stockholders, basic and diluted
|
$
|
(0.43
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.88
|
)
|
|
Year Ended July 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Options
|
10,033
|
|
|
4,116
|
|
|
8,195
|
|
RSUs
|
2,241
|
|
|
—
|
|
|
—
|
|
ESPP shares
|
114
|
|
|
—
|
|
|
—
|
|
Redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
41,084
|
|
Warrants to purchase redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
225
|
|
|
Three Months Ended
|
||||||||||||||
|
Oct. 31,
2012
|
|
Jan. 31,
2013
|
|
Apr. 30,
2013
|
|
Jul. 31,
2013
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
55,514
|
|
|
$
|
61,944
|
|
|
$
|
60,793
|
|
|
$
|
65,456
|
|
Services
|
30,420
|
|
|
34,555
|
|
|
40,496
|
|
|
46,929
|
|
||||
Total revenue
|
85,934
|
|
|
96,499
|
|
|
101,289
|
|
|
112,385
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
14,416
|
|
|
16,636
|
|
|
15,855
|
|
|
16,505
|
|
||||
Services
|
9,774
|
|
|
10,982
|
|
|
11,835
|
|
|
13,753
|
|
||||
Total cost of revenue
|
24,190
|
|
|
27,618
|
|
|
27,690
|
|
|
30,258
|
|
||||
Total gross profit
|
61,744
|
|
|
68,881
|
|
|
73,599
|
|
|
82,127
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
13,312
|
|
|
15,495
|
|
|
16,048
|
|
|
17,627
|
|
||||
Sales and marketing
|
42,607
|
|
|
45,796
|
|
|
51,733
|
|
|
59,635
|
|
||||
General and administrative
|
8,956
|
|
|
9,747
|
|
|
12,268
|
|
|
11,748
|
|
||||
Total operating expenses
|
64,875
|
|
|
71,038
|
|
|
80,049
|
|
|
89,010
|
|
||||
Operating loss
|
(3,131
|
)
|
|
(2,157
|
)
|
|
(6,450
|
)
|
|
(6,883
|
)
|
||||
Interest income
|
98
|
|
|
116
|
|
|
133
|
|
|
137
|
|
||||
Other expense, net
|
(170
|
)
|
|
(60
|
)
|
|
(157
|
)
|
|
(132
|
)
|
||||
Loss before income taxes
|
(3,203
|
)
|
|
(2,101
|
)
|
|
(6,474
|
)
|
|
(6,878
|
)
|
||||
Provision for income taxes
|
312
|
|
|
512
|
|
|
808
|
|
|
8,958
|
|
||||
Net loss
|
$
|
(3,515
|
)
|
|
$
|
(2,613
|
)
|
|
$
|
(7,282
|
)
|
|
$
|
(15,836
|
)
|
Net loss per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.22
|
)
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.22
|
)
|
|
Three Months Ended
|
||||||||||||||
|
Oct. 31,
2011
|
|
Jan. 31,
2012
|
|
Apr. 30,
2012
|
|
Jul. 31,
2012
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
42,861
|
|
|
$
|
38,638
|
|
|
$
|
43,524
|
|
|
$
|
49,439
|
|
Services
|
14,252
|
|
|
18,045
|
|
|
22,176
|
|
|
26,203
|
|
||||
Total revenue
|
57,113
|
|
|
56,683
|
|
|
65,700
|
|
|
75,642
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
10,310
|
|
|
10,248
|
|
|
11,524
|
|
|
12,533
|
|
||||
Services
|
4,530
|
|
|
5,265
|
|
|
7,109
|
|
|
9,034
|
|
||||
Total cost of revenue
|
14,840
|
|
|
15,513
|
|
|
18,633
|
|
|
21,567
|
|
||||
Total gross profit
|
42,273
|
|
|
41,170
|
|
|
47,067
|
|
|
54,075
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
7,848
|
|
|
8,514
|
|
|
10,462
|
|
|
11,746
|
|
||||
Sales and marketing
|
22,368
|
|
|
25,612
|
|
|
30,216
|
|
|
37,721
|
|
||||
General and administrative
|
5,157
|
|
|
5,768
|
|
|
6,430
|
|
|
8,852
|
|
||||
Total operating expenses
|
35,373
|
|
|
39,894
|
|
|
47,108
|
|
|
58,319
|
|
||||
Operating income (loss)
|
6,900
|
|
|
1,276
|
|
|
(41
|
)
|
|
(4,244
|
)
|
||||
Interest income
|
2
|
|
|
2
|
|
|
3
|
|
|
11
|
|
||||
Other expense, net
|
(464
|
)
|
|
(566
|
)
|
|
(3
|
)
|
|
(77
|
)
|
||||
Income (loss) before income taxes
|
6,438
|
|
|
712
|
|
|
(41
|
)
|
|
(4,310
|
)
|
||||
Provision (benefit) for income taxes
|
2,322
|
|
|
288
|
|
|
(837
|
)
|
|
289
|
|
||||
Net income (loss)
|
$
|
4,116
|
|
|
$
|
424
|
|
|
$
|
796
|
|
|
$
|
(4,599
|
)
|
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.18
|
)
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.18
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
1.
|
Consolidated Financial Statements:
|
2.
|
Financial Statement Schedules:
|
3.
|
Exhibits
|
By:
|
/s/ M
ARK
D. M
C
L
AUGHLIN
|
|
Mark D. McLaughlin
|
|
Chief Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ M
ARK
D. M
C
L
AUGHLIN
|
|
Chief Executive Officer, President and Director, (Principal Executive Officer)
|
|
September 24, 2013
|
Mark D. McLaughlin
|
|
|
||
|
|
|
|
|
/s/ S
TEFFAN
C. T
OMLINSON
|
|
Chief Financial Officer (Principal Accounting and Financial Officer)
|
|
September 24, 2013
|
Steffan C. Tomlinson
|
|
|
||
|
|
|
||
/s/ N
IR
Z
UK
|
|
Chief Technical Officer and Director
|
|
September 24, 2013
|
Nir Zuk
|
|
|
||
|
|
|
||
/s/ A
SHEEM
C
HANDNA
|
|
Director
|
|
September 24, 2013
|
Asheem Chandna
|
|
|
||
|
|
|
||
/s/ J
OHN
M. D
ONOVAN
|
|
Director
|
|
September 24, 2013
|
John M. Donovan
|
|
|
||
|
|
|
|
|
/s/ C
ARL
E
SCHENBACH
|
|
Director
|
|
September 24, 2013
|
Carl Eschenbach
|
|
|
||
|
|
|
|
|
/s/ J
AMES
J. G
OETZ
|
|
Director
|
|
September 24, 2013
|
James J. Goetz
|
|
|
||
|
|
|
||
/s/ C
HARLES
J. R
OBEL
|
|
Director
|
|
September 24, 2013
|
Charles J. Robel
|
|
|
||
|
|
|
||
/s/ D
ANIEL
J. W
ARMENHOVEN
|
|
Director
|
|
September 24, 2013
|
Daniel J. Warmenhoven
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
Incorporated by Reference
|
|
Filing Date
|
||
|
File No.
|
|
Exhibit
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of the Registrant.
|
|
10-K
|
|
001-35594
|
|
3.1
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of the Registrant.
|
|
10-K
|
|
001-35594
|
|
3.2
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.1*
|
|
Form of Indemnification Agreement between the Registrant and its directors and officers.
|
|
S-1/A
|
|
333-180620
|
|
10.1
|
|
July 9, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.2*
|
|
2005 Equity Incentive Plan and related form agreements under 2005 Equity Incentive Plan.
|
|
S-1/A
|
|
333-180620
|
|
10.2
|
|
July 9, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
2012 Equity Incentive Plan and related form agreements under 2012 Equity Incentive Plan.
|
|
S-1/A
|
|
333-180620
|
|
10.3
|
|
July 9, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.4*
|
|
2012 Employee Stock Purchase Plan and related form agreements under 2012 Employee Stock Purchase Plan.
|
|
S-8
|
|
333-182762
|
|
99.3
|
|
July 20, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
Employee Incentive Compensation Plan.
|
|
10-K
|
|
001-35594
|
|
10.16
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.6*
|
|
Offer Letter between the Registrant and Mark D. McLaughlin, dated July 21, 2011, as amended.
|
|
S-1
|
|
333-180620
|
|
10.6
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.7*
|
|
Offer Letter between the Registrant and Steffan C. Tomlinson, dated January 17, 2012.
|
|
S-1
|
|
333-180620
|
|
10.7
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.8*
|
|
Letter Agreement between the Registrant and Nir Zuk, dated December 19, 2011.
|
|
S-1
|
|
333-180620
|
|
10.8
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.9*
|
|
Letter Agreement between the Registrant and Rajiv Batra, dated December 19, 2011.
|
|
S-1
|
|
333-180620
|
|
10.9
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.10*
|
|
Letter Agreement between the Registrant and René Bonvanie, dated December 19, 2011.
|
|
S-1
|
|
333-180620
|
|
10.10
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.11*
|
|
Offer Letter between the Registrant and Charles J. Robel, dated June 9, 2011.
|
|
S-1
|
|
333-180620
|
|
10.12
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.12*
|
|
Offer Letter between the Registrant and Daniel J. Warmenhoven, dated February 14, 2012.
|
|
S-1
|
|
333-180620
|
|
10.13
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.13*
|
|
Offer Letter between the Registrant and Mark F. Anderson, dated May 23, 2012.
|
|
S-1/A
|
|
333-180620
|
|
10.16
|
|
July 9, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.14*
|
|
Offer Letter between the Registrant and John M. Donovan, dated September 14, 2012
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
September 20, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.15*
|
|
Offer Letter between the Registrant and Carl Eschenbach, dated May 9, 2013.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
May 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Lease between the Registrant and Santa Clara Office Partners LLC, dated October 20, 2010, as amended.
|
|
S-1
|
|
333-180620
|
|
10.14
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Amendment No. 2 to Lease between the Registrant and Santa Clara Office Partners LLC, dated July 2, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Lease between the Registrant and SI 34 LLC, dated September 17, 2012
|
|
10-K
|
|
001-35594
|
|
10.16
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
Lease between the Registrant and SI 34 LLC, dated September 17, 2012
|
|
10-K
|
|
001-35594
|
|
10.16
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.20**
|
|
Manufacturing Services Agreement between the Registrant and Flextronics Telecom Systems Ltd., dated September 20, 2010.
|
|
S-1
|
|
333-180620
|
|
10.15
|
|
April 6, 2012
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
Incorporated by Reference
|
|
Filing Date
|
||
|
File No.
|
|
Exhibit
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
10.21*
|
|
Amendment to Restricted Stock Agreement, dated as of March 8, 2013, by and between the Company and Nir Zuk.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
March 11, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.22*
|
|
Amendment to Restricted Stock Agreement, dated as of March 8, 2013, by and between the Company and Rajiv Batra.
|
|
8-K
|
|
001-35594
|
|
10.2
|
|
March 11, 2013
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
List of subsidiaries of the Registrant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.1
|
|
Power of Attorney (contained in the signature page to this Annual Report on Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1†
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2†
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS††
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH††
|
|
XBRL Taxonomy Schema Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL††
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF††
|
|
XBRL Taxonomy Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB††
|
|
XBRL Taxonomy Labels Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE††
|
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
*
|
Indicates a management contract or compensatory plan or arrangement.
|
(a)
|
the full execution and delivery of the Sublease by Tenant and Subtenant, and the delivery to Landlord of one fully-executed original thereof;
|
(b)
|
the execution and delivery of this Amendment by Landlord and Tenant; and
|
(c)
|
the satisfaction or written waiver by Landlord of the condition set forth in Section 7 below; and
|
(d)
|
the full execution and delivery of a Consent to Sublease in the precise form of
Exhibit B
attached to this Amendment (the “Consent to Sublease”).
|
Base Monthly Rent:
|
The term “Base Monthly Rent” shall mean the following:
|
OLCOTT FURNITURE INVENTORY
|
|
|
|
6/7/2013
|
|
|
|
ITEM
|
1st Flr. QTY.
|
2nd Flr. QTY.
|
TOTAL
|
|
|
|
|
Workstations
|
250
|
273
|
523
|
Office furniture
|
8
|
6
|
14
|
|
|
|
|
CHAIRS
|
|
|
|
Conference Rm. Chair
|
80
|
198
|
278
|
EBC Conference Rm. Chair
|
42
|
0
|
42
|
Guest Chair
|
16
|
19
|
35
|
Lobby/Lounge Chair
|
20
|
8
|
28
|
Training Rm. Chair
|
30
|
0
|
30
|
Tall Café Chair
|
12
|
0
|
12
|
Lunch Room Chair
|
0
|
100
|
100
|
|
|
|
|
TABLES
|
|
|
|
Conference Rm. Table
|
7
|
13
|
20
|
EBC Conference Rm. Table
|
2
|
0
|
2
|
Coffee/Lounge Table
|
6
|
3
|
9
|
Training Table
|
16
|
0
|
16
|
Lunch Room Table
|
0
|
23
|
23
|
Café Table
|
5
|
0
|
5
|
|
|
|
|
FILE CABINETS
|
|
|
|
4-Drawer File Cabinet
|
12
|
1
|
13
|
Vertical File Cabinet
|
4
|
0
|
4
|
|
|
|
|
MISCELLANEOUS
|
|
|
|
Freestanding White Boards
|
18
|
7
|
25
|
Metro Shelf
|
1
|
0
|
1
|
Bookshelf in open area
|
2
|
1
|
3
|
Podium
|
1
|
0
|
1
|
Freestanding Desk
|
4
|
1
|
5
|
2 post racks (all)
|
|
|
|
|
|
|
|
AV Equipment
|
|
|
|
Ceiling mounted AV Equipment (all)
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation
|
|
|
|
Palo Alto Networks (Australia) Pty Ltd
|
|
Australia
|
Palo Alto Networks (Brasil) Ltda.
|
|
Brazil
|
Palo Alto Networks (Canada) Inc.
|
|
Canada
|
Palo Alto Networks (Germany) GmbH
|
|
Germany
|
Palo Alto Networks (Malaysia), LLC
|
|
Delaware
|
Palo Alto Networks (Mexico) S. de R.L. de C.V.
|
|
Mexico
|
Palo Alto Networks (Netherlands) B.V.
|
|
Netherlands
|
Palo Alto Networks (Norway) AS
|
|
Norway
|
Palo Alto Networks (Singapore) PTE. LTD.
|
|
Singapore
|
Palo Alto Networks (UK) Limited
|
|
United Kingdom
|
Palo Alto Networks Belgium B.V.B.A.
|
|
Belgium
|
Palo Alto Networks FZ LLC
|
|
United Arab Emirates
|
Palo Alto Networks Godo Kaisha
|
|
Japan
|
Palo Alto Networks International, Inc.
|
|
Delaware
|
Palo Alto Networks Korea, Ltd.
|
|
South Korea
|
Palo Alto Networks, L.L.C.
|
|
Delaware
|
PAN C.V.
|
|
Netherlands
|
PAN LLC
|
|
Delaware
|
/s/ M
ARK
D. M
C
L
AUGHLIN
|
Mark D. McLaughlin
|
President, Chief Executive Officer and Director
|
/s/ S
TEFFAN
C. T
OMLINSON
|
Steffan C. Tomlinson
|
Chief Financial Officer
|
/s/ M
ARK
D. M
C
L
AUGHLIN
|
Mark D. McLaughlin
|
President, Chief Executive Officer and Director
|
/s/ S
TEFFAN
C. T
OMLINSON
|
Steffan C. Tomlinson
|
Chief Financial Officer
|