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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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3000 Tannery Way
Santa Clara, California 95054
(Address of principal executive offices, including zip code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, $0.0001 par value per share
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PANW
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New York Stock Exchange
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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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¨
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Smaller reporting company
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¨
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Emerging growth 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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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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expectations regarding drivers of and factors affecting growth in our business;
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•
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the performance advantages of our products and subscription and support offerings and the potential benefits to our customers;
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•
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trends in and expectations regarding billings, revenue (including our revenue mix), costs of revenue, gross margin, cash flows, interest expense, operating expenses (including future share-based compensation expense), income taxes, investment plans and liquidity;
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•
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our ability to and expectation that we will continue to grow our installed end-customer base;
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expected recurring revenues resulting from expected growth in our installed base and increased adoption of our products and cloud-based subscription services;
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•
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our expectations regarding future investments in research and development, customer support, and in our sales force, including expectations regarding growth in our sales headcount;
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•
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our ability to develop or acquire new product, subscription, and support offerings, improve our existing product, subscription, and support offerings, and increase the value of our product, subscription, and support offerings, including through deployment of new capabilities via security applications developed by third parties;
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•
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our expectation that we will continue to expand internationally;
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our expectation that we will continue to renew existing contracts and increase sales to our existing customer base;
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•
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seasonal trends in our results of operations;
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•
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expected impact of the adoption of certain recent accounting pronouncements and the anticipated timing of adopting such standards;
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our expectation that we will expand our facilities or add new facilities as we add employees and enter new geographic markets and expectations related to charges incurred in connection with exiting our former headquarter facilities;
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our plans to use the upfront cash reimbursement received from our landlords against future rental payments;
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the sufficiency of our cash flow from operations with existing cash and cash equivalents to meet our cash needs for the foreseeable future;
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future investments in product development, subscriptions, or technologies, and any related delays in the development or release of new product and subscription offerings;
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our ability to successfully acquire and integrate companies and assets;
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expectations and intentions with respect to the products and technologies that we acquire and introduce;
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the timing and amount of capital expenditures and share repurchases;
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our plans to acquire Zingbox, Inc. (“Zingbox”); the timing of when the Zingbox acquisition will be completed; the finalization of the accounting for the Zingbox acquisition; the expected benefit of the Zingbox acquisition to us and our customers; the expected impact of the acquisition on our offerings; and
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•
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other statements regarding our future operations, financial condition and prospects, and business strategies.
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ITEM 1.
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BUSINESS
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•
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Secure the network through our Next-Generation Firewalls, available as physical appliances, virtual appliances called VM-Series, or a cloud-delivered service called Prisma Access (formerly GlobalProtect cloud service), and Panorama management delivered as an appliance or as a virtual machine for the public or private cloud. This also includes security services such as WildFire, Threat Prevention, URL Filtering, GlobalProtect, and DNS Security that are delivered as SaaS subscriptions to our Next-Generation Firewalls.
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•
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Secure the endpoints through our Traps advanced endpoint protection software, delivered as a light-weight software agent with cloud or on-premise management capabilities.
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•
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Secure the cloud through our Prisma cloud security offerings, such as Prisma Public Cloud (formerly RedLock) for security and compliance in public clouds, Prisma Access (formerly GlobalProtect cloud service) for securing user access, Prisma SaaS (formerly Aperture) for protecting SaaS applications, VM-Series for in-line network security in public and private clouds, Traps for host-based public cloud infrastructure protection, and Twistlock for protecting containers in public and private clouds, as well as PureSec for protecting serverless functions in public clouds.
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•
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Secure the future of security operations through our Cortex platform, which includes Cortex XDR (formerly Magnifier) for detection and response, Cortex Data Lake (formerly Logging Service) to collect and integrate security data for analytics, Demisto for security orchestration, automation, and response (“SOAR”), and AutoFocus for threat intelligence. These products are delivered as software or SaaS subscriptions.
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•
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Threat Prevention Subscription. This subscription 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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•
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URL Filtering Subscription. This subscription provides the uniform resource locator (“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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•
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WildFire Subscription. This cloud-based or appliance-based subscription provides protection against targeted malware and advanced persistent threats, and provides a near real-time analysis engine for detecting previously unseen malware. The core component of this subscription 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, preventive measures are automatically generated and delivered to all subscribed devices. By providing this as a cloud-based subscription, all of our end-customers benefit from malware found on any network.
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•
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GlobalProtect Subscription. This appliance-based subscription 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 mobile devices, such as Android phones and tablets and 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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•
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VM-Series Subscription. VM-Series, the software form factor of our Next-Generation Firewall, is offered as both a perpetual license as well as a term-based subscription. The VM-Series provides all of the same security capabilities of our hardware appliances, but is delivered as a software package that can be deployed on VMware’s NSX and ESXi, Microsoft’s Hyper-V, and Red Hat KVM hypervisors, as well as natively in Amazon Web Services (“AWS”) cloud, Microsoft Azure cloud (“Azure”), and Google Cloud Platform (“GCP”).
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•
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Traps Endpoint Protection Subscription. This subscription provides protection for endpoints against cyberattacks that aim to run malicious code or exploit software vulnerabilities. It prevents known and previously unknown attacks through its unique capability of stopping the underlying exploit techniques and can prevent cyberattacks without relying on prior knowledge of the attack. Through its local machine learning engine, it can prevent cyberattacks that rely on malware, including continuously learning via its integration with WildFire. Traps offers the unique Behavioral Threat Protection engine intended to stop the most sophisticated attacks by examining multiple behaviors together to uncover and stop threats.
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•
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AutoFocus Subscription. This cloud-based subscription provides threat intelligence capabilities to our end-customers’ security operations teams. Indicators of compromise and anomalies that occur on an end-customer’s network can be correlated with similar data that has been centrally collected from among all our participating end-customers. This offers our end-customers priority alerts, deep attack context, and high-fidelity threat intelligence across millions of malware samples and tens of billions of file artifacts.
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•
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DNS Security Service Subscription. This cloud-based subscription uses machine learning to proactively block malicious domains and stops attacks in progress. It offers firewalls with access to DNS signatures generated using advanced predictive analysis and machine learning using malicious domain data from a growing threat intelligence sharing community.
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•
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Prisma Access (formerly GlobalProtect Cloud Service) Subscription. This cloud-based subscription enables our end-customers to utilize the preventive capabilities of our Security Operating Platform to secure remote offices and mobile users, providing consistent protection across globally distributed network and cloud environments without the need for firewall appliances or software in the remote locations. With this offering, our end-customers can quickly and easily add or remove remote locations and users, and establish and adjust security policies as needed, using a multi-tenant, cloud-based security infrastructure that we operate on their behalf.
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•
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Prisma Public Cloud (formerly RedLock) Subscription. This cloud-based subscription provides comprehensive visibility and threat detection across our end-customers’ public cloud environments.
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•
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Prisma SaaS (formerly Aperture) Subscription. This cloud-based subscription provides content control for IT-sanctioned SaaS applications. It offers end-customers the capability to safely use these SaaS applications and avert risks associated with improper sharing of confidential data and risks associated with sharing of malicious content.
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•
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Cortex Data Lake (formerly Logging Service) Subscription. This cloud-based subscription allows our end-customers to collect large amounts of context-rich data generated by our security offerings, including those of our Next-Generation Firewalls, Prisma Access (formerly GlobalProtect cloud service) subscription, and Traps, without needing to plan for local processing power and storage.
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•
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Cortex XDR (formerly Magnifier) Subscription. This cloud-based subscription enables organizations to identify and stop the most sophisticated attacks by applying AI and machine learning to rich network, endpoint, and cloud data.
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•
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Demisto. Available as a cloud-based subscription or on-premises appliance, Demisto is a comprehensive SOAR platform that combines playbook orchestration, incident management, and real-time collaboration to serve security teams across the incident lifecycle. With Demisto, security teams can standardize processes, automate repeatable tasks and manage incidents across their security product stack to improve response time and analyst productivity.
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•
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large companies that incorporate security features in their products, such as Cisco Systems, Inc. (“Cisco”) and Juniper Networks, Inc. (“Juniper”), or those that have acquired, or may acquire, large network and endpoint security vendors and have the technical and financial resources to bring competitive solutions to the market;
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•
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independent security vendors such as Symantec Corporation (“Symantec”), Check Point Software Technologies Ltd. (“Check Point”), Fortinet, Inc. (“Fortinet”), and FireEye, Inc. (“FireEye”) that offer a mix of network and endpoint security products; and
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•
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small and large companies that offer point solutions and/or cloud security services that compete with some of the features present in our platform.
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product features, reliability, performance, and effectiveness;
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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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price and total cost of ownership;
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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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brand awareness and reputation.
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ITEM 1A.
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RISK FACTORS
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our ability to attract and retain new end-customers or sell additional products and subscriptions to our existing end-customers;
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the budgeting cycles, seasonal buying patterns, and purchasing practices of our end-customers;
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changes in end-customer, distributor or reseller requirements, or market needs;
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price competition;
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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 and strategic partnerships entered into by and between our competitors;
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changes in the mix of our products, subscriptions, and support, including changes in multi-year subscriptions and support;
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our ability to successfully and continuously expand our business domestically and internationally;
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changes in the growth rate of the enterprise security market;
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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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the timing and costs related to the development or acquisition of technologies or businesses or strategic partnerships;
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lack of synergy or the inability to realize expected synergies, resulting from acquisitions or strategic partnerships;
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our inability to execute, complete or integrate efficiently any acquisitions that we may undertake;
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increased expenses, unforeseen liabilities, or write-downs and any impact on our operating results from any acquisitions we consummate;
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our ability to increase the size and productivity of our distribution channel;
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decisions by potential end-customers to purchase security solutions from larger, more established security vendors or from their primary network equipment vendors;
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changes in end-customer penetration or attach and renewal rates for our subscriptions;
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timing of revenue recognition and revenue deferrals;
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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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insolvency or credit difficulties confronting our end-customers, which could adversely affect their ability to purchase or pay for our products and subscription and support offerings, or confronting our key suppliers, including our sole source suppliers, which could disrupt our supply chain;
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any disruption in our channel or termination of our relationships with important channel partners, including as a result of consolidation among distributors and resellers of security solutions;
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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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the cost and potential outcomes of litigation, which could have a material adverse effect on our business;
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seasonality or cyclical fluctuations in our markets;
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future accounting pronouncements or changes in our accounting policies, including the impact of the adoption and implementation of the Financial Accounting Standards Board’s new standard regarding revenue recognition;
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increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates, as an increasing amount of our expenses is incurred and paid in currencies other than the U.S. dollar;
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political, economic and social instability caused by the referendum in June 2016, in which voters in the United Kingdom (the “U.K.”) approved an exit from the European Union (the “E.U.”) and the U.K. government subsequently notified the E.U. of its withdrawal, which is commonly referred to as “Brexit,” continued hostilities in the Middle East, terrorist activities, and any disruption these events may cause to the broader global industrial economy; and
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•
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general macroeconomic conditions, both domestically and in our foreign markets that could impact some or all regions where we operate.
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large companies that incorporate security features in their products, such as Cisco and Juniper, or those that have acquired, or may acquire, large network and endpoint security vendors and have the technical and financial resources to bring competitive solutions to the market;
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independent security vendors, such as Symantec, Check Point, Fortinet, and FireEye, that offer a mix of network and endpoint security products; and
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small and large companies that offer point solutions and/or cloud security services that compete with some of the features present in our platform.
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greater name recognition and longer operating histories;
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larger sales and marketing budgets and resources;
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broader distribution and established relationships with distribution partners and end-customers;
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greater customer support resources;
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greater resources to make strategic acquisitions or enter into strategic partnerships;
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lower labor and development costs;
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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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end-customers with a December 31 fiscal year-end choosing to spend remaining unused portions of their discretionary budgets before their fiscal year-end, which potentially results in a positive impact on our revenue in our second fiscal quarter;
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•
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our sales compensation plans, which are typically structured around annual quotas and commission rate accelerators, which potentially results in a positive impact on our revenue in our fourth fiscal quarter;
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•
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seasonal reductions in business activity during August in the United States, Europe and certain other regions, which potentially results in a negative impact on our first fiscal quarter revenue; and
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•
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the timing of end-customer budget planning at the beginning of the calendar year, which can result in a delay in spending at the beginning of the calendar year potentially resulting in a negative impact on our revenue in our third fiscal quarter.
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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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increased purchasing power and leverage held by large end-customers in negotiating contractual arrangements with us;
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more stringent requirements in our worldwide support contracts, including stricter support response times and penalties for any failure to meet support requirements; and
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longer sales cycles, in some cases over 12 months, 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 subscriptions.
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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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loss of existing or potential end-customers or channel partners;
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delayed or lost revenue;
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delay or failure to attain market acceptance;
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•
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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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litigation, regulatory inquiries, or investigations, each of which may be costly and harm our reputation.
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•
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political, economic and social uncertainty around the world, macroeconomic challenges in Europe, terrorist activities, and continued hostilities in the Middle East;
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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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greater risk of unexpected changes in foreign and domestic regulatory practices, tariffs, and tax laws and treaties, including regulatory and trade policy changes adopted by the current administration or foreign countries in response to regulatory changes adopted by the current administration;
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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, channel partners, distributors, and resellers to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, U.S. or foreign sanctions regimes and export or import control laws, and any trade regulations ensuring fair trade practices, which non-compliance could include increased costs;
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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;
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•
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increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
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•
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management communication and integration problems resulting from cultural and geographic dispersion; and
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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 related impact on sales cycles.
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•
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announcements of new products, subscriptions or technologies, commercial relationships, strategic partnerships, 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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news announcements that affect investor perception of our industry, including reports related to the discovery of significant cyberattacks;
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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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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, whether as a result of our forward- looking statements, our failure to meet such expectations or otherwise;
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•
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inaccurate or unfavorable research reports about our business and industry published by securities analysts or reduced coverage of our company by securities analysts;
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•
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litigation involving us, our industry, or both;
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•
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actions instituted by activist shareholders or others;
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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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sales or repurchases of large blocks of our common stock or substantial future sales by our directors, executive officers, employees and significant stockholders;
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•
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sales of our common stock by investors who view the Notes as a more attractive means of equity participation in us;
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•
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hedging or arbitrage trading activity involving our common stock as a result of the existence of the Notes;
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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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•
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establish that our board of directors is divided into three classes, Class I, Class II and Class III, with three-year staggered terms;
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•
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authorize 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;
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•
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provide our board of directors with the exclusive right 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;
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•
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prohibit our stockholders from taking action by written consent;
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•
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specify that special meetings of our 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;
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•
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require 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;
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•
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authorize our board of directors to amend our bylaws by majority vote; and
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•
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establish advance notice procedures with which our stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
|
ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
|
ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Company/Index
|
7/31/2014
|
|
7/31/2015
|
|
7/31/2016
|
|
7/31/2017
|
|
7/31/2018
|
|
7/31/2019
|
||||||||||||
Palo Alto Networks, Inc.
|
$
|
100.00
|
|
|
$
|
229.82
|
|
|
$
|
161.87
|
|
|
$
|
162.97
|
|
|
$
|
245.19
|
|
|
$
|
280.16
|
|
NYSE Composite Index
|
$
|
100.00
|
|
|
$
|
101.45
|
|
|
$
|
100.55
|
|
|
$
|
111.57
|
|
|
$
|
120.85
|
|
|
$
|
121.82
|
|
NYSE Arca Tech 100 Index
|
$
|
100.00
|
|
|
$
|
110.96
|
|
|
$
|
112.07
|
|
|
$
|
138.23
|
|
|
$
|
172.60
|
|
|
$
|
185.71
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended July 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Selected Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue(1)
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
|
$
|
1,378.5
|
|
|
$
|
928.1
|
|
Total gross profit(1)
|
2,091.2
|
|
|
1,628.5
|
|
|
1,278.7
|
|
|
1,008.5
|
|
|
676.6
|
|
|||||
Operating loss(1)
|
(54.1
|
)
|
|
(104.2
|
)
|
|
(165.8
|
)
|
|
(157.3
|
)
|
|
(99.8
|
)
|
|||||
Net loss(1)
|
$
|
(81.9
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(203.0
|
)
|
|
$
|
(192.7
|
)
|
|
$
|
(131.3
|
)
|
Net loss per share, basic and diluted(1)
|
$
|
(0.87
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(2.21
|
)
|
|
$
|
(1.61
|
)
|
Weighted-average shares used to compute net loss per share, basic and diluted
|
94.5
|
|
|
91.7
|
|
|
90.6
|
|
|
87.1
|
|
|
81.6
|
|
|
July 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Selected Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
961.4
|
|
|
$
|
2,506.9
|
|
|
$
|
744.3
|
|
|
$
|
734.4
|
|
|
$
|
375.8
|
|
Investments
|
2,417.1
|
|
|
1,444.0
|
|
|
1,420.0
|
|
|
1,204.0
|
|
|
952.0
|
|
|||||
Working capital(1)(2)
|
1,611.5
|
|
|
2,036.8
|
|
|
818.1
|
|
|
927.2
|
|
|
79.3
|
|
|||||
Total assets(1)
|
6,592.2
|
|
|
5,948.9
|
|
|
3,538.5
|
|
|
2,858.2
|
|
|
2,026.1
|
|
|||||
Total deferred revenue(1)
|
2,888.7
|
|
|
2,279.3
|
|
|
1,692.4
|
|
|
1,240.8
|
|
|
713.7
|
|
|||||
Convertible senior notes, net(2)
|
1,430.0
|
|
|
1,920.1
|
|
|
524.7
|
|
|
500.2
|
|
|
476.8
|
|
|||||
Common stock and additional paid-in capital
|
2,490.9
|
|
|
1,967.4
|
|
|
1,599.7
|
|
|
1,515.5
|
|
|
988.7
|
|
|||||
Total stockholders’ equity(1)
|
$
|
1,586.3
|
|
|
$
|
1,160.3
|
|
|
$
|
927.8
|
|
|
$
|
894.9
|
|
|
$
|
559.7
|
|
(1)
|
The amounts for fiscal 2018 and 2017 have been adjusted due to our adoption of the new revenue recognition standard. Fiscal years prior to 2017 have not been adjusted. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
(2)
|
The net carrying amount of the 2019 Notes was classified as a current liability in our consolidated balance sheets as of July 31, 2018, and July 31, 2015, and was classified as a long-term liability for all other prior periods presented. None of the 2019 Notes remained outstanding as of July 31, 2019. The net carrying amount of the 2023 Notes was classified as a long-term liability as of July 31, 2019 and July 31, 2018. Refer to Note 10. Debt in Part II, Item 8 of this Annual Report on Form 10-K for more information on the Notes.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview. A discussion of our business and overall analysis of financial and other highlights in order to provide context for the remainder of MD&A.
|
•
|
Key Financial Metrics. A summary of our GAAP and non-GAAP key financial metrics, which management monitors to evaluate our performance.
|
•
|
Results of Operations. A discussion of the nature and trends in our financial results and an analysis of our financial results comparing fiscal 2019 to 2018 and fiscal 2018 to 2017.
|
•
|
Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows, and a discussion of our financial condition and our ability to meet cash needs.
|
•
|
Contractual Obligations and Commitments. An overview of our contractual obligations, contingent liabilities, commitments, and off-balance sheet arrangements outstanding as of July 31, 2019, including expected payment schedules.
|
•
|
Critical Accounting Estimates. A discussion of our accounting policies that require critical estimates, assumptions, and judgments.
|
•
|
Recent Accounting Pronouncements. A discussion of expected impacts of impending accounting changes on financial information to be reported in the future.
|
•
|
Secure the network through our Next-Generation Firewalls, available as physical appliances, virtual appliances called VM-Series, or a cloud-delivered service called Prisma Access (formerly GlobalProtect cloud service), and Panorama management delivered as an appliance or as a virtual machine for the public or private cloud. This also includes security services such as WildFire, Threat Prevention, URL Filtering, GlobalProtect, and DNS Security that are delivered as SaaS subscriptions to our Next-Generation Firewalls.
|
•
|
Secure the endpoints through our Traps advanced endpoint protection software, delivered as a light-weight software agent with cloud or on-premise management capabilities.
|
•
|
Secure the cloud through our Prisma cloud security offerings, such as Prisma Public Cloud (formerly RedLock) for security and compliance in public clouds, Prisma Access (formerly GlobalProtect cloud service) for securing user access, Prisma SaaS (formerly Aperture) for protecting SaaS applications, VM-Series for in-line network security in public and private clouds, Traps for host-based public cloud infrastructure protection, and Twistlock for protecting containers in public and private clouds, as well as PureSec for protecting serverless functions in public clouds.
|
•
|
Secure the future of security operations through our Cortex platform, which includes Cortex XDR (formerly Magnifier) for detection and response, Cortex Data Lake (formerly Logging Service) to collect and integrate security data for analytics, Demisto for security orchestration, automation, and response (“SOAR”), and AutoFocus for threat intelligence. These products are delivered as software or SaaS subscriptions.
|
|
July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Total deferred revenue(1)
|
$
|
2,888.7
|
|
|
$
|
2,279.3
|
|
Cash, cash equivalents, and investments
|
$
|
3,378.5
|
|
|
$
|
3,950.9
|
|
(1)
|
The amount for fiscal 2018 has been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018(1)
|
|
2017(1)
|
||||||
|
(dollars in millions)
|
||||||||||
Total revenue
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
Total revenue year-over-year percentage increase
|
27.5
|
%
|
|
29.5
|
%
|
|
27.3
|
%
|
|||
Gross margin
|
72.1
|
%
|
|
71.6
|
%
|
|
72.9
|
%
|
|||
Operating loss
|
$
|
(54.1
|
)
|
|
$
|
(104.2
|
)
|
|
$
|
(165.8
|
)
|
Operating margin
|
(1.9
|
)%
|
|
(4.6
|
)%
|
|
(9.4
|
)%
|
|||
Billings
|
$
|
3,489.8
|
|
|
$
|
2,856.2
|
|
|
$
|
2,251.7
|
|
Billings year-over-year percentage increase
|
22.2
|
%
|
|
26.8
|
%
|
|
18.2
|
%
|
|||
Cash flow provided by operating activities
|
$
|
1,055.6
|
|
|
$
|
1,038.1
|
|
|
$
|
868.8
|
|
Free cash flow (non-GAAP)
|
$
|
924.4
|
|
|
$
|
926.1
|
|
|
$
|
705.4
|
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard and new guidance related to the presentation of restricted cash and cash equivalents in the statement of cash flows. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
•
|
Deferred Revenue. Our deferred revenue primarily consists of amounts that have been invoiced but have not been recognized as revenue as of the period end. The majority of our deferred revenue balance consists of subscription and support 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.
|
•
|
Billings. We define billings as total revenue plus the change in total deferred revenue, net of acquired deferred revenue, during the period. We consider billings to be a key metric used by management to manage our business given our hybrid SaaS revenue model, and believe billings provides investors with an important indicator of the health and visibility of our business because it includes subscription and support revenue, which is recognized ratably over the contractual service period, and product revenue, which is recognized at the time of shipment, provided that all other conditions for revenue recognition have been met. We consider billings to be a useful metric for management and investors, particularly if we continue to experience increased sales of subscriptions and strong renewal rates for subscription and support offerings, and as we monitor our near-term cash flows. While we believe that billings provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management, it is important to note that other companies, including companies in our industry, may not use billings, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of billings as a comparative measure. We calculate billings in the following manner:
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018(1)
|
|
2017(1)
|
||||||
|
(in millions)
|
||||||||||
Billings:
|
|
|
|
|
|
||||||
Total revenue
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
Add: change in total deferred revenue, net of acquired deferred revenue
|
590.2
|
|
|
582.6
|
|
|
496.6
|
|
|||
Billings
|
$
|
3,489.8
|
|
|
$
|
2,856.2
|
|
|
$
|
2,251.7
|
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
•
|
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 subscription and support offerings. 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 profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures. A limitation of the utility of free cash flow as a measure of our financial performance and liquidity is that it does not represent the total increase or decrease in our cash balance for the period. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure. A reconciliation of free cash flow to cash flow provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below:
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Free cash flow (non-GAAP):
|
|
|
|
|
|
||||||
Net cash provided by operating activities(1)
|
$
|
1,055.6
|
|
|
$
|
1,038.1
|
|
|
$
|
868.8
|
|
Less: purchases of property, equipment, and other assets
|
131.2
|
|
|
112.0
|
|
|
163.4
|
|
|||
Free cash flow (non-GAAP)(1)
|
$
|
924.4
|
|
|
$
|
926.1
|
|
|
$
|
705.4
|
|
Net cash used in investing activities
|
$
|
(1,825.9
|
)
|
|
$
|
(520.0
|
)
|
|
$
|
(472.6
|
)
|
Net cash provided by (used in) financing activities
|
$
|
(773.9
|
)
|
|
$
|
1,245.6
|
|
|
$
|
(386.0
|
)
|
(1)
|
The amounts for fiscal 2018 and fiscal 2017 have been adjusted due to our adoption of new guidance related to the presentation of restricted cash and cash equivalents in the statement of cash flows. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|||||||||||||||||||
|
2019
|
|
2018(1)
|
|
2017(1)
|
|||||||||||||||
|
Amount
|
|
% of Revenue
|
|
Amount
|
|
% of Revenue
|
|
Amount
|
|
% of Revenue
|
|||||||||
|
(dollars in millions)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
1,096.2
|
|
|
37.8
|
%
|
|
$
|
879.8
|
|
|
38.7
|
%
|
|
$
|
708.5
|
|
|
40.4
|
%
|
Subscription and support
|
1,803.4
|
|
|
62.2
|
%
|
|
1,393.8
|
|
|
61.3
|
%
|
|
1,046.6
|
|
|
59.6
|
%
|
|||
Total revenue
|
2,899.6
|
|
|
100.0
|
%
|
|
2,273.6
|
|
|
100.0
|
%
|
|
1,755.1
|
|
|
100.0
|
%
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
315.9
|
|
|
10.9
|
%
|
|
272.4
|
|
|
12.0
|
%
|
|
201.4
|
|
|
11.5
|
%
|
|||
Subscription and support
|
492.5
|
|
|
17.0
|
%
|
|
372.7
|
|
|
16.4
|
%
|
|
275.0
|
|
|
15.6
|
%
|
|||
Total cost of revenue(2)
|
808.4
|
|
|
27.9
|
%
|
|
645.1
|
|
|
28.4
|
%
|
|
476.4
|
|
|
27.1
|
%
|
|||
Total gross profit
|
2,091.2
|
|
|
72.1
|
%
|
|
1,628.5
|
|
|
71.6
|
%
|
|
1,278.7
|
|
|
72.9
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
539.5
|
|
|
18.6
|
%
|
|
400.7
|
|
|
17.6
|
%
|
|
347.4
|
|
|
19.8
|
%
|
|||
Sales and marketing
|
1,344.0
|
|
|
46.4
|
%
|
|
1,074.2
|
|
|
47.3
|
%
|
|
898.8
|
|
|
51.2
|
%
|
|||
General and administrative
|
261.8
|
|
|
9.0
|
%
|
|
257.8
|
|
|
11.3
|
%
|
|
198.3
|
|
|
11.3
|
%
|
|||
Total operating expenses(2)
|
2,145.3
|
|
|
74.0
|
%
|
|
1,732.7
|
|
|
76.2
|
%
|
|
1,444.5
|
|
|
82.3
|
%
|
|||
Operating loss
|
(54.1
|
)
|
|
(1.9
|
)%
|
|
(104.2
|
)
|
|
(4.6
|
)%
|
|
(165.8
|
)
|
|
(9.4
|
)%
|
|||
Interest expense
|
(83.9
|
)
|
|
(2.9
|
)%
|
|
(29.6
|
)
|
|
(1.3
|
)%
|
|
(24.5
|
)
|
|
(1.4
|
)%
|
|||
Other income, net
|
63.4
|
|
|
2.2
|
%
|
|
28.5
|
|
|
1.3
|
%
|
|
10.2
|
|
|
0.5
|
%
|
|||
Loss before income taxes
|
(74.6
|
)
|
|
(2.6
|
)%
|
|
(105.3
|
)
|
|
(4.6
|
)%
|
|
(180.1
|
)
|
|
(10.3
|
)%
|
|||
Provision for income taxes
|
7.3
|
|
|
0.2
|
%
|
|
16.9
|
|
|
0.8
|
%
|
|
22.9
|
|
|
1.3
|
%
|
|||
Net loss
|
$
|
(81.9
|
)
|
|
(2.8
|
)%
|
|
$
|
(122.2
|
)
|
|
(5.4
|
)%
|
|
$
|
(203.0
|
)
|
|
(11.6
|
)%
|
(1)
|
Certain amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
(2)
|
Includes share-based compensation as follows:
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Cost of product revenue
|
$
|
5.6
|
|
|
$
|
7.0
|
|
|
$
|
7.3
|
|
Cost of subscription and support revenue
|
71.3
|
|
|
66.7
|
|
|
56.2
|
|
|||
Research and development
|
186.8
|
|
|
145.2
|
|
|
152.6
|
|
|||
Sales and marketing
|
221.9
|
|
|
208.0
|
|
|
186.5
|
|
|||
General and administrative
|
102.1
|
|
|
77.0
|
|
|
73.1
|
|
|||
Total share-based compensation
|
$
|
587.7
|
|
|
$
|
503.9
|
|
|
$
|
475.7
|
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018(1)
|
|
Change
|
|
2018(1)
|
|
2017(1)
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Product
|
$
|
1,096.2
|
|
|
$
|
879.8
|
|
|
$
|
216.4
|
|
|
24.6
|
%
|
|
$
|
879.8
|
|
|
$
|
708.5
|
|
|
$
|
171.3
|
|
|
24.2
|
%
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018(1)
|
|
Change
|
|
2018(1)
|
|
2017(1)
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Subscription
|
$
|
1,032.7
|
|
|
$
|
758.1
|
|
|
$
|
274.6
|
|
|
36.2
|
%
|
|
$
|
758.1
|
|
|
$
|
548.8
|
|
|
$
|
209.3
|
|
|
38.1
|
%
|
Support
|
770.7
|
|
|
635.7
|
|
|
135.0
|
|
|
21.2
|
%
|
|
635.7
|
|
|
497.8
|
|
|
137.9
|
|
|
27.7
|
%
|
||||||
Total subscription and support
|
$
|
1,803.4
|
|
|
$
|
1,393.8
|
|
|
$
|
409.6
|
|
|
29.4
|
%
|
|
$
|
1,393.8
|
|
|
$
|
1,046.6
|
|
|
$
|
347.2
|
|
|
33.2
|
%
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018(1)
|
|
Change
|
|
2018(1)
|
|
2017(1)
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Americas
|
$
|
1,982.3
|
|
|
$
|
1,558.7
|
|
|
$
|
423.6
|
|
|
27.2
|
%
|
|
$
|
1,558.7
|
|
|
$
|
1,230.6
|
|
|
$
|
328.1
|
|
|
26.7
|
%
|
EMEA
|
564.8
|
|
|
439.6
|
|
|
125.2
|
|
|
28.5
|
%
|
|
439.6
|
|
|
320.3
|
|
|
119.3
|
|
|
37.2
|
%
|
||||||
APAC
|
352.5
|
|
|
275.3
|
|
|
77.2
|
|
|
28.0
|
%
|
|
275.3
|
|
|
204.2
|
|
|
71.1
|
|
|
34.8
|
%
|
||||||
Total revenue
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
626.0
|
|
|
27.5
|
%
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
|
$
|
518.5
|
|
|
29.5
|
%
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Cost of product revenue
|
$
|
315.9
|
|
|
$
|
272.4
|
|
|
$
|
43.5
|
|
|
16.0
|
%
|
|
$
|
272.4
|
|
|
$
|
201.4
|
|
|
$
|
71.0
|
|
|
35.3
|
%
|
Number of employees at period end
|
102
|
|
|
97
|
|
|
5
|
|
|
5.2
|
%
|
|
97
|
|
|
96
|
|
|
1
|
|
|
1.0
|
%
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Cost of subscription and support revenue(1)
|
$
|
492.5
|
|
|
$
|
372.7
|
|
|
$
|
119.8
|
|
|
32.1
|
%
|
|
$
|
372.7
|
|
|
$
|
275.0
|
|
|
$
|
97.7
|
|
|
35.5
|
%
|
Number of employees at period end
|
1,219
|
|
|
932
|
|
|
287
|
|
|
30.8
|
%
|
|
932
|
|
|
725
|
|
|
207
|
|
|
28.6
|
%
|
(1)
|
The amounts for fiscal 2018 and 2017 have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|||||||||||||||||||
|
2019
|
|
2018(1)
|
|
2017(1)
|
|||||||||||||||
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin |
|||||||||
|
(dollars in millions)
|
|||||||||||||||||||
Product
|
$
|
780.3
|
|
|
71.2
|
%
|
|
$
|
607.4
|
|
|
69.0
|
%
|
|
$
|
507.1
|
|
|
71.6
|
%
|
Subscription and support
|
1,310.9
|
|
|
72.7
|
%
|
|
1,021.1
|
|
|
73.3
|
%
|
|
771.6
|
|
|
73.7
|
%
|
|||
Total gross profit
|
$
|
2,091.2
|
|
|
72.1
|
%
|
|
$
|
1,628.5
|
|
|
71.6
|
%
|
|
$
|
1,278.7
|
|
|
72.9
|
%
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Research and development
|
$
|
539.5
|
|
|
$
|
400.7
|
|
|
$
|
138.8
|
|
|
34.6
|
%
|
|
$
|
400.7
|
|
|
$
|
347.4
|
|
|
$
|
53.3
|
|
|
15.3
|
%
|
Number of employees at period end
|
1,507
|
|
|
947
|
|
|
560
|
|
|
59.1
|
%
|
|
947
|
|
|
766
|
|
|
181
|
|
|
23.6
|
%
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Sales and marketing(1)
|
$
|
1,344.0
|
|
|
$
|
1,074.2
|
|
|
$
|
269.8
|
|
|
25.1
|
%
|
|
$
|
1,074.2
|
|
|
$
|
898.8
|
|
|
$
|
175.4
|
|
|
19.5
|
%
|
Number of employees at period end
|
3,382
|
|
|
2,704
|
|
|
678
|
|
|
25.1
|
%
|
|
2,704
|
|
|
2,418
|
|
|
286
|
|
|
11.8
|
%
|
(1)
|
The amounts for fiscal 2018 and 2017 have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
General and administrative
|
$
|
261.8
|
|
|
$
|
257.8
|
|
|
$
|
4.0
|
|
|
1.6
|
%
|
|
$
|
257.8
|
|
|
$
|
198.3
|
|
|
$
|
59.5
|
|
|
30.0
|
%
|
Number of employees at period end
|
804
|
|
|
668
|
|
|
136
|
|
|
20.4
|
%
|
|
668
|
|
|
557
|
|
|
111
|
|
|
19.9
|
%
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Interest expense
|
$
|
83.9
|
|
|
$
|
29.6
|
|
|
$
|
54.3
|
|
|
183.4
|
%
|
|
$
|
29.6
|
|
|
$
|
24.5
|
|
|
$
|
5.1
|
|
|
20.8
|
%
|
|
Year Ended July 31,
|
|
|
|
Year Ended July 31,
|
|
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Other income, net
|
$
|
63.4
|
|
|
$
|
28.5
|
|
|
$
|
34.9
|
|
|
122.5
|
%
|
|
$
|
28.5
|
|
|
$
|
10.2
|
|
|
$
|
18.3
|
|
|
179.4
|
%
|
|
Year Ended July 31,
|
|
|
|
|
|
Year Ended July 31,
|
|
|
|
|
||||||||||||||||||
|
2019
|
|
2018(1)
|
|
Change
|
|
2018(1)
|
|
2017(1)
|
|
Change
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
|
Amount
|
|
Amount
|
|
Amount
|
|
%
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||||
Provision for income taxes
|
$
|
7.3
|
|
|
$
|
16.9
|
|
|
$
|
(9.6
|
)
|
|
(56.8
|
)%
|
|
$
|
16.9
|
|
|
$
|
22.9
|
|
|
$
|
(6.0
|
)
|
|
(26.2
|
)%
|
Effective tax rate
|
(9.8
|
)%
|
|
(16.0
|
)%
|
|
|
|
|
|
(16.0
|
)%
|
|
(12.7
|
)%
|
|
|
|
|
(1)
|
These amounts have been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Working capital(1)(2)
|
$
|
1,611.5
|
|
|
$
|
2,036.8
|
|
Cash, cash equivalents, and investments:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
961.4
|
|
|
$
|
2,506.9
|
|
Investments
|
2,417.1
|
|
|
1,444.0
|
|
||
Total cash, cash equivalents, and investments
|
$
|
3,378.5
|
|
|
$
|
3,950.9
|
|
(1)
|
The amount for fiscal 2018 has been adjusted due to our adoption of the new revenue recognition standard. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
(2)
|
The net carrying amount of the 2019 Notes was classified in current liabilities on our consolidated balance sheets as of July 31, 2018. Refer to Note 10. Debt in Part II, Item 8 of this Annual Report on Form 10-K for information on the Notes.
|
|
Year Ended July 31,
|
||||||||||
2019
|
|
2018
|
|
2017
|
|||||||
|
(in millions)
|
||||||||||
Net cash provided by operating activities(1)
|
$
|
1,055.6
|
|
|
$
|
1,038.1
|
|
|
$
|
868.8
|
|
Net cash used in investing activities
|
(1,825.9
|
)
|
|
(520.0
|
)
|
|
(472.6
|
)
|
|||
Net cash provided by (used in) financing activities
|
(773.9
|
)
|
|
1,245.6
|
|
|
(386.0
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash(1)
|
$
|
(1,544.2
|
)
|
|
$
|
1,763.7
|
|
|
$
|
10.2
|
|
(1)
|
The amounts for fiscal 2018 and 2017 have been adjusted due to our adoption of new guidance related to the presentation of restricted cash and cash equivalents in the statement of cash flows. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K for more information.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than 1
Year |
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5
Years |
||||||||||
|
|
|
(in millions)
|
|
|
||||||||||||||
0.75% Convertible Senior Notes due 2023
|
$
|
1,693.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,693.0
|
|
|
$
|
—
|
|
Operating lease obligations(1)
|
491.8
|
|
|
74.1
|
|
|
130.1
|
|
|
105.7
|
|
|
181.9
|
|
|||||
Purchase obligations(2)
|
427.6
|
|
|
119.2
|
|
|
85.9
|
|
|
125.0
|
|
|
97.5
|
|
|||||
Total(3)
|
$
|
2,612.4
|
|
|
$
|
193.3
|
|
|
$
|
216.0
|
|
|
$
|
1,923.7
|
|
|
$
|
279.4
|
|
(1)
|
Consists of contractual obligations from our non-cancelable operating leases. Excludes contractual sublease proceeds of $9.8 million, which consists of $5.6 million to be received in less than one year and $4.2 million to be received in one to three years. Refer to Note 11. Commitments and Contingencies in Part II, Item 8 of this Annual Report on Form 10-K for more information on our operating leases.
|
(2)
|
Consists of minimum purchase commitments of products and components with our manufacturing partners and component suppliers, as well as minimum or fixed purchase commitments for our use of certain cloud and other services with third-party providers. Obligations under contracts that we can cancel without a significant penalty are not included in the table above.
|
(3)
|
No amounts related to income taxes are included. As of July 31, 2019, we had approximately $72.9 million of tax liabilities recorded related to uncertainty in income tax positions.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
Revenue Recognition
|
Description of the Matter
|
|
As described in Note 1 to the consolidated financial statements, the Company adopted ASU No. 2014‑09, Revenue from Contracts with Customers, as amended, in the year ended July 31, 2019. The Company’s contracts with customers sometimes contain multiple performance obligations, which are accounted for separately if they are distinct. In such cases, the transaction price is then allocated to the distinct performance obligations on a relative standalone selling price basis and revenue is recognized when control of the distinct performance obligation is transferred. For example, product revenue is recognized at the time of hardware shipment or delivery of software license, and subscription and support revenue is recognized over time as the services are performed.
Auditing the Company’s revenue recognition was challenging, specifically related to the effort required to analyze the effect of ASU No. 2014‑09 on the Company’s various product offerings as part of the Company’s implementation using the full retrospective method of adoption, as well as ongoing accounting. This included the identification and determination of the distinct performance obligations and the timing of revenue recognition. For example, there were nonstandard terms and conditions that required judgment to determine the distinct performance obligations and the impact on the timing of revenue recognition.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s process and controls to identify and determine the distinct performance obligations and the timing of revenue recognition.
Among the procedures we performed to test the identification and determination of the distinct performance obligations and the timing of revenue recognition, we read the executed contract and purchase order to understand the contract, identified the performance obligation(s), determined the distinct performance obligations, and evaluated the timing of revenue recognition for a sample of individual sales transactions. We evaluated the accuracy of the Company’s contract summary documentation, specifically related to the identification and determination of distinct performance obligations and the timing of revenue recognition.
|
|
|
Business Combinations
|
Description of the Matter
|
|
As of July 31, 2019, the Company completed the acquisition of Demisto, Inc. for net consideration of $474.2 million, the acquisition of RedLock Inc. for net consideration of $158.2 million, and the acquisition of Twistlock Ltd. for net consideration of $378.1 million. As discussed in Note 6 to the consolidated financial statements, the Company accounted for these acquisitions as business combinations.
Auditing the accounting for acquisitions was complex due to the significant estimation uncertainty in determining the fair values of identified intangible assets, which primarily consisted of developed technology of $156.7 million and customer relationships of $27.6 million. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about future performance of the acquired businesses and due to the limited historical data on which to base these assumptions. The significant assumptions used to form the basis of the forecasted results included revenue growth rates and technology migration curves. These significant assumptions were forward-looking and could be affected by future economic and market conditions.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its accounting for acquisitions. This included testing controls over the estimation process supporting the recognition and measurement of identified intangible assets, and management’s judgment and evaluation of underlying assumptions and estimates with regards to the fair values of the identified intangible assets.
To test the estimated fair values of the identified intangible assets, our audit procedures included, among others, involvement of a specialist to assist us in the evaluation of the Company’s valuation methodology and testing of the significant assumptions. For example, we compared the revenue growth rates and technology migration curves to current industry, market and economic trends. Additionally, we tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.
|
|
July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
(As Adjusted)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
961.4
|
|
|
$
|
2,506.9
|
|
Short-term investments
|
1,841.7
|
|
|
896.5
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $0.8 and $1.2 at July 31, 2019 and July 31, 2018, respectively
|
582.4
|
|
|
467.0
|
|
||
Prepaid expenses and other current assets
|
279.3
|
|
|
268.1
|
|
||
Total current assets
|
3,664.8
|
|
|
4,138.5
|
|
||
Property and equipment, net
|
296.0
|
|
|
273.1
|
|
||
Long-term investments
|
575.4
|
|
|
547.5
|
|
||
Goodwill
|
1,352.3
|
|
|
522.8
|
|
||
Intangible assets, net
|
280.6
|
|
|
140.8
|
|
||
Other assets
|
423.1
|
|
|
326.2
|
|
||
Total assets
|
$
|
6,592.2
|
|
|
$
|
5,948.9
|
|
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
73.3
|
|
|
$
|
49.4
|
|
Accrued compensation
|
235.5
|
|
|
163.7
|
|
||
Accrued and other liabilities
|
162.4
|
|
|
124.6
|
|
||
Deferred revenue
|
1,582.1
|
|
|
1,213.6
|
|
||
Convertible senior notes, net
|
—
|
|
|
550.4
|
|
||
Total current liabilities
|
2,053.3
|
|
|
2,101.7
|
|
||
Convertible senior notes, net
|
1,430.0
|
|
|
1,369.7
|
|
||
Long-term deferred revenue
|
1,306.6
|
|
|
1,065.7
|
|
||
Other long-term liabilities
|
216.0
|
|
|
229.6
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Temporary equity
|
—
|
|
|
21.9
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock; $0.0001 par value; 100.0 shares authorized; none issued and outstanding at July 31, 2019 and July 31, 2018
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital; $0.0001 par value; 1,000.0 shares authorized; 96.8 and 93.6 shares issued and outstanding at July 31, 2019 and July 31, 2018, respectively
|
2,490.9
|
|
|
1,967.4
|
|
||
Accumulated other comprehensive loss
|
(3.7
|
)
|
|
(16.4
|
)
|
||
Accumulated deficit
|
(900.9
|
)
|
|
(790.7
|
)
|
||
Total stockholders’ equity
|
1,586.3
|
|
|
1,160.3
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
$
|
6,592.2
|
|
|
$
|
5,948.9
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
1,096.2
|
|
|
$
|
879.8
|
|
|
$
|
708.5
|
|
Subscription and support
|
1,803.4
|
|
|
1,393.8
|
|
|
1,046.6
|
|
|||
Total revenue
|
2,899.6
|
|
|
2,273.6
|
|
|
1,755.1
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product
|
315.9
|
|
|
272.4
|
|
|
201.4
|
|
|||
Subscription and support
|
492.5
|
|
|
372.7
|
|
|
275.0
|
|
|||
Total cost of revenue
|
808.4
|
|
|
645.1
|
|
|
476.4
|
|
|||
Total gross profit
|
2,091.2
|
|
|
1,628.5
|
|
|
1,278.7
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
539.5
|
|
|
400.7
|
|
|
347.4
|
|
|||
Sales and marketing
|
1,344.0
|
|
|
1,074.2
|
|
|
898.8
|
|
|||
General and administrative
|
261.8
|
|
|
257.8
|
|
|
198.3
|
|
|||
Total operating expenses
|
2,145.3
|
|
|
1,732.7
|
|
|
1,444.5
|
|
|||
Operating loss
|
(54.1
|
)
|
|
(104.2
|
)
|
|
(165.8
|
)
|
|||
Interest expense
|
(83.9
|
)
|
|
(29.6
|
)
|
|
(24.5
|
)
|
|||
Other income, net
|
63.4
|
|
|
28.5
|
|
|
10.2
|
|
|||
Loss before income taxes
|
(74.6
|
)
|
|
(105.3
|
)
|
|
(180.1
|
)
|
|||
Provision for income taxes
|
7.3
|
|
|
16.9
|
|
|
22.9
|
|
|||
Net loss
|
$
|
(81.9
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(203.0
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.87
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
(2.24
|
)
|
Weighted-average shares used to compute net loss per share, basic and diluted
|
94.5
|
|
|
91.7
|
|
|
90.6
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Net loss
|
$
|
(81.9
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(203.0
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in unrealized gains (losses) on investments
|
10.4
|
|
|
(7.5
|
)
|
|
(4.3
|
)
|
|||
Change in unrealized gains (losses) on cash flow hedges
|
2.3
|
|
|
(5.5
|
)
|
|
(0.1
|
)
|
|||
Other comprehensive income (loss)
|
12.7
|
|
|
(13.0
|
)
|
|
(4.4
|
)
|
|||
Comprehensive loss
|
$
|
(69.2
|
)
|
|
$
|
(135.2
|
)
|
|
$
|
(207.4
|
)
|
|
Common Stock
and
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
|
|
|
|
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
|||||||||
Balance as of July 31, 2016
|
90.5
|
|
|
$
|
1,515.5
|
|
|
$
|
1.0
|
|
|
$
|
(467.0
|
)
|
|
$
|
1,049.5
|
|
Cumulative-effect adjustment from adoption of new accounting pronouncement
|
—
|
|
|
2.0
|
|
|
—
|
|
|
1.5
|
|
|
3.5
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(203.0
|
)
|
|
(203.0
|
)
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
||||
Issuance of common stock in connection with employee equity incentive plans
|
4.3
|
|
|
46.3
|
|
|
—
|
|
|
—
|
|
|
46.3
|
|
||||
Repurchase and retirement of common stock
|
(3.3
|
)
|
|
(420.1
|
)
|
|
—
|
|
|
—
|
|
|
(420.1
|
)
|
||||
Taxes paid related to net share settlement of equity awards
|
—
|
|
|
(21.4
|
)
|
|
—
|
|
|
—
|
|
|
(21.4
|
)
|
||||
Share-based compensation for equity-based awards
|
—
|
|
|
477.4
|
|
|
—
|
|
|
—
|
|
|
477.4
|
|
||||
Balance as of July 31, 2017
|
91.5
|
|
|
1,599.7
|
|
|
(3.4
|
)
|
|
(668.5
|
)
|
|
927.8
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(122.2
|
)
|
|
(122.2
|
)
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
(13.0
|
)
|
||||
Issuance of common stock in connection with employee equity incentive plans
|
3.8
|
|
|
55.0
|
|
|
—
|
|
|
—
|
|
|
55.0
|
|
||||
Repurchase and retirement of common stock
|
(1.7
|
)
|
|
(250.0
|
)
|
|
—
|
|
|
—
|
|
|
(250.0
|
)
|
||||
Taxes paid related to net share settlement of equity awards
|
—
|
|
|
(43.7
|
)
|
|
—
|
|
|
—
|
|
|
(43.7
|
)
|
||||
Share-based compensation for equity-based awards
|
—
|
|
|
502.5
|
|
|
—
|
|
|
—
|
|
|
502.5
|
|
||||
Temporary equity reclassification
|
—
|
|
|
(21.9
|
)
|
|
—
|
|
|
—
|
|
|
(21.9
|
)
|
||||
Equity component of convertible senior notes, net
|
—
|
|
|
312.4
|
|
|
—
|
|
|
—
|
|
|
312.4
|
|
||||
Issuance of warrants
|
—
|
|
|
145.4
|
|
|
—
|
|
|
—
|
|
|
145.4
|
|
||||
Purchase of note hedges
|
—
|
|
|
(332.0
|
)
|
|
—
|
|
|
—
|
|
|
(332.0
|
)
|
||||
Balance as of July 31, 2018
|
93.6
|
|
|
1,967.4
|
|
|
(16.4
|
)
|
|
(790.7
|
)
|
|
1,160.3
|
|
||||
Cumulative-effect adjustment from adoption of new accounting pronouncement
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.3
|
)
|
|
(28.3
|
)
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(81.9
|
)
|
|
(81.9
|
)
|
||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
12.7
|
|
||||
Issuance of common stock in connection with employee equity incentive plans
|
3.8
|
|
|
72.0
|
|
|
—
|
|
|
—
|
|
|
72.0
|
|
||||
Taxes paid related to net share settlement of equity awards
|
—
|
|
|
(33.2
|
)
|
|
—
|
|
|
—
|
|
|
(33.2
|
)
|
||||
Share-based compensation for equity-based awards
|
—
|
|
|
575.5
|
|
|
—
|
|
|
—
|
|
|
575.5
|
|
||||
Repurchase and retirement of common stock
|
(1.9
|
)
|
|
(330.0
|
)
|
|
—
|
|
|
—
|
|
|
(330.0
|
)
|
||||
Settlement of convertible notes
|
2.5
|
|
|
(12.2
|
)
|
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
||||
Common stock received from exercise of note hedges
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuance of common and restricted common stock in connection with acquisitions
|
1.3
|
|
|
229.5
|
|
|
—
|
|
|
—
|
|
|
229.5
|
|
||||
Temporary equity reclassification
|
—
|
|
|
21.9
|
|
|
—
|
|
|
—
|
|
|
21.9
|
|
||||
Balance as of July 31, 2019
|
96.8
|
|
|
$
|
2,490.9
|
|
|
$
|
(3.7
|
)
|
|
$
|
(900.9
|
)
|
|
$
|
1,586.3
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(81.9
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(203.0
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Share-based compensation for equity-based awards
|
567.7
|
|
|
496.7
|
|
|
474.5
|
|
|||
Depreciation and amortization
|
153.8
|
|
|
96.4
|
|
|
59.8
|
|
|||
Cease-use loss and asset impairment related to facility exit
|
7.0
|
|
|
41.1
|
|
|
20.9
|
|
|||
Amortization of deferred contract costs
|
223.8
|
|
|
149.8
|
|
|
107.4
|
|
|||
Amortization of debt discount and debt issuance costs
|
70.2
|
|
|
28.8
|
|
|
24.5
|
|
|||
Amortization of investment premiums, net of accretion of purchase discounts
|
(17.5
|
)
|
|
0.5
|
|
|
2.7
|
|
|||
Loss on conversions of convertible senior notes
|
2.6
|
|
|
—
|
|
|
—
|
|
|||
Repayments of convertible senior notes attributable to debt discount
|
(97.6
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(108.7
|
)
|
|
(33.7
|
)
|
|
(42.1
|
)
|
|||
Prepaid expenses and other assets
|
(332.5
|
)
|
|
(299.1
|
)
|
|
(175.3
|
)
|
|||
Accounts payable
|
32.3
|
|
|
3.7
|
|
|
5.9
|
|
|||
Accrued compensation
|
66.8
|
|
|
44.2
|
|
|
42.8
|
|
|||
Accrued and other liabilities
|
(20.6
|
)
|
|
49.3
|
|
|
54.1
|
|
|||
Deferred revenue
|
590.2
|
|
|
582.6
|
|
|
496.6
|
|
|||
Net cash provided by operating activities
|
1,055.6
|
|
|
1,038.1
|
|
|
868.8
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
(2,984.6
|
)
|
|
(725.7
|
)
|
|
(995.9
|
)
|
|||
Proceeds from sales of investments
|
6.5
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from maturities of investments
|
2,057.1
|
|
|
691.8
|
|
|
777.4
|
|
|||
Business acquisitions, net of cash acquired
|
(773.7
|
)
|
|
(374.1
|
)
|
|
(90.7
|
)
|
|||
Purchases of property, equipment, and other assets
|
(131.2
|
)
|
|
(112.0
|
)
|
|
(163.4
|
)
|
|||
Net cash used in investing activities
|
(1,825.9
|
)
|
|
(520.0
|
)
|
|
(472.6
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Repayments of convertible senior notes attributable to principal and equity component
|
(477.4
|
)
|
|
—
|
|
|
—
|
|
|||
Payments for debt issuance costs
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from borrowings on convertible senior notes, net
|
—
|
|
|
1,682.4
|
|
|
—
|
|
|||
Proceeds from issuance of warrants
|
—
|
|
|
145.4
|
|
|
—
|
|
|||
Purchase of note hedges
|
—
|
|
|
(332.0
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
(330.0
|
)
|
|
(259.1
|
)
|
|
(411.0
|
)
|
|||
Proceeds from sales of shares through employee equity incentive plans
|
71.7
|
|
|
52.6
|
|
|
46.4
|
|
|||
Payments for taxes related to net share settlement of equity awards
|
(33.2
|
)
|
|
(43.7
|
)
|
|
(21.4
|
)
|
|||
Payment of deferred consideration related to prior year business acquisition
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
(773.9
|
)
|
|
1,245.6
|
|
|
(386.0
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(1,544.2
|
)
|
|
1,763.7
|
|
|
10.2
|
|
|||
Cash, cash equivalents, and restricted cash—beginning of period
|
2,509.2
|
|
|
745.5
|
|
|
735.3
|
|
|||
Cash, cash equivalents, and restricted cash—end of period
|
$
|
965.0
|
|
|
$
|
2,509.2
|
|
|
$
|
745.5
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
|
|
|
|
|
|
||||||
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
961.4
|
|
|
$
|
2,506.9
|
|
|
$
|
744.3
|
|
Restricted cash included in prepaid expenses and other current assets
|
1.9
|
|
|
1.1
|
|
|
0.6
|
|
|||
Restricted cash included in other assets
|
1.7
|
|
|
1.2
|
|
|
0.6
|
|
|||
Total cash, cash equivalents, and restricted cash
|
$
|
965.0
|
|
|
$
|
2,509.2
|
|
|
$
|
745.5
|
|
|
|
|
|
|
|
||||||
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Equity consideration for business acquisitions
|
$
|
(229.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Property and equipment acquired through lease incentives
|
$
|
—
|
|
|
$
|
37.8
|
|
|
$
|
—
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
22.0
|
|
|
$
|
11.2
|
|
|
$
|
9.0
|
|
Cash paid for contractual interest
|
$
|
13.5
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
•
|
Identification of the contract, or contracts, with a customer.
|
•
|
Identification of the performance obligations in the contract.
|
•
|
Determination of the transaction price.
|
•
|
Allocation of the transaction price to the performance obligations in the contract.
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation.
|
|
Year Ended July 31, 2018
|
|
Year Ended July 31, 2017
|
||||||||||||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||||||||
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product revenue
|
$
|
871.5
|
|
|
$
|
8.3
|
|
|
$
|
879.8
|
|
|
$
|
709.1
|
|
|
$
|
(0.6
|
)
|
|
$
|
708.5
|
|
Subscription and support revenue
|
1,401.6
|
|
|
(7.8
|
)
|
|
1,393.8
|
|
|
1,052.5
|
|
|
(5.9
|
)
|
|
1,046.6
|
|
||||||
Total revenue
|
2,273.1
|
|
|
0.5
|
|
|
2,273.6
|
|
|
1,761.6
|
|
|
(6.5
|
)
|
|
1,755.1
|
|
||||||
Total cost of revenue
|
645.3
|
|
|
(0.2
|
)
|
|
645.1
|
|
|
476.6
|
|
|
(0.2
|
)
|
|
476.4
|
|
||||||
Total operating expenses
|
1,756.9
|
|
|
(24.2
|
)
|
|
1,732.7
|
|
|
1,464.8
|
|
|
(20.3
|
)
|
|
1,444.5
|
|
||||||
Operating loss
|
(129.1
|
)
|
|
24.9
|
|
|
(104.2
|
)
|
|
(179.8
|
)
|
|
14.0
|
|
|
(165.8
|
)
|
||||||
Provision for income taxes
|
17.7
|
|
|
(0.8
|
)
|
|
16.9
|
|
|
22.5
|
|
|
0.4
|
|
|
22.9
|
|
||||||
Net loss
|
$
|
(147.9
|
)
|
|
$
|
25.7
|
|
|
$
|
(122.2
|
)
|
|
$
|
(216.6
|
)
|
|
$
|
13.6
|
|
|
$
|
(203.0
|
)
|
Net loss per share, basic and diluted
|
$
|
(1.61
|
)
|
|
$
|
0.28
|
|
|
$
|
(1.33
|
)
|
|
$
|
(2.39
|
)
|
|
$
|
0.15
|
|
|
$
|
(2.24
|
)
|
|
July 31, 2018
|
||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Consolidated Balance Sheet
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
467.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
467.0
|
|
Prepaid expenses and other current assets
|
261.3
|
|
|
6.8
|
|
|
268.1
|
|
|||
Other assets
|
206.8
|
|
|
119.4
|
|
|
326.2
|
|
|||
Accrued and other liabilities
|
107.0
|
|
|
17.6
|
|
|
124.6
|
|
|||
Deferred revenue
|
1,268.9
|
|
|
(55.3
|
)
|
|
1,213.6
|
|
|||
Long-term deferred revenue
|
1,096.0
|
|
|
(30.3
|
)
|
|
1,065.7
|
|
|||
Accumulated deficit
|
$
|
(984.6
|
)
|
|
$
|
193.9
|
|
|
$
|
(790.7
|
)
|
|
Years Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Americas
|
|
|
|
|
|
||||||
United States
|
$
|
1,830.3
|
|
|
$
|
1,446.7
|
|
|
$
|
1,149.7
|
|
Other Americas
|
152.0
|
|
|
112.0
|
|
|
80.9
|
|
|||
Total Americas
|
1,982.3
|
|
|
1,558.7
|
|
|
1,230.6
|
|
|||
Europe, the Middle East, and Africa (“EMEA”)
|
564.8
|
|
|
439.6
|
|
|
320.3
|
|
|||
Asia Pacific and Japan (“APAC”)
|
352.5
|
|
|
275.3
|
|
|
204.2
|
|
|||
Total revenue
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
|
Years Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
1,096.2
|
|
|
$
|
879.8
|
|
|
$
|
708.5
|
|
Subscription and support
|
|
|
|
|
|
||||||
Subscription
|
1,032.7
|
|
|
758.1
|
|
|
548.8
|
|
|||
Support
|
770.7
|
|
|
635.7
|
|
|
497.8
|
|
|||
Total subscription and support
|
1,803.4
|
|
|
1,393.8
|
|
|
1,046.6
|
|
|||
Total revenue
|
$
|
2,899.6
|
|
|
$
|
2,273.6
|
|
|
$
|
1,755.1
|
|
•
|
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, 2019
|
|
July 31, 2018
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
369.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
369.1
|
|
|
$
|
1,512.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,512.3
|
|
Certificates of deposit
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Commercial paper
|
|
—
|
|
|
19.3
|
|
|
—
|
|
|
19.3
|
|
|
—
|
|
|
52.0
|
|
|
—
|
|
|
52.0
|
|
||||||||
U.S. government and agency securities
|
|
—
|
|
|
54.4
|
|
|
—
|
|
|
54.4
|
|
|
—
|
|
|
397.3
|
|
|
—
|
|
|
397.3
|
|
||||||||
Total cash equivalents
|
|
369.1
|
|
|
85.7
|
|
|
—
|
|
|
454.8
|
|
|
1,512.3
|
|
|
449.3
|
|
|
—
|
|
|
1,961.6
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Certificates of deposit
|
|
—
|
|
|
17.5
|
|
|
—
|
|
|
17.5
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
|
5.4
|
|
||||||||
Non-U.S. government securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
||||||||
Commercial paper
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
22.3
|
|
|
—
|
|
|
22.3
|
|
||||||||
Corporate debt securities
|
|
—
|
|
|
375.5
|
|
|
—
|
|
|
375.5
|
|
|
—
|
|
|
139.8
|
|
|
—
|
|
|
139.8
|
|
||||||||
U.S. government and agency securities
|
|
—
|
|
|
1,439.8
|
|
|
—
|
|
|
1,439.8
|
|
|
—
|
|
|
709.0
|
|
|
—
|
|
|
709.0
|
|
||||||||
Total short-term investments
|
|
—
|
|
|
1,841.7
|
|
|
—
|
|
|
1,841.7
|
|
|
—
|
|
|
896.5
|
|
|
—
|
|
|
896.5
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt securities
|
|
—
|
|
|
214.3
|
|
|
—
|
|
|
214.3
|
|
|
—
|
|
|
153.6
|
|
|
—
|
|
|
153.6
|
|
||||||||
U.S. government and agency securities
|
|
—
|
|
|
361.1
|
|
|
—
|
|
|
361.1
|
|
|
—
|
|
|
393.9
|
|
|
—
|
|
|
393.9
|
|
||||||||
Total long-term investments
|
|
—
|
|
|
575.4
|
|
|
—
|
|
|
575.4
|
|
|
—
|
|
|
547.5
|
|
|
—
|
|
|
547.5
|
|
||||||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency forward contracts
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total prepaid expenses and other current assets
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets measured at fair value
|
|
$
|
369.1
|
|
|
$
|
2,504.1
|
|
|
$
|
—
|
|
|
$
|
2,873.2
|
|
|
$
|
1,512.3
|
|
|
$
|
1,893.3
|
|
|
$
|
—
|
|
|
$
|
3,405.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Accrued and other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
Total accrued and other liabilities
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
6.9
|
|
||||||||
Total liabilities measured at fair value
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
|
July 31, 2019
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.0
|
|
Commercial paper
|
19.3
|
|
|
—
|
|
|
—
|
|
|
19.3
|
|
||||
U.S. government and agency securities
|
54.4
|
|
|
—
|
|
|
—
|
|
|
54.4
|
|
||||
Total available-for-sale cash equivalents
|
$
|
85.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85.7
|
|
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
17.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.5
|
|
Commercial paper
|
8.9
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
||||
Corporate debt securities
|
587.8
|
|
|
2.3
|
|
|
(0.3
|
)
|
|
589.8
|
|
||||
U.S. government and agency securities
|
1,799.5
|
|
|
2.6
|
|
|
(1.2
|
)
|
|
1,800.9
|
|
||||
Total available-for-sale investments
|
$
|
2,413.7
|
|
|
$
|
4.9
|
|
|
$
|
(1.5
|
)
|
|
$
|
2,417.1
|
|
|
July 31, 2018
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
52.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52.0
|
|
U.S. government and agency securities
|
397.3
|
|
|
—
|
|
|
—
|
|
|
397.3
|
|
||||
Total available-for-sale cash equivalents
|
$
|
449.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
449.3
|
|
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
5.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
Non-U.S. government securities
|
20.0
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
||||
Commercial paper
|
22.3
|
|
|
—
|
|
|
—
|
|
|
22.3
|
|
||||
Corporate debt securities
|
295.9
|
|
|
—
|
|
|
(2.5
|
)
|
|
293.4
|
|
||||
U.S. government and agency securities
|
1,110.6
|
|
|
—
|
|
|
(7.7
|
)
|
|
1,102.9
|
|
||||
Total available-for-sale investments
|
$
|
1,454.2
|
|
|
$
|
—
|
|
|
$
|
(10.2
|
)
|
|
$
|
1,444.0
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due within one year
|
$
|
1,926.7
|
|
|
$
|
1,927.4
|
|
Due between one and three years
|
572.7
|
|
|
575.4
|
|
||
Total
|
$
|
2,499.4
|
|
|
$
|
2,502.8
|
|
|
Amount
|
||
Cash
|
$
|
375.4
|
|
Fair value of replacement equity awards
|
2.7
|
|
|
Total purchase consideration
|
$
|
378.1
|
|
|
Amount
|
||
Goodwill
|
$
|
300.6
|
|
Identified intangible assets
|
54.1
|
|
|
Cash and cash equivalents
|
14.0
|
|
|
Net assets acquired
|
9.4
|
|
|
Total
|
$
|
378.1
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
51.5
|
|
|
7 years
|
Customer relationships
|
2.6
|
|
|
8 years
|
|
Total
|
$
|
54.1
|
|
|
|
|
Amount
|
||
Cash
|
$
|
35.9
|
|
Fair value of replacement equity awards
|
0.9
|
|
|
Total purchase consideration
|
$
|
36.8
|
|
|
Amount
|
||
Goodwill
|
$
|
24.4
|
|
Identified intangible assets
|
7.4
|
|
|
Cash
|
4.0
|
|
|
Net assets acquired
|
1.0
|
|
|
Total
|
$
|
36.8
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
7.4
|
|
|
5 years
|
Total
|
$
|
7.4
|
|
|
|
|
Amount
|
||
Cash
|
$
|
250.0
|
|
Common stock (0.9 million shares)
|
214.7
|
|
|
Fair value of replacement equity awards
|
9.5
|
|
|
Total purchase consideration
|
$
|
474.2
|
|
|
Amount
|
||
Goodwill
|
$
|
387.8
|
|
Identified intangible assets
|
76.3
|
|
|
Cash
|
25.9
|
|
|
Net liabilities assumed
|
(15.8
|
)
|
|
Total
|
$
|
474.2
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
56.6
|
|
|
6 years
|
Customer relationships
|
19.7
|
|
|
6 years
|
|
Total
|
$
|
76.3
|
|
|
|
|
Amount
|
||
Goodwill
|
$
|
113.6
|
|
Identified intangible assets
|
54.8
|
|
|
Net liabilities assumed
|
(10.2
|
)
|
|
Total
|
$
|
158.2
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
48.6
|
|
|
4 years
|
Customer relationships
|
5.3
|
|
|
8 years
|
|
Trade name and trademarks
|
0.9
|
|
|
6 months
|
|
Total
|
$
|
54.8
|
|
|
|
|
Amount
|
||
Goodwill
|
$
|
209.8
|
|
Identified intangible assets
|
85.1
|
|
|
Net liabilities assumed
|
(2.0
|
)
|
|
Total
|
$
|
292.9
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
68.4
|
|
|
4.5 years
|
Trade name and trademarks
|
8.5
|
|
|
1 year
|
|
Customer relationships
|
8.2
|
|
|
8 years
|
|
Total
|
$
|
85.1
|
|
|
|
|
Amount
|
||
Goodwill
|
$
|
68.6
|
|
Identified intangible assets
|
17.3
|
|
|
Net liabilities assumed
|
(3.2
|
)
|
|
Total
|
$
|
82.7
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
16.4
|
|
|
5 years
|
Customer relationships
|
0.9
|
|
|
2 years
|
|
Total
|
$
|
17.3
|
|
|
|
|
Amount
|
||
Cash
|
$
|
12.4
|
|
Goodwill
|
75.3
|
|
|
Identified intangible assets
|
19.5
|
|
|
Net liabilities assumed
|
(4.1
|
)
|
|
Total
|
$
|
103.1
|
|
|
Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
16.6
|
|
|
8 years
|
Customer relationships
|
2.9
|
|
|
8 years
|
|
Total
|
$
|
19.5
|
|
|
|
|
Amount
|
||
Balance as of July 31, 2018
|
$
|
522.8
|
|
Goodwill acquired
|
829.5
|
|
|
Balance as of July 31, 2019
|
$
|
1,352.3
|
|
|
July 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
318.8
|
|
|
$
|
(78.7
|
)
|
|
$
|
240.1
|
|
|
$
|
154.7
|
|
|
$
|
(38.2
|
)
|
|
$
|
116.5
|
|
Customer relationships
|
39.8
|
|
|
(4.7
|
)
|
|
35.1
|
|
|
12.2
|
|
|
(1.2
|
)
|
|
11.0
|
|
||||||
Acquired intellectual property
|
8.9
|
|
|
(5.1
|
)
|
|
3.8
|
|
|
8.9
|
|
|
(4.5
|
)
|
|
4.4
|
|
||||||
Trade name and trademarks
|
9.4
|
|
|
(9.4
|
)
|
|
—
|
|
|
8.5
|
|
|
(0.4
|
)
|
|
8.1
|
|
||||||
Other
|
2.2
|
|
|
(2.2
|
)
|
|
—
|
|
|
2.2
|
|
|
(2.2
|
)
|
|
—
|
|
||||||
Total intangible assets subject to amortization
|
379.1
|
|
|
(100.1
|
)
|
|
279.0
|
|
|
186.5
|
|
|
(46.5
|
)
|
|
140.0
|
|
||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-process research and development
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||||
Total purchased intangible assets
|
$
|
380.7
|
|
|
$
|
(100.1
|
)
|
|
$
|
280.6
|
|
|
$
|
187.3
|
|
|
$
|
(46.5
|
)
|
|
$
|
140.8
|
|
|
Amount
|
||
Years ending July 31:
|
|
||
2020
|
$
|
66.1
|
|
2021
|
64.1
|
|
|
2022
|
59.6
|
|
|
2023
|
33.6
|
|
|
2024
|
26.1
|
|
|
2025 and thereafter
|
29.5
|
|
|
Total future amortization expense
|
$
|
279.0
|
|
|
July 31, 2019
|
|
July 31, 2018
|
||||
Short-term deferred contract costs
|
$
|
151.1
|
|
|
$
|
113.2
|
|
Long-term deferred contract costs
|
324.2
|
|
|
224.8
|
|
||
Total deferred contract costs
|
$
|
475.3
|
|
|
$
|
338.0
|
|
|
July 31,
|
||||||
|
2019
|
|
2018
|
||||
Computers, equipment, and software
|
$
|
264.1
|
|
|
$
|
217.9
|
|
Leasehold improvements
|
204.8
|
|
|
159.5
|
|
||
Demonstration units
|
40.7
|
|
|
33.0
|
|
||
Furniture and fixtures
|
30.6
|
|
|
24.6
|
|
||
Total property and equipment
|
540.2
|
|
|
435.0
|
|
||
Less: accumulated depreciation
|
(244.2
|
)
|
|
(161.9
|
)
|
||
Total property and equipment, net
|
$
|
296.0
|
|
|
$
|
273.1
|
|
|
Conversion Rate per $1,000 Principal
|
|
Initial Conversion Price
|
|
Convertible Date
|
|
Initial Number of Shares
|
||||
2019 Notes
|
9.0680
|
|
|
$
|
110.28
|
|
|
January 1, 2019
|
|
5.2
|
|
2023 Notes
|
3.7545
|
|
|
$
|
266.35
|
|
|
April 1, 2023
|
|
6.4
|
|
•
|
during any fiscal quarter commencing after the fiscal quarters ending on October 31, 2014 and October 31, 2018, for the 2019 Notes and 2023 Notes, respectively (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days
|
•
|
during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate for the respective Notes on each such trading day; or
|
•
|
upon the occurrence of specified corporate events.
|
|
Year Ended
|
||
|
July 31, 2019
|
||
2019 Notes principal early converted and repaid in cash:
|
|
||
Allocated to liability component(1)
|
$
|
403.4
|
|
Allocated to equity component(2)
|
12.2
|
|
|
Total principal early converted and repaid in cash
|
$
|
415.6
|
|
Loss on early conversions of convertible senior notes(3)
|
$
|
2.6
|
|
(1)
|
Recorded as a reduction to convertible senior notes, net in our consolidated balance sheets and calculated by measuring the fair value of a similar liability that did not have an associated convertible feature.
|
(2)
|
Recorded as a reduction to additional paid-in capital in our consolidated balance sheets.
|
(3)
|
Represents the difference between the cash consideration allocated to the liability component and the net carrying amount of the liability component on the respective settlement dates. The amount is included in other income, net in our consolidated statement of operations.
|
|
July 31, 2019
|
|
July 31, 2018
|
||||||||||||||||||||
|
2019 Notes
|
|
2023 Notes
|
|
Total
|
|
2019 Notes
|
|
2023 Notes
|
|
Total
|
||||||||||||
Liability component:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal
|
$
|
—
|
|
|
$
|
1,693.0
|
|
|
$
|
1,693.0
|
|
|
$
|
575.0
|
|
|
$
|
1,693.0
|
|
|
$
|
2,268.0
|
|
Less: debt discount and debt issuance costs, net of amortization
|
—
|
|
|
263.0
|
|
|
263.0
|
|
|
24.6
|
|
|
323.3
|
|
|
347.9
|
|
||||||
Net carrying amount
|
$
|
—
|
|
|
$
|
1,430.0
|
|
|
$
|
1,430.0
|
|
|
$
|
550.4
|
|
|
$
|
1,369.7
|
|
|
$
|
1,920.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity component (including amounts classified as temporary equity)
|
$
|
—
|
|
|
$
|
315.0
|
|
|
$
|
315.0
|
|
|
$
|
109.8
|
|
|
$
|
315.0
|
|
|
$
|
424.8
|
|
|
Year Ended July 31, 2019
|
|
Year Ended July 31, 2018
|
|
Year Ended July 31, 2017
|
||||||||||||||||||||||||||||||
|
2019 Notes
|
|
2023 Notes
|
|
Total
|
|
2019 Notes
|
|
2023 Notes
|
|
Total
|
|
2019 Notes
|
|
2023 Notes
|
|
Total
|
||||||||||||||||||
Contractual interest expense
|
$
|
—
|
|
|
$
|
12.7
|
|
|
$
|
12.7
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of debt discount
|
8.7
|
|
|
58.5
|
|
|
67.2
|
|
|
22.9
|
|
|
3.0
|
|
|
25.9
|
|
|
22.0
|
|
|
—
|
|
|
22.0
|
|
|||||||||
Amortization of debt issuance costs
|
1.1
|
|
|
1.9
|
|
|
3.0
|
|
|
2.8
|
|
|
0.1
|
|
|
2.9
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|||||||||
Total interest expense recognized
|
$
|
9.8
|
|
|
$
|
73.1
|
|
|
$
|
82.9
|
|
|
$
|
25.7
|
|
|
$
|
3.8
|
|
|
$
|
29.5
|
|
|
$
|
24.5
|
|
|
$
|
—
|
|
|
$
|
24.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Effective interest rate of the liability component
|
4.8
|
%
|
|
5.2
|
%
|
|
|
|
4.8
|
%
|
|
5.2
|
%
|
|
|
|
4.8
|
%
|
|
—
|
%
|
|
|
|
Initial Number of Shares
|
|
Aggregate Purchase
|
|||
2019 Note Hedges
|
5.2
|
|
|
$
|
111.0
|
|
2023 Note Hedges
|
6.4
|
|
|
$
|
332.0
|
|
|
Initial Number of Shares
|
|
Strike Price per Share
|
|
Aggregate Proceeds
|
|||||
2019 Warrants
|
5.2
|
|
|
$
|
137.85
|
|
|
$
|
78.3
|
|
2023 Warrants
|
6.4
|
|
|
$
|
417.80
|
|
|
$
|
145.4
|
|
|
Amount
|
||
Years ending July 31:
|
|
||
2020
|
$
|
74.1
|
|
2021
|
67.2
|
|
|
2022
|
62.9
|
|
|
2023
|
60.2
|
|
|
2024
|
45.5
|
|
|
2025 and thereafter
|
181.9
|
|
|
Committed gross lease payments
|
491.8
|
|
|
Less: proceeds from sublease rentals
|
9.8
|
|
|
Net operating lease obligation
|
$
|
482.0
|
|
|
Amount
|
||
Fiscal years ending July 31:
|
|
||
2020
|
$
|
10.0
|
|
2021
|
30.1
|
|
|
2022
|
55.8
|
|
|
2023
|
57.5
|
|
|
2024
|
67.5
|
|
|
2025 and thereafter
|
97.5
|
|
|
Total other purchase commitments
|
$
|
318.4
|
|
|
Stock Options Outstanding
|
|
PSOs Outstanding
|
||||||||||||||||||||||
|
Number of Shares
|
|
Weighted-Average Exercise Price Per Share
|
|
Weighted-Average Remaining Contractual Term
(Years) |
|
Aggregate Intrinsic Value
|
|
Number of Shares
|
|
Weighted-Average Exercise Price Per Share
|
|
Weighted-Average Remaining Contractual Term
(Years) |
|
Aggregate Intrinsic Value
|
||||||||||
Balance—July 31, 2016
|
2.1
|
|
|
$
|
13.42
|
|
|
5.2
|
|
$
|
244.9
|
|
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Exercised
|
(0.5
|
)
|
|
$
|
14.44
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Balance—July 31, 2017
|
1.6
|
|
|
$
|
13.11
|
|
|
4.2
|
|
$
|
190.6
|
|
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
1.2
|
|
|
$
|
198.50
|
|
|
|
|
|
||||
Exercised
|
(0.6
|
)
|
|
$
|
12.76
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Balance—July 31, 2018
|
1.0
|
|
|
$
|
13.28
|
|
|
3.1
|
|
$
|
199.8
|
|
|
1.2
|
|
|
$
|
198.50
|
|
|
7.0
|
|
$
|
—
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
2.6
|
|
|
$
|
191.97
|
|
|
|
|
|
||||
Exercised
|
(0.7
|
)
|
|
$
|
12.61
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Forfeited
|
—
|
|
|
$
|
1.24
|
|
|
|
|
|
|
(0.1
|
)
|
|
$
|
193.51
|
|
|
|
|
|
||||
Balance—July 31, 2019
|
0.3
|
|
|
$
|
14.53
|
|
|
2.2
|
|
$
|
81.4
|
|
|
3.7
|
|
|
$
|
193.99
|
|
|
6.2
|
|
$
|
120.1
|
|
Exercisable—July 31, 2019
|
0.3
|
|
|
$
|
14.53
|
|
|
2.2
|
|
$
|
81.4
|
|
|
3.7
|
|
|
$
|
193.99
|
|
|
6.2
|
|
$
|
120.1
|
|
|
RSAs Outstanding
|
|
PSAs Outstanding
|
||||||||||
|
Number
of Shares |
|
Weighted-
Average Grant-Date Fair Value Per Share |
|
Number
of Shares |
|
Weighted-
Average Grant-Date Fair Value Per Share |
||||||
Balance—July 31, 2016
|
1.1
|
|
|
$
|
170.97
|
|
|
—
|
|
|
$
|
—
|
|
Granted(1)
|
0.1
|
|
|
$
|
148.54
|
|
|
0.2
|
|
|
$
|
148.54
|
|
Vested
|
(0.4
|
)
|
|
$
|
170.97
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Balance—July 31, 2017
|
0.8
|
|
|
$
|
166.86
|
|
|
0.2
|
|
|
$
|
148.54
|
|
Granted(1)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Vested
|
(0.5
|
)
|
|
$
|
169.38
|
|
|
—
|
|
|
$
|
148.54
|
|
Forfeited
|
(0.1
|
)
|
|
$
|
166.05
|
|
|
(0.1
|
)
|
|
$
|
148.54
|
|
Balance—July 31, 2018
|
0.2
|
|
|
$
|
163.14
|
|
|
0.1
|
|
|
$
|
148.54
|
|
Granted(1)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Vested
|
(0.2
|
)
|
|
$
|
166.83
|
|
|
—
|
|
|
$
|
148.54
|
|
Forfeited
|
—
|
|
|
$
|
152.09
|
|
|
—
|
|
|
$
|
148.54
|
|
Balance—July 31, 2019
|
—
|
|
|
$
|
148.54
|
|
|
0.1
|
|
|
$
|
148.54
|
|
(1)
|
For PSAs, shares granted represents the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms.
|
|
RSUs Outstanding
|
|
PSUs Outstanding
|
||||||||||||||||||||||
|
Number
of Shares |
|
Weighted-
Average Grant-Date Fair Value Per Share |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
|
Number
of Shares |
|
Weighted-
Average Grant-Date Fair Value Per Share |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
||||||||||
Balance—July 31, 2016
|
6.5
|
|
|
$
|
130.14
|
|
|
1.1
|
|
$
|
852.7
|
|
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
Granted
|
3.9
|
|
|
$
|
141.35
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Vested
|
(3.3
|
)
|
|
$
|
119.88
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Forfeited
|
(0.6
|
)
|
|
$
|
139.56
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Balance—July 31, 2017
|
6.5
|
|
|
$
|
141.16
|
|
|
1.3
|
|
$
|
854.1
|
|
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
Granted(1)
|
3.9
|
|
|
$
|
171.74
|
|
|
|
|
|
|
0.2
|
|
|
$
|
149.73
|
|
|
|
|
|
||||
Vested
|
(3.3
|
)
|
|
$
|
138.93
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Forfeited
|
(0.6
|
)
|
|
$
|
144.33
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Balance—July 31, 2018
|
6.5
|
|
|
$
|
160.70
|
|
|
1.6
|
|
$
|
1,291.4
|
|
|
0.2
|
|
|
$
|
149.73
|
|
|
1.4
|
|
$
|
43.7
|
|
Granted(1)(2)
|
3.9
|
|
|
$
|
210.14
|
|
|
|
|
|
|
0.2
|
|
|
$
|
215.64
|
|
|
|
|
|
||||
Vested(3)
|
(2.7
|
)
|
|
$
|
160.87
|
|
|
|
|
|
|
(0.1
|
)
|
|
$
|
149.73
|
|
|
|
|
|
||||
Forfeited
|
(0.8
|
)
|
|
$
|
162.73
|
|
|
|
|
|
|
—
|
|
|
$
|
155.38
|
|
|
|
|
|
||||
Balance—July 31, 2019
|
6.9
|
|
|
$
|
188.16
|
|
|
1.5
|
|
$
|
1,554.0
|
|
|
0.3
|
|
|
$
|
197.86
|
|
|
1.8
|
|
$
|
67.0
|
|
(1)
|
For PSUs, shares granted represent the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms.
|
(2)
|
Includes 0.4 million RSUs assumed and 0.1 million replacement RSUs granted in connection with the acquisitions of RedLock, Demisto, PureSec, and Twistlock, with weighted-average grant-date fair values of $218.69 and $224.31 per share, respectively.
|
(3)
|
Includes time-based vesting for PSUs granted during the year ended July 31, 2018.
|
|
Number of shares
|
|
Balance—July 31, 2018
|
8.8
|
|
Authorized
|
4.6
|
|
PSOs, RSUs, and PSUs granted
|
(6.7
|
)
|
Options, PSOs, RSAs, PSAs, RSUs, and PSUs forfeited
|
1.0
|
|
Shares withheld for taxes
|
0.1
|
|
Balance—July 31, 2019
|
7.8
|
|
|
Year Ended July 31,
|
||||||
|
2019
|
|
2018
|
||||
Volatility
|
35.6% - 36.5%
|
|
|
33.3
|
%
|
||
Dividend yield
|
—
|
%
|
|
—
|
%
|
||
Risk-free interest rate
|
3.1% - 3.2%
|
|
|
2.9
|
%
|
||
Weighted-average grant-date fair value per share
|
$
|
59.11
|
|
|
$
|
56.14
|
|
|
Year Ended July 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Volatility
|
30.0% - 34.5%
|
|
|
26.8% - 43.6%
|
|
|
41.0% - 50.1%
|
|
Expected term (in years)
|
0.5 - 2.0
|
|
|
0.5 - 2.0
|
|
|
0.5
|
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk-free interest rate
|
2.3% - 2.6%
|
|
|
1.2% - 2.3%
|
|
|
0.5% - 0.9%
|
|
Grant-date fair value per share
|
$55.03 - $87.04
|
|
|
$34.94 - $65.04
|
|
|
$34.15 - $39.65
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of product revenue
|
$
|
5.6
|
|
|
$
|
7.0
|
|
|
$
|
7.3
|
|
Cost of subscription and support revenue
|
71.3
|
|
|
66.7
|
|
|
56.2
|
|
|||
Research and development
|
186.8
|
|
|
145.2
|
|
|
152.6
|
|
|||
Sales and marketing
|
221.9
|
|
|
208.0
|
|
|
186.5
|
|
|||
General and administrative
|
102.1
|
|
|
77.0
|
|
|
73.1
|
|
|||
Total share-based compensation
|
$
|
587.7
|
|
|
$
|
503.9
|
|
|
$
|
475.7
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
United States
|
$
|
(198.1
|
)
|
|
$
|
(181.1
|
)
|
|
$
|
(205.8
|
)
|
Foreign
|
123.5
|
|
|
75.8
|
|
|
25.7
|
|
|||
Total
|
$
|
(74.6
|
)
|
|
$
|
(105.3
|
)
|
|
$
|
(180.1
|
)
|
|
July 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
(As Adjusted)
|
||||
Deferred tax assets:
|
|
|
|
||||
Accruals and reserves
|
$
|
53.3
|
|
|
$
|
59.6
|
|
Deferred revenue
|
212.8
|
|
|
128.0
|
|
||
Net operating loss carryforwards
|
269.9
|
|
|
189.5
|
|
||
Research and development and foreign tax credits
|
143.3
|
|
|
113.4
|
|
||
Share-based compensation
|
25.9
|
|
|
21.4
|
|
||
Gross deferred tax assets
|
705.2
|
|
|
511.9
|
|
||
Valuation allowance
|
(561.9
|
)
|
|
(388.0
|
)
|
||
Total deferred tax assets
|
143.3
|
|
|
123.9
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets and intangible assets
|
(26.0
|
)
|
|
(43.3
|
)
|
||
Deferred commissions
|
(94.6
|
)
|
|
(54.4
|
)
|
||
Other deferred tax liabilities
|
(15.7
|
)
|
|
(17.7
|
)
|
||
Total deferred tax liabilities
|
(136.3
|
)
|
|
(115.4
|
)
|
||
Total
|
$
|
7.0
|
|
|
$
|
8.5
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Unrecognized tax benefits at the beginning of the period
|
$
|
337.7
|
|
|
$
|
301.3
|
|
|
$
|
127.7
|
|
Additions for tax positions taken in prior years
|
0.3
|
|
|
3.1
|
|
|
3.1
|
|
|||
Reductions for tax positions taken in prior years
|
(33.4
|
)
|
|
(6.3
|
)
|
|
—
|
|
|||
Additions for tax positions taken in the current year
|
9.9
|
|
|
39.6
|
|
|
170.5
|
|
|||
Unrecognized tax benefits at the end of the period
|
$
|
314.5
|
|
|
$
|
337.7
|
|
|
$
|
301.3
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||
Net loss
|
$
|
(81.9
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(203.0
|
)
|
Weighted-average shares used to compute net loss per share, basic and diluted
|
94.5
|
|
|
91.7
|
|
|
90.6
|
|
|||
Net loss per share, basic and diluted
|
$
|
(0.87
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
(2.24
|
)
|
|
Year Ended July 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Convertible senior notes
|
6.4
|
|
|
11.6
|
|
|
5.2
|
|
Warrants related to the issuance of convertible senior notes
|
11.6
|
|
|
11.6
|
|
|
5.2
|
|
RSUs and PSUs
|
7.2
|
|
|
6.7
|
|
|
6.5
|
|
Options to purchase common stock, including PSOs
|
4.0
|
|
|
2.2
|
|
|
1.6
|
|
RSAs and PSAs
|
0.1
|
|
|
0.3
|
|
|
1.0
|
|
ESPP shares
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
Total
|
29.5
|
|
|
32.6
|
|
|
19.7
|
|
|
Year Ended July 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest income
|
$
|
69.8
|
|
|
$
|
27.1
|
|
|
$
|
14.7
|
|
Foreign currency exchange gains (losses), net
|
(3.5
|
)
|
|
1.7
|
|
|
(3.4
|
)
|
|||
Other
|
(2.9
|
)
|
|
(0.3
|
)
|
|
(1.1
|
)
|
|||
Total other income, net
|
$
|
63.4
|
|
|
$
|
28.5
|
|
|
$
|
10.2
|
|
|
Year Ended July 31,
|
||||||
|
2019
|
|
2018
|
||||
Property and equipment, net:
|
|
|
|
||||
United States
|
$
|
240.5
|
|
|
$
|
228.4
|
|
International
|
55.5
|
|
|
44.7
|
|
||
Total property and equipment, net
|
$
|
296.0
|
|
|
$
|
273.1
|
|
|
Three Months Ended
|
||||||||||||||
|
October 31,
2018
|
|
January 31,
2019
|
|
April 30,
2019
|
|
July 31,
2019
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
240.5
|
|
|
$
|
271.6
|
|
|
$
|
278.4
|
|
|
$
|
305.7
|
|
Subscription and support
|
415.5
|
|
|
439.6
|
|
|
448.2
|
|
|
500.1
|
|
||||
Total revenue
|
656.0
|
|
|
711.2
|
|
|
726.6
|
|
|
805.8
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
73.2
|
|
|
82.5
|
|
|
78.0
|
|
|
82.2
|
|
||||
Subscription and support
|
110.3
|
|
|
120.1
|
|
|
126.9
|
|
|
135.2
|
|
||||
Total cost of revenue
|
183.5
|
|
|
202.6
|
|
|
204.9
|
|
|
217.4
|
|
||||
Total gross profit
|
472.5
|
|
|
508.6
|
|
|
521.7
|
|
|
588.4
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
113.4
|
|
|
128.3
|
|
|
139.1
|
|
|
158.7
|
|
||||
Sales and marketing
|
314.6
|
|
|
320.0
|
|
|
339.0
|
|
|
370.4
|
|
||||
General and administrative
|
76.6
|
|
|
53.7
|
|
|
62.3
|
|
|
69.2
|
|
||||
Total operating expenses
|
504.6
|
|
|
502.0
|
|
|
540.4
|
|
|
598.3
|
|
||||
Operating income (loss)
|
(32.1
|
)
|
|
6.6
|
|
|
(18.7
|
)
|
|
(9.9
|
)
|
||||
Interest expense
|
(22.7
|
)
|
|
(20.6
|
)
|
|
(20.6
|
)
|
|
(20.0
|
)
|
||||
Other income, net
|
13.0
|
|
|
16.0
|
|
|
18.2
|
|
|
16.2
|
|
||||
Income (loss) before income taxes
|
(41.8
|
)
|
|
2.0
|
|
|
(21.1
|
)
|
|
(13.7
|
)
|
||||
Provision for (benefit from) income taxes
|
(3.5
|
)
|
|
4.6
|
|
|
(0.9
|
)
|
|
7.1
|
|
||||
Net loss
|
$
|
(38.3
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(20.2
|
)
|
|
$
|
(20.8
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.41
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.22
|
)
|
|
Three Months Ended
|
||||||||||||||
|
October 31,
2017
|
|
January 31,
2018
|
|
April 30,
2018
|
|
July 31,
2018
|
||||||||
|
(As Adjusted)
|
|
(As Adjusted)
|
|
(As Adjusted)
|
|
(As Adjusted)
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
184.8
|
|
|
$
|
204.8
|
|
|
$
|
218.1
|
|
|
$
|
272.1
|
|
Subscription and support
|
317.0
|
|
|
340.8
|
|
|
349.6
|
|
|
386.4
|
|
||||
Total revenue
|
501.8
|
|
|
545.6
|
|
|
567.7
|
|
|
658.5
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Product
|
57.6
|
|
|
63.9
|
|
|
68.9
|
|
|
82.0
|
|
||||
Subscription and support
|
83.7
|
|
|
95.5
|
|
|
91.0
|
|
|
102.5
|
|
||||
Total cost of revenue
|
141.3
|
|
|
159.4
|
|
|
159.9
|
|
|
184.5
|
|
||||
Total gross profit
|
360.5
|
|
|
386.2
|
|
|
407.8
|
|
|
474.0
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
94.2
|
|
|
96.6
|
|
|
99.6
|
|
|
110.3
|
|
||||
Sales and marketing
|
254.1
|
|
|
258.8
|
|
|
271.4
|
|
|
289.9
|
|
||||
General and administrative
|
65.7
|
|
|
53.3
|
|
|
82.1
|
|
|
56.7
|
|
||||
Total operating expenses
|
414.0
|
|
|
408.7
|
|
|
453.1
|
|
|
456.9
|
|
||||
Operating income (loss)
|
(53.5
|
)
|
|
(22.5
|
)
|
|
(45.3
|
)
|
|
17.1
|
|
||||
Interest expense
|
(6.3
|
)
|
|
(6.4
|
)
|
|
(6.5
|
)
|
|
(10.4
|
)
|
||||
Other income, net
|
4.8
|
|
|
4.9
|
|
|
8.6
|
|
|
10.2
|
|
||||
Income (loss) before income taxes
|
(55.0
|
)
|
|
(24.0
|
)
|
|
(43.2
|
)
|
|
16.9
|
|
||||
Provision for (benefit from) income taxes
|
8.2
|
|
|
1.6
|
|
|
(2.8
|
)
|
|
9.9
|
|
||||
Net income (loss)
|
$
|
(63.2
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(40.4
|
)
|
|
$
|
7.0
|
|
Net income (loss) per share, basic
|
$
|
(0.70
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
0.08
|
|
Net income (loss) per share, diluted
|
$
|
(0.70
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
0.07
|
|
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 AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1.
|
Consolidated Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Restated Certificate of Incorporation of the Registrant.
|
|
10-K
|
|
001-35594
|
|
3.1
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Bylaws of the Registrant.
|
|
8-K
|
|
001-35594
|
|
3.1
|
|
September 14, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificate of Change of Location of Registered Agent and/or Registered Office.
|
|
8-K
|
|
001-35594
|
|
3.1
|
|
August 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant to Purchase Stock by Juniper Networks, Inc.
|
|
8-K
|
|
001-35594
|
|
4.1
|
|
June 4, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indenture between the Registrant and U.S. Bank National Association, dated as of June 30, 2014.
|
|
8-K
|
|
001-35594
|
|
4.1
|
|
July 1, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indenture between the Registrant and U.S. Bank National Association, dated as of July 12, 2018.
|
|
8-K
|
|
001-35594
|
|
4.1
|
|
July 13, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Global 0.75% Convertible Senior Note due 2023 (included in Exhibit 4.3).
|
|
8-K
|
|
001-35594
|
|
4.2
|
|
July 13, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description of Registrant’s Securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, as amended.
|
|
10-Q
|
|
001-35594
|
|
10.1
|
|
February 27, 2019
|
|
|
|
|
|
|
|
|
|
|
|
10.4*
|
|
2012 Employee Stock Purchase Plan and related form agreements under 2012 Employee Stock Purchase Plan, as amended and restated.
|
|
10-K
|
|
001-35594
|
|
10.4
|
|
September 7, 2017
|
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
RedLock Inc. 2015 Stock Plan, as amended, and related form agreements under RedLock Inc. 2015 Stock Plan, as amended.
|
|
S-8
|
|
333-227901
|
|
99.1
|
|
October 19, 2018
|
|
|
|
|
|
|
|
|
|
|
|
10.6*
|
|
Demisto, Inc. 2015 Stock Option Plan, as amended.
|
|
S-8
|
|
333-230663
|
|
99.1
|
|
April 1, 2019
|
|
|
|
|
|
|
|
|
|
|
|
10.7*
|
|
Twistlock Ltd. Amended and Restated 2015 Share Option Plan.
|
|
S-8
|
|
333-232672
|
|
99.1
|
|
July 16, 2019
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||||
10.8*
|
|
Employee Incentive Compensation Plan, as amended and restated.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
November 25, 2014
|
|
|
|
|
|
|
|
|
|
|
|
10.9*
|
|
Clawback Policy, adopted as of August 29, 2017.
|
|
10-Q
|
|
001-35594
|
|
10.3
|
|
November 21, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Plan effective December 8, 2017.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
February 27, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Letter Agreement between the Registrant and Nir Zuk, dated December 19, 2011.
|
|
S-1
|
|
333-180620
|
|
10.8
|
|
April 6, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended Offer Letter between the Registrant and René Bonvanie, dated July 10, 2019.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
July 11, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Frank Calderoni, dated February 24, 2016.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
February 25, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Mary Pat McCarthy, dated October 13, 2016.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
October 24, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Sridhar Ramaswamy, dated August 29, 2017.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Kathleen Bonanno, dated November 17, 2017.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
November 20, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Jean Compeau, dated February 22, 2018.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
February 26, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Offer Letter between the Registrant and Mark D. McLaughlin, dated May 31, 2018.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
June 4, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Nikesh Arora, dated May 30, 2018.
|
|
8-K
|
|
001-35594
|
|
10.2
|
|
June 4, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Amit K. Singh, dated October 11, 2018.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
October 15, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Confirmatory Employment Letter between the Registrant and Lee Klarich, dated December 19, 2011.
|
|
10-Q
|
|
001-35594
|
|
10.4
|
|
November 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Lorraine Twohill, dated April 10, 2019.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
April 15, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offer Letter between the Registrant and Rt Hon Sir John Key, dated April 10, 2019.
|
|
8-K
|
|
001-35594
|
|
10.2
|
|
April 15, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 2 to Lease between the Registrant and Santa Clara Office Partners LLC, dated July 2, 2013.
|
|
10-K
|
|
001-35594
|
|
10.17
|
|
September 25, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease between the Registrant and SI 34 LLC, dated September 17, 2012.
|
|
10-K
|
|
001-35594
|
|
10.16
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease between the Registrant and SI 34 LLC, dated September 17, 2012.
|
|
10-K
|
|
001-35594
|
|
10.17
|
|
October 4, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
10.28**
|
|
Amended and Restated Flextronics Manufacturing Services Agreement, by and between the Registrant and Flextronics Telecom Systems Ltd., dated April 1, 2019.
|
|
10-Q
|
|
001-35594
|
|
10.1
|
|
May 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement, Release and Cross-License Agreement, dated May 27, 2014, by and between the Registrant and Juniper Networks, Inc.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
May 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||||
|
Share Purchase Agreement between the Registrant, Cyvera Ltd., Palo Alto Networks Holding B.V., the shareholders of Cyvera Ltd. and Shareholder Representative Services LLC, dated March 22, 2014.
|
|
10-Q
|
|
001-35594
|
|
10.1
|
|
June 3, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 1 to the Share Purchase Agreement between the Registrant, Cyvera Ltd., Palo Alto Networks Holding B.V., the shareholders of Cyvera Ltd. and Shareholder Representative Services LLC, dated April 9, 2014.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
June 3, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Agreement, dated June 24, 2014, by and among the Registrant and J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Citigroup Global Markets Inc., as representatives of the initial purchasers named therein.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
June 26, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Convertible Note Hedge Confirmation.
|
|
8-K
|
|
001-35594
|
|
10.2
|
|
June 26, 2014
|
|
|
|
|
|
|
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|
|
|
|
|
Form of Warrant Confirmation.
|
|
8-K
|
|
001-35594
|
|
10.3
|
|
June 26, 2014
|
|
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|
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|
|
Purchase Agreement, dated July 10, 2018, by and among the Registrant and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the several Initial Purchasers named therein.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
July 13, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Convertible Note Hedge Confirmation.
|
|
8-K
|
|
001-35594
|
|
10.2
|
|
July 13, 2018
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|
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|
|
|
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|
|
|
|
|
|
Form of Warrant Confirmation.
|
|
8-K
|
|
001-35594
|
|
10.3
|
|
July 13, 2018
|
|
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|
|
Lease between the Registrant and Santa Clara Campus Property Owner I LLC, dated May 28, 2015.
|
|
10-K
|
|
001-35594
|
|
10.29
|
|
September 17, 2015
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|
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|
|
|
|
|
|
|
|
|
|
|
Lease between the Registrant and Santa Clara Campus Property Owner I LLC, dated May 28, 2015.
|
|
10-K
|
|
001-35594
|
|
10.30
|
|
September 17, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease between the Registrant and Santa Clara Campus Property Owner I LLC, dated May 28, 2015.
|
|
10-K
|
|
001-35594
|
|
10.31
|
|
September 17, 2015
|
|
|
|
|
|
|
|
|
|
|
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|
|
Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated October 7, 2015.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
October 19, 2015
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|
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|
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|
|
|
|
|
|
|
|
|
Amendment No. 1 to Lease by and between the Registrant and Santa Clara Phase I Property LLC, dated November 9, 2015.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
November 24, 2015
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|
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|
|
|
|
|
|
|
|
|
|
|
Amendment No. 1 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated November 9, 2015.
|
|
10-Q
|
|
001-35594
|
|
10.3
|
|
November 24, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 1 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated September 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.1
|
|
November 22, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 1 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated September 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
November 22, 2016
|
|
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|
|
|
|
|
|
|
|
|
|
|
Amendment No. 2 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated September 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.3
|
|
November 22, 2016
|
|
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|
|
|
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|
|
|
|
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|
|
Amendment No. 2 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated November 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.1
|
|
March 1, 2017
|
|
|
|
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|
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|
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|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||||
|
Amendment No. 2 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated November 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.2
|
|
March 1, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 3 to Lease by and between the Registrant and Santa Clara Campus Property Owner I LLC, dated November 16, 2016.
|
|
10-Q
|
|
001-35594
|
|
10.3
|
|
March 1, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 3 to Lease by and between the Registrant and Santa Clara EFH LLC, dated June 22, 2017.
|
|
10-K
|
|
001-35594
|
|
10.40
|
|
September 7, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 3 to Lease by and between the Registrant and Santa Clara G LLC, dated June 22, 2017.
|
|
10-K
|
|
001-35594
|
|
10.41
|
|
September 7, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 4 to Lease by and between the Registrant and Santa Clara EFH LLC, dated June 22, 2017.
|
|
10-K
|
|
001-35594
|
|
10.42
|
|
September 7, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 4 to Lease by and between the Registrant and Santa Clara Phase III EFH LLC, dated September 29, 2017.
|
|
10-Q
|
|
001-35594
|
|
10.5
|
|
November 21, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 4 to Lease by and between the Registrant and Santa Clara Phase III G LLC, dated September 29, 2017.
|
|
10-Q
|
|
001-35594
|
|
10.6
|
|
November 21, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No. 5 to Lease by and between the Registrant and Santa Clara Phase III EFH LLC, dated September 29, 2017.
|
|
10-Q
|
|
001-35594
|
|
10.7
|
|
November 21, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Agreement, dated as of September 4, 2018, by and among the Registrant, the lenders from time to time party thereto and Citibank, N.A., as administrative agent.
|
|
8-K
|
|
001-35594
|
|
10.1
|
|
September 6, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
List of subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power of Attorney (contained in the signature page to this Annual Report on Form 10-K).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
**
|
Certain portions of this exhibit have been omitted as the Registrant has determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Registrant if publicly disclosed.
|
†
|
The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Annual Report on Form 10-K, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
|
PALO ALTO NETWORKS, INC.
|
|
By:
|
/s/ NIKESH ARORA
|
|
Nikesh Arora
|
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ NIKESH ARORA
|
|
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
|
|
September 9, 2019
|
Nikesh Arora
|
|
|
||
|
|
|
|
|
/s/ KATHLEEN BONANNO
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
September 9, 2019
|
Kathleen Bonanno
|
|
|
||
|
|
|
|
|
/s/ JEAN COMPEAU
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
|
September 9, 2019
|
Jean Compeau
|
|
|
||
|
|
|
||
/s/ MARK D. MCLAUGHLIN
|
|
Vice Chairman and Director
|
|
September 9, 2019
|
Mark D. McLaughlin
|
|
|
||
|
|
|
|
|
/s/ NIR ZUK
|
|
Chief Technical Officer and Director
|
|
September 9, 2019
|
Nir Zuk
|
|
|
||
|
|
|
||
/s/ FRANK CALDERONI
|
|
Director
|
|
September 9, 2019
|
Frank Calderoni
|
|
|
||
|
|
|
|
|
/s/ ASHEEM CHANDNA
|
|
Director
|
|
September 9, 2019
|
Asheem Chandna
|
|
|
||
|
|
|
||
/s/ JOHN M. DONOVAN
|
|
Director
|
|
September 9, 2019
|
John M. Donovan
|
|
|
||
|
|
|
|
|
/s/ CARL ESCHENBACH
|
|
Director
|
|
September 9, 2019
|
Carl Eschenbach
|
|
|
||
|
|
|
|
|
/s/ JAMES J. GOETZ
|
|
Director
|
|
September 9, 2019
|
James J. Goetz
|
|
|
||
|
|
|
||
/s/ RT HON SIR JOHN KEY
|
|
Director
|
|
September 9, 2019
|
Rt Hon Sir John Key
|
|
|
||
|
|
|
|
|
/s/ MARY PAT MCCARTHY
|
|
Director
|
|
September 9, 2019
|
Mary Pat McCarthy
|
|
|
||
|
|
|
||
/s/ SRIDHAR RAMASWAMY
|
|
Director
|
|
September 9, 2019
|
Sridhar Ramaswamy
|
|
|
||
|
|
|
|
|
/s/ LORRAINE TWOHILL
|
|
Director
|
|
September 9, 2019
|
Lorraine Twohill
|
|
|
||
|
|
|
|
|
/s/ DANIEL J. WARMENHOVEN
|
|
Director
|
|
September 9, 2019
|
Daniel J. Warmenhoven
|
|
|
•
|
prior to the date of the transaction, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
•
|
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
•
|
at or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
|
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 K.K. (Kabushiki 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
|
Cyvera Ltd., d/b/a Palo Alto Networks (Israel) Ltd.
|
|
Israel
|
Palo Alto Networks (Israel Services) Ltd.
|
|
Israel
|
Cyvera, Inc.
|
|
Delaware
|
Palo Alto Networks (India) Private Limited
|
|
India
|
Palo Alto Networks Holding B.V.
|
|
Netherlands
|
Palo Alto Networks (Singapore) Holding Company Pte. Ltd.
|
|
Singapore
|
Palo Alto Networks (Italy) S.R.L
|
|
Italy
|
PAN II LLC
|
|
Delaware
|
Palo Alto Networks (Switzerland) GmbH
|
|
Switzerland
|
Palo Alto Networks (Iberia), S.L.
|
|
Spain
|
Palo Alto Networks (RUS) LLC
|
|
Russia
|
CirroSecure, Inc.
|
|
Delaware
|
Palo Alto Networks (Czech) S.R.O.
|
|
Czech Republic
|
Palo Alto Networks Denmark ApS
|
|
Denmark
|
Palo Alto Security Limited
|
|
Ireland
|
Palo Alto Networks Saudi Arabian Limited Company
|
|
Saudi Arabia
|
Palo Alto Networks (EU) B.V.
|
|
Netherlands
|
Palo Alto Networks (GEO) B.V.
|
|
Netherlands
|
Palo Alto Networks (Israel Analytics) Ltd. (fka LightCyber Ltd.)
|
|
Israel
|
LightCyber B.V.
|
|
Netherlands
|
LightCyber, Inc.
|
|
Delaware
|
Palo Alto Networks Management, LLC
|
|
Delaware
|
Palo Alto Networks Venture Fund, LLC
|
|
Delaware
|
Palo Alto Networks (Finland) Oy
|
|
Finland
|
Palo Alto Networks (QFC) LLC
|
|
Qatar
|
Evident.io, Inc.
|
|
Delaware
|
Evident.io Pyt. Ltd.
|
|
Australia
|
Secdo, Inc.
|
|
Delaware
|
Blue Sage, LLC
|
|
California
|
Palo Alto Networks Jersey Ltd.
|
|
Jersey (UK Channel Island)
|
RedLock, Inc.
|
|
Delaware
|
RedLock India Private Ltd.
|
|
India
|
RedLock Technology UK Ltd.
|
|
United Kingdom
|
Palo Alto Networks (APAC Holdings) B.V.
|
|
Netherlands
|
Palo Alto Networks (Austria) GmbH
|
|
Austria
|
PAN Demisto LLC
|
|
Delaware
|
Demisto Ltd.
|
|
Israel
|
Demisto UK Ltd.
|
|
United Kingdom
|
Demisto Australia Pyt Ltd.
|
|
Australia
|
Puresec Ltd.
|
|
Israel
|
Puresec, Inc.
|
|
Delaware
|
Twistlock Ltd.
|
|
Israel
|
Twistlock, Inc.
|
|
Delaware
|
Twistlock Europe Ltd.
|
|
United Kingdom
|
PA Networks (Costa Rica) LLC SRL
|
|
Costa Rica
|
(1)
|
Registration Statement (Form S-3 No. 333-227324) of Palo Alto Networks, Inc.,
|
(2)
|
Registration Statement (Form S-8 No. 333-182762) pertaining to the 2005 Equity Incentive Plan, 2012 Equity Incentive Plan and the 2012 Employee Stock Purchase Plan of Palo Alto Networks, Inc.,
|
(3)
|
Registration Statements (Form S-8 No. 333-191340, 333-198859, 333-207003, 333-213547, 333-220383 and 333-227322) pertaining to the 2012 Equity Incentive Plan and the 2012 Employee Stock Purchase Plan of Palo Alto Networks, Inc.,
|
(4)
|
Registration Statement (Form S-8 No. 333-227901) pertaining to the RedLock Inc 2015 Stock Plan,
|
(5)
|
Registration Statement (Form S-8 No. 333-230663) pertaining to the Demisto, Inc. 2015 Stock Option Plan, and
|
(6)
|
Registration Statement (Form S-8 No. 333-232672) pertaining to the Twistlock Ltd. Amended and Restated 2015 Share Option Plan;
|
/s/ NIKESH ARORA
|
Nikesh Arora
|
Chief Executive Officer and Director
|
/s/ KATHLEEN BONANNO
|
Kathleen Bonanno
|
Chief Financial Officer
|
/s/ NIKESH ARORA
|
Nikesh Arora
|
Chief Executive Officer and Director
|
/s/ KATHLEEN BONANNO
|
Kathleen Bonanno
|
Chief Financial Officer
|