Delaware
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36-4468504
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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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1001 E. Hillsdale Blvd., Suite 800
Foster City, California
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94404
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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•
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growth prospects of the Property & Casualty (“P&C”) insurance industry and our company;
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•
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trends in our future sales, including seasonality;
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•
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opportunities for growth by technology leadership;
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•
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competitive advantages of our platform of software application solutions;
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•
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our market strategy in relation to our competitors;
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•
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competitive attributes of our software application solutions;
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•
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opportunities to further expand our position outside of the United States;
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•
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our research and development investment and efforts;
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•
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our gross margins and factors that affect gross margins;
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•
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our provision for tax liabilities and other critical accounting estimates;
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•
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our exposure to market risks, and;
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•
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our ability to satisfy future liquidity requirements.
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ITEM 1.
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Financial Statements (unaudited)
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October 31,
2015 |
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July 31,
2015 |
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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192,731
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$
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212,362
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Short-term investments
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343,800
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359,273
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Accounts receivable
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54,303
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62,062
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Deferred tax assets, current
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13,832
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13,845
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Prepaid expenses and other current assets
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14,416
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14,102
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Total current assets
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619,082
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661,644
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Long-term investments
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127,118
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106,117
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Property and equipment, net
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13,418
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12,160
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Intangible assets, net
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3,639
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3,999
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Deferred tax assets, noncurrent
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12,795
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5,896
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Goodwill
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9,205
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9,205
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Other assets
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1,675
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|
926
|
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TOTAL ASSETS
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$
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786,932
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$
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799,947
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
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||||
CURRENT LIABILITIES:
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|
||||
Accounts payable
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$
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5,943
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$
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8,816
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Accrued employee compensation
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17,318
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37,235
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Deferred revenues, current
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46,973
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50,766
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Other current liabilities
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6,477
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7,592
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Total current liabilities
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76,711
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104,409
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Deferred revenues, noncurrent
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2,658
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1,800
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Other liabilities
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3,951
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4,350
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Total liabilities
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83,320
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110,559
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STOCKHOLDERS’ EQUITY:
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Common stock
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7
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7
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Additional paid-in capital
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679,080
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662,869
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Accumulated other comprehensive loss
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(6,700
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)
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(6,343
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)
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Retained earnings
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31,225
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|
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32,855
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Total stockholders’ equity
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703,612
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689,388
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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786,932
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$
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799,947
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Three Months Ended October 31,
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||||||
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2015
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2014
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||||
Revenues:
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License
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$
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32,340
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$
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28,820
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Maintenance
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14,013
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12,520
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Services
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35,927
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38,394
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Total revenues
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82,280
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79,734
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Cost of revenues:
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License
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1,164
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1,082
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Maintenance
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2,475
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2,242
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Services
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31,531
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32,447
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Total cost of revenues
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35,170
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35,771
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Gross profit:
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License
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31,176
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27,738
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Maintenance
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11,538
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10,278
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Services
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4,396
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5,947
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Total gross profit
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47,110
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43,963
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Operating expenses:
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Research and development
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25,672
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20,310
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Sales and marketing
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19,291
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17,529
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General and administrative
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11,110
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9,762
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Total operating expenses
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56,073
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47,601
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Loss from operations
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(8,963
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)
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(3,638
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)
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Interest income
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696
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512
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Other income (expense), net
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217
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(483
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)
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Loss before income taxes
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(8,050
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)
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(3,609
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)
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Benefit from income taxes
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(6,420
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)
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(612
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)
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Net loss
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$
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(1,630
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)
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$
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(2,997
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)
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Net loss per share:
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Basic
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$
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(0.02
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)
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$
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(0.04
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)
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Diluted
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$
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(0.02
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)
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$
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(0.04
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)
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Shares used in computing net loss per share:
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Basic
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71,242,897
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69,316,700
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Diluted
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71,242,897
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69,316,700
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Three Months Ended October 31,
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||||||
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2015
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|
2014
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||||
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(in thousands)
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||||||
Net loss
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$
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(1,630
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)
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$
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(2,997
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)
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Other comprehensive loss:
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|
||||
Foreign currency translation adjustments
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(287
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)
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(1,269
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)
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Unrealized gains (losses) on available-for-sale securities, net of tax of $4 and $8
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(50
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)
|
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33
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|
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Reclassification adjustment for realized gains included in net loss
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(20
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)
|
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(3
|
)
|
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Other comprehensive loss
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(357
|
)
|
|
(1,239
|
)
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Comprehensive loss
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$
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(1,987
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)
|
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$
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(4,236
|
)
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Three Months Ended October 31,
|
||||||
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2015
|
|
2014
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
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$
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(1,630
|
)
|
|
$
|
(2,997
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
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1,791
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1,773
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Stock-based compensation
|
15,147
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|
|
11,988
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Excess tax benefit from exercise of stock options and vesting of restricted stock units
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(475
|
)
|
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—
|
|
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Deferred tax assets
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(6,905
|
)
|
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(955
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)
|
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Amortization of premium on available-for-sale securities
|
877
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|
|
1,414
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Loss on disposals of property and equipment
|
18
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—
|
|
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Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
7,638
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|
|
9,493
|
|
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Prepaid expenses and other assets
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(1,071
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)
|
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(814
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)
|
||
Accounts payable
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(2,542
|
)
|
|
87
|
|
||
Accrued employee compensation
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(19,840
|
)
|
|
(17,232
|
)
|
||
Other liabilities
|
(1,039
|
)
|
|
10
|
|
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Deferred revenues
|
(2,859
|
)
|
|
(8,315
|
)
|
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Net cash used in operating activities
|
(10,890
|
)
|
|
(5,548
|
)
|
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CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of available-for-sale securities
|
(195,336
|
)
|
|
(113,730
|
)
|
||
Sales of available-for-sale securities
|
188,867
|
|
|
102,539
|
|
||
Purchase of property and equipment
|
(3,016
|
)
|
|
(1,249
|
)
|
||
Net cash used in investing activities
|
(9,485
|
)
|
|
(12,440
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from issuance of common stock upon exercise of stock options
|
1,463
|
|
|
1,445
|
|
||
Taxes remitted on RSU awards vested
|
(874
|
)
|
|
(8,570
|
)
|
||
Excess tax benefit from exercise of stock options and vesting of restricted stock units
|
475
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
1,064
|
|
|
(7,125
|
)
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(320
|
)
|
|
(1,478
|
)
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(19,631
|
)
|
|
(26,591
|
)
|
||
CASH AND CASH EQUIVALENTS—Beginning of period
|
212,362
|
|
|
148,101
|
|
||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
192,731
|
|
|
$
|
121,510
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
394
|
|
|
$
|
506
|
|
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Accruals for purchase of property and equipment
|
$
|
177
|
|
|
$
|
703
|
|
1.
|
The Company and Summary of Significant Accounting Policies and Estimates
|
(i)
|
License fees, related to term (or time-based) licenses, perpetual software licenses, and other;
|
(ii)
|
Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if, available during the maintenance term; and
|
(iii)
|
Services fees, related to professional services related to implementation of our software, reimbursable travel and training.
|
•
|
Persuasive evidence of an arrangement exists.
Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period.
|
•
|
Delivery or performance has occurred
. The Company’s software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials.
|
•
|
Fees are fixed or determinable.
The Company assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Term and perpetual license fees are not considered to be fixed or determinable until they become due. Fees from term licenses are generally invoiced in annual, or in certain cases quarterly, installments over the term of the agreement beginning on the effective date of the license. Perpetual license fees are generally due between 30 and 60 days from delivery of software, however in certain cases extended payment terms may be offered.
|
•
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Collectability is probable.
Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from
30
to
90
days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied.
|
2.
|
Fair Value of Financial Instruments
|
|
October 31, 2015
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
U.S. agency securities
|
$
|
104,668
|
|
|
$
|
16
|
|
|
$
|
(8
|
)
|
|
$
|
104,676
|
|
Commercial paper
|
120,295
|
|
|
11
|
|
|
(1
|
)
|
|
120,305
|
|
||||
Corporate bonds
|
265,127
|
|
|
91
|
|
|
(281
|
)
|
|
264,937
|
|
||||
U.S. government bonds
|
43,081
|
|
|
3
|
|
|
(28
|
)
|
|
43,056
|
|
||||
Foreign government bonds
|
8,630
|
|
|
5
|
|
|
—
|
|
|
8,635
|
|
||||
Money market funds
|
100,704
|
|
|
—
|
|
|
—
|
|
|
100,704
|
|
||||
Total
|
$
|
642,505
|
|
|
$
|
126
|
|
|
$
|
(318
|
)
|
|
$
|
642,313
|
|
|
July 31, 2015
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
U.S. agency securities
|
$
|
82,946
|
|
|
$
|
21
|
|
|
$
|
(4
|
)
|
|
$
|
82,963
|
|
Commercial paper
|
142,822
|
|
|
13
|
|
|
(4
|
)
|
|
142,831
|
|
||||
Corporate bonds
|
281,942
|
|
|
47
|
|
|
(216
|
)
|
|
281,773
|
|
||||
U.S. government bonds
|
32,529
|
|
|
13
|
|
|
(2
|
)
|
|
32,540
|
|
||||
Foreign government bonds
|
8,663
|
|
|
7
|
|
|
(2
|
)
|
|
8,668
|
|
||||
Certificate of deposit
|
2,700
|
|
|
—
|
|
|
—
|
|
|
2,700
|
|
||||
Money market funds
|
88,319
|
|
|
—
|
|
|
—
|
|
|
88,319
|
|
||||
Total
|
$
|
639,921
|
|
|
$
|
101
|
|
|
$
|
(228
|
)
|
|
$
|
639,794
|
|
|
October 31, 2015
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Commercial paper
|
$
|
56,926
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,926
|
|
|
$
|
(1
|
)
|
U.S. agency securities
|
35,508
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
35,508
|
|
|
(8
|
)
|
||||||
Corporate bonds
|
142,383
|
|
|
(280
|
)
|
|
5,875
|
|
|
(1
|
)
|
|
148,258
|
|
|
(281
|
)
|
||||||
U.S. government bonds
|
25,057
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
25,057
|
|
|
(28
|
)
|
||||||
Foreign government bonds
|
2,900
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|
*
|
|
||||||
Total
|
$
|
262,774
|
|
|
$
|
(317
|
)
|
|
$
|
5,875
|
|
|
$
|
(1
|
)
|
|
$
|
268,649
|
|
|
$
|
(318
|
)
|
|
Less Than 12 Months
|
|
12 to 36 Months
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
U.S. agency securities
|
$
|
78,848
|
|
|
$
|
25,828
|
|
|
$
|
104,676
|
|
Commercial paper
|
120,305
|
|
|
—
|
|
|
120,305
|
|
|||
Corporate bonds
|
178,710
|
|
|
86,227
|
|
|
264,937
|
|
|||
U.S. government bonds
|
27,993
|
|
|
15,063
|
|
|
43,056
|
|
|||
Foreign government bonds
|
8,635
|
|
|
—
|
|
|
8,635
|
|
|||
Money market funds
|
100,704
|
|
|
—
|
|
|
100,704
|
|
|||
Total
|
$
|
515,195
|
|
|
$
|
127,118
|
|
|
$
|
642,313
|
|
|
October 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
70,691
|
|
|
$
|
—
|
|
|
$
|
70,691
|
|
Money market funds
|
100,704
|
|
|
—
|
|
|
—
|
|
|
100,704
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
—
|
|
|
78,848
|
|
|
—
|
|
|
78,848
|
|
||||
Commercial paper
|
—
|
|
|
49,614
|
|
|
—
|
|
|
49,614
|
|
||||
Corporate bonds
|
—
|
|
|
178,710
|
|
|
—
|
|
|
178,710
|
|
||||
U.S. government bonds
|
—
|
|
|
27,993
|
|
|
—
|
|
|
27,993
|
|
||||
Foreign government bonds
|
—
|
|
|
8,635
|
|
|
—
|
|
|
8,635
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
—
|
|
|
25,828
|
|
|
—
|
|
|
25,828
|
|
||||
U.S. government bonds
|
—
|
|
|
15,063
|
|
|
—
|
|
|
15,063
|
|
||||
Corporate bonds
|
—
|
|
|
86,227
|
|
|
—
|
|
|
86,227
|
|
||||
Total assets
|
$
|
100,704
|
|
|
$
|
541,609
|
|
|
$
|
—
|
|
|
$
|
642,313
|
|
|
July 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
86,085
|
|
|
$
|
—
|
|
|
$
|
86,085
|
|
Money market funds
|
88,319
|
|
|
—
|
|
|
—
|
|
|
88,319
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
—
|
|
|
68,212
|
|
|
—
|
|
|
68,212
|
|
||||
Commercial paper
|
—
|
|
|
56,746
|
|
|
—
|
|
|
56,746
|
|
||||
U. S. government bonds
|
—
|
|
|
19,983
|
|
|
—
|
|
|
19,983
|
|
||||
Foreign government bonds
|
—
|
|
|
8,668
|
|
|
—
|
|
|
8,668
|
|
||||
Corporate bonds
|
—
|
|
|
202,964
|
|
|
—
|
|
|
202,964
|
|
||||
Certificate of deposit
|
—
|
|
|
2,700
|
|
|
—
|
|
|
2,700
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
—
|
|
|
14,751
|
|
|
—
|
|
|
14,751
|
|
||||
Corporate bonds
|
—
|
|
|
78,809
|
|
|
—
|
|
|
78,809
|
|
||||
U.S. government bonds
|
—
|
|
|
12,557
|
|
|
—
|
|
|
12,557
|
|
||||
Total assets
|
$
|
88,319
|
|
|
$
|
551,475
|
|
|
$
|
—
|
|
|
$
|
639,794
|
|
3.
|
Balance Sheet Components
|
|
October 31, 2015
|
|
July 31, 2015
|
||||
|
(in thousands)
|
||||||
Computer hardware
|
$
|
17,477
|
|
|
$
|
15,099
|
|
Software
|
4,873
|
|
|
4,867
|
|
||
Furniture and fixtures
|
3,126
|
|
|
3,065
|
|
||
Leasehold improvements
|
8,089
|
|
|
8,040
|
|
||
Total property and equipment
|
33,565
|
|
|
31,071
|
|
||
Less accumulated depreciation
|
(20,147
|
)
|
|
(18,911
|
)
|
||
Property and equipment, net
|
$
|
13,418
|
|
|
$
|
12,160
|
|
|
October 31, 2015
|
|
July 31, 2015
|
||||
Acquired technology:
|
(in thousands)
|
||||||
Cost
|
$
|
7,200
|
|
|
$
|
7,200
|
|
Accumulated amortization
|
(3,561
|
)
|
|
(3,201
|
)
|
||
Intangible assets, net
|
$
|
3,639
|
|
|
$
|
3,999
|
|
|
Future Amortization
|
||
|
(in thousands)
|
||
Fiscal year ending July 31,
|
|
||
2016 (remainder of fiscal year)
|
1,080
|
|
|
2017
|
1,440
|
|
|
2018
|
1,119
|
|
|
Total
|
$
|
3,639
|
|
|
October 31, 2015
|
|
July 31, 2015
|
||||
|
(in thousands)
|
||||||
Accrued bonuses
|
$
|
4,641
|
|
|
$
|
19,819
|
|
Accrued commission
|
674
|
|
|
5,008
|
|
||
Accrued vacation
|
8,374
|
|
|
7,980
|
|
||
Accrued salaries, payroll taxes and benefits
|
3,629
|
|
|
4,428
|
|
||
Total
|
$
|
17,318
|
|
|
$
|
37,235
|
|
|
Foreign Currency Items
|
|
Unrealized gain (loss) on available-for-sale securities
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance as of July 31, 2015
|
$
|
(6,247
|
)
|
|
$
|
(96
|
)
|
|
$
|
(6,343
|
)
|
Other comprehensive gain (loss) before reclassification
|
(287
|
)
|
|
(46
|
)
|
|
(333
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss to earnings
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|||
Tax effect
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Balance as of October 31, 2015
|
$
|
(6,534
|
)
|
|
$
|
(166
|
)
|
|
$
|
(6,700
|
)
|
4.
|
Net Loss Per Share
|
|
Three Months Ended October 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands, except share and per share amounts)
|
||||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(1,630
|
)
|
|
$
|
(2,997
|
)
|
Net loss per share:
|
|
|
|
||||
Basic
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
Denominator:
|
|
|
|
||||
Weighted average shares used in computing net loss per share:
|
|
|
|
||||
Basic
|
71,242,897
|
|
|
69,316,700
|
|
||
Diluted
|
71,242,897
|
|
|
69,316,700
|
|
|
Three Months Ended October 31,
|
||||
|
2015
|
|
2014
|
||
Stock options to purchase common stock
|
1,573,487
|
|
|
2,386,474
|
|
Restricted stock units
|
3,360,099
|
|
|
3,763,160
|
|
5.
|
Commitments and Contingencies
|
6.
|
Stockholders’ Equity and Stock-Based Compensation
|
|
Three Months Ended October 31,
|
||||||
|
2015
|
|
2014
|
||||
Stock-based compensation expenses:
|
(in thousands)
|
||||||
Cost of license revenues
|
$
|
89
|
|
|
$
|
49
|
|
Cost of maintenance revenues
|
339
|
|
|
277
|
|
||
Cost of services revenues
|
4,363
|
|
|
3,513
|
|
||
Research and development
|
3,672
|
|
|
2,143
|
|
||
Sales and marketing
|
3,430
|
|
|
2,987
|
|
||
General and administrative
|
3,254
|
|
|
3,019
|
|
||
Total stock-based compensation expenses
|
$
|
15,147
|
|
|
$
|
11,988
|
|
|
As of October 31, 2015
|
||||
|
Unrecognized Expense
|
|
Weighted Average Expected Recognition Period
|
||
|
(in thousands)
|
|
(in years)
|
||
Stock options
|
$
|
4,444
|
|
|
2.1
|
Restricted stock units
|
136,218
|
|
|
2.7
|
|
|
$
|
140,662
|
|
|
|
|
RSUs Outstanding
|
|||||||||
|
Number of RSUs Outstanding
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value
(1)
|
|||||
Balance as of July 31, 2015
|
2,882,674
|
|
|
$
|
42.65
|
|
|
$
|
170,222
|
|
Granted
|
1,160,754
|
|
|
$
|
54.00
|
|
|
|
||
Released
|
(356,094
|
)
|
|
$
|
34.29
|
|
|
$
|
18,439
|
|
Canceled
|
(117,521
|
)
|
|
$
|
44.13
|
|
|
|
||
Balance as of October 31, 2015
|
3,569,813
|
|
|
$
|
47.13
|
|
|
$
|
207,870
|
|
Expected to vest as of October 31, 2015
|
3,282,240
|
|
|
$
|
46.83
|
|
|
$
|
191,125
|
|
(1)
|
Aggregate intrinsic value at each period end represents the total market value of RSUs at the Company’s closing stock price of
$58.23
and
$59.05
on
October 31, 2015
and
July 31, 2015
, respectively. Aggregate intrinsic value for released RSUs represents the total market value of released RSUs at date of release.
|
|
Stock Options Outstanding
|
|||||||||||
|
Number of Stock Options Outstanding
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
(1)
|
|||||
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Balance as of July 31, 2015
|
1,822,062
|
|
|
$
|
14.29
|
|
|
4.9
|
|
$
|
81,548
|
|
Granted
|
10,000
|
|
|
$
|
54.00
|
|
|
|
|
|
||
Exercised
|
(146,744
|
)
|
|
$
|
9.96
|
|
|
|
|
$
|
6,433
|
|
Canceled
|
(16,376
|
)
|
|
$
|
42.33
|
|
|
|
|
|
||
Balance as of October 31, 2015
|
1,668,942
|
|
|
$
|
14.64
|
|
|
4.8
|
|
$
|
72,753
|
|
Vested and expected to vest as of October 31, 2015
|
1,656,065
|
|
|
$
|
14.38
|
|
|
4.7
|
|
$
|
72,616
|
|
Exercisable as of October 31, 2015
|
1,402,411
|
|
|
$
|
9.09
|
|
|
4.1
|
|
$
|
68,921
|
|
(1)
|
Aggregate intrinsic value at each period end represents the difference between the Company's closing stock prices of
$58.23
and
$59.05
on
October 31, 2015
and
July 31, 2015
, respectively, and the exercise price of outstanding options. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price.
|
|
Three Months Ended October 31,
|
||
|
2015
|
|
2014
|
Expected life (in years)
|
4.9
|
|
6.0
|
Risk-free interest rate
|
1.49%
|
|
1.92%
|
Expected volatility
|
38.8%
|
|
45.1%
|
Expected dividend yield
|
—%
|
|
—%
|
Weighted average fair value of options at grant date
|
$19.18
|
|
$20.53
|
|
October 31, 2015
|
|
July 31, 2015
|
||
Exercise of stock options to purchase common stock
|
1,668,942
|
|
|
1,822,062
|
|
Vesting of restricted stock units
|
3,569,813
|
|
|
2,882,674
|
|
Shares available under stock plans
|
13,343,932
|
|
|
14,363,906
|
|
Total common stock reserved for issuance
|
18,582,687
|
|
|
19,068,642
|
|
7.
|
Income Taxes
|
8.
|
Segment Information
|
|
October 31, 2015
|
|
July 31, 2015
|
||||
|
(in thousands)
|
||||||
Americas
|
$
|
23,810
|
|
|
$
|
22,746
|
|
EMEA
|
2,051
|
|
|
2,183
|
|
||
APAC
|
401
|
|
|
435
|
|
||
Total
|
$
|
26,262
|
|
|
$
|
25,364
|
|
|
Four quarters ended
|
|
|
||||||||||||||||||||||||||||||||
|
October 31, 2015
|
|
July 31, 2015
|
|
April 30, 2015
|
|
January 31, 2015
|
|
October 31, 2014
|
|
July 31, 2014
|
|
April 30, 2014
|
|
January 31, 2014
|
|
October 31, 2013
|
||||||||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||||||||||||||
Term license revenues
|
$
|
173,232
|
|
|
$
|
169,366
|
|
|
$
|
160,114
|
|
|
$
|
157,542
|
|
|
$
|
150,309
|
|
|
$
|
139,902
|
|
|
$
|
125,485
|
|
|
$
|
115,144
|
|
|
$
|
110,640
|
|
Maintenance revenues
|
51,516
|
|
|
50,024
|
|
|
48,785
|
|
|
47,041
|
|
|
44,768
|
|
|
41,888
|
|
|
39,836
|
|
|
38,510
|
|
|
37,830
|
|
|||||||||
Total four-quarter recurring revenues
|
$
|
224,748
|
|
|
$
|
219,390
|
|
|
$
|
208,899
|
|
|
$
|
204,583
|
|
|
$
|
195,077
|
|
|
$
|
181,790
|
|
|
$
|
165,321
|
|
|
$
|
153,654
|
|
|
$
|
148,470
|
|
•
|
Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and
|
•
|
it is useful to exclude non-cash charges, such as depreciation and amortization and stock-based compensation because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods.
|
|
Three Months Ended October 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Reconciliation of Adjusted EBITDA:
|
|
|
|
||||
Net loss
|
$
|
(1,630
|
)
|
|
$
|
(2,997
|
)
|
Non-GAAP adjustments:
|
|
|
|
||||
Benefit from income taxes
|
(6,420
|
)
|
|
(612
|
)
|
||
Interest income
|
(696
|
)
|
|
(512
|
)
|
||
Other expense (income), net
|
(217
|
)
|
|
483
|
|
||
Depreciation and amortization
|
1,791
|
|
|
1,773
|
|
||
Stock-based compensation
|
15,147
|
|
|
11,988
|
|
||
Adjusted EBITDA
|
$
|
7,975
|
|
|
$
|
10,123
|
|
•
|
Revenue recognition policies;
|
•
|
Stock-based compensation; and
|
•
|
Income taxes.
|
|
Three Months Ended October 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Revenues:
|
|
|
|
||||
License
|
$
|
32,340
|
|
|
$
|
28,820
|
|
Maintenance
|
14,013
|
|
|
12,520
|
|
||
Services
|
35,927
|
|
|
38,394
|
|
||
Total revenues
|
82,280
|
|
|
79,734
|
|
||
Cost of revenues:
|
|
|
|
||||
License
|
1,164
|
|
|
1,082
|
|
||
Maintenance
|
2,475
|
|
|
2,242
|
|
||
Services
|
31,531
|
|
|
32,447
|
|
||
Total cost of revenues
|
35,170
|
|
|
35,771
|
|
||
Gross profit:
|
|
|
|
||||
License
|
31,176
|
|
|
27,738
|
|
||
Maintenance
|
11,538
|
|
|
10,278
|
|
||
Services
|
4,396
|
|
|
5,947
|
|
||
Total gross profit
|
47,110
|
|
|
43,963
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
25,672
|
|
|
20,310
|
|
||
Sales and marketing
|
19,291
|
|
|
17,529
|
|
||
General and administrative
|
11,110
|
|
|
9,762
|
|
||
Total operating expenses
|
56,073
|
|
|
47,601
|
|
||
Loss from operations
|
(8,963
|
)
|
|
(3,638
|
)
|
||
Interest income
|
696
|
|
|
512
|
|
||
Other income (expense), net
|
217
|
|
|
(483
|
)
|
||
Loss before income taxes
|
(8,050
|
)
|
|
(3,609
|
)
|
||
Benefit from income taxes
|
(6,420
|
)
|
|
(612
|
)
|
||
Net loss
|
$
|
(1,630
|
)
|
|
$
|
(2,997
|
)
|
|
Three Months Ended October 31,
|
||||
|
2015
|
|
2014
|
||
|
(percentage of total revenues)
|
||||
Revenues:
|
|
|
|
||
License
|
39
|
%
|
|
36
|
%
|
Maintenance
|
17
|
%
|
|
16
|
%
|
Services
|
44
|
%
|
|
48
|
%
|
Total revenues
|
100
|
%
|
|
100
|
%
|
Cost of revenues:
|
|
|
|
||
License
|
1
|
%
|
|
1
|
%
|
Maintenance
|
3
|
%
|
|
3
|
%
|
Services
|
39
|
%
|
|
41
|
%
|
Total cost of revenues
|
43
|
%
|
|
45
|
%
|
Gross profit:
|
|
|
|
||
License
|
38
|
%
|
|
35
|
%
|
Maintenance
|
14
|
%
|
|
13
|
%
|
Services
|
5
|
%
|
|
7
|
%
|
Total gross profit
|
57
|
%
|
|
55
|
%
|
Operating expenses:
|
|
|
|
||
Research and development
|
31
|
%
|
|
26
|
%
|
Sales and marketing
|
23
|
%
|
|
22
|
%
|
General and administrative
|
14
|
%
|
|
12
|
%
|
Total operating expenses
|
68
|
%
|
|
60
|
%
|
Loss from operations
|
(11
|
)%
|
|
(5
|
)%
|
Interest income
|
1
|
%
|
|
1
|
%
|
Other income (expense), net
|
—
|
%
|
|
(1
|
)%
|
Loss before income taxes
|
(10
|
)%
|
|
(5
|
)%
|
Benefit from income taxes
|
(8
|
)%
|
|
(1
|
)%
|
Net loss
|
(2
|
)%
|
|
(4
|
)%
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
|
|
|
|||||||||||||
|
|
|
% of total
|
|
|
|
% of total
|
|
Change
|
|||||||||||
|
Amount
|
|
revenues
|
|
Amount
|
|
revenues
|
|
($)
|
|
(%)
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
License
|
$
|
32,340
|
|
|
39
|
%
|
|
$
|
28,820
|
|
|
36
|
%
|
|
$
|
3,520
|
|
|
12
|
%
|
Maintenance
|
14,013
|
|
|
17
|
%
|
|
12,520
|
|
|
16
|
%
|
|
1,493
|
|
|
12
|
%
|
|||
Services
|
35,927
|
|
|
44
|
%
|
|
38,394
|
|
|
48
|
%
|
|
(2,467
|
)
|
|
(6
|
)%
|
|||
Total revenues
|
$
|
82,280
|
|
|
100
|
%
|
|
$
|
79,734
|
|
|
100
|
%
|
|
$
|
2,546
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
|
|
|
|||||||||||||
|
|
|
% of license
|
|
|
|
% of license
|
|
Change
|
|||||||||||
|
Amount
|
|
revenues
|
|
Amount
|
|
revenues
|
|
($)
|
|
(%)
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
License revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Term
|
$
|
32,652
|
|
|
101
|
%
|
|
$
|
28,787
|
|
|
100
|
%
|
|
$
|
3,865
|
|
|
13
|
%
|
Perpetual
|
(312
|
)
|
|
(1
|
)%
|
|
33
|
|
|
—
|
%
|
|
(345
|
)
|
|
*
|
|
|||
Total license revenues
|
$
|
32,340
|
|
|
100
|
%
|
|
$
|
28,820
|
|
|
100
|
%
|
|
$
|
3,520
|
|
|
12
|
%
|
|
As of
|
|
|
|
|
|||||||||
|
October 31, 2015
|
|
July 31, 2015
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
($)
|
|
(%)
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Deferred revenues:
|
|
|
|
|
|
|
|
|||||||
Deferred license revenues
|
$
|
15,022
|
|
|
$
|
13,558
|
|
|
$
|
1,464
|
|
|
11
|
%
|
Deferred maintenance revenues
|
26,671
|
|
|
32,365
|
|
|
(5,694
|
)
|
|
(18
|
)%
|
|||
Deferred services revenues
|
7,938
|
|
|
6,643
|
|
|
1,295
|
|
|
19
|
%
|
|||
Total deferred revenues
|
$
|
49,631
|
|
|
$
|
52,566
|
|
|
$
|
(2,935
|
)
|
|
(6
|
)%
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
($)
|
|
(%)
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Cost of revenues:
|
|
|
|
|
|
|
|
|||||||
License
|
$
|
1,164
|
|
|
$
|
1,082
|
|
|
$
|
82
|
|
|
8
|
%
|
Maintenance
|
2,475
|
|
|
2,242
|
|
|
233
|
|
|
10
|
%
|
|||
Services
|
31,531
|
|
|
32,447
|
|
|
(916
|
)
|
|
(3
|
)%
|
|||
Total cost of revenues
|
$
|
35,170
|
|
|
$
|
35,771
|
|
|
$
|
(601
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Includes stock-based awards of:
|
|
|
|
|
|
|
|
|||||||
Cost of license revenues
|
$
|
89
|
|
|
$
|
49
|
|
|
$
|
40
|
|
|
|
|
Cost of maintenance revenues
|
339
|
|
|
277
|
|
|
62
|
|
|
|
||||
Cost of services revenues
|
4,363
|
|
|
3,513
|
|
|
850
|
|
|
|
||||
Total
|
$
|
4,791
|
|
|
$
|
3,839
|
|
|
$
|
952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Margin %
|
|
Amount
|
|
Margin %
|
|
($)
|
|
(%)
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
License
|
$
|
31,176
|
|
|
96
|
%
|
|
$
|
27,738
|
|
|
96
|
%
|
|
$
|
3,438
|
|
|
12
|
%
|
Maintenance
|
11,538
|
|
|
82
|
%
|
|
10,278
|
|
|
82
|
%
|
|
1,260
|
|
|
12
|
%
|
|||
Services
|
4,396
|
|
|
12
|
%
|
|
5,947
|
|
|
15
|
%
|
|
(1,551
|
)
|
|
(26
|
)%
|
|||
Total gross profit
|
$
|
47,110
|
|
|
57
|
%
|
|
$
|
43,963
|
|
|
55
|
%
|
|
$
|
3,147
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
|
|
|
|||||||||||||
|
|
|
% of total
|
|
|
|
% of total
|
|
Change
|
|||||||||||
|
Amount
|
|
revenues
|
|
Amount
|
|
revenues
|
|
($)
|
|
(%)
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
25,672
|
|
|
31
|
%
|
|
$
|
20,310
|
|
|
26
|
%
|
|
$
|
5,362
|
|
|
26
|
%
|
Sales and marketing
|
19,291
|
|
|
23
|
%
|
|
17,529
|
|
|
22
|
%
|
|
1,762
|
|
|
10
|
%
|
|||
General and administrative
|
11,110
|
|
|
14
|
%
|
|
9,762
|
|
|
12
|
%
|
|
1,348
|
|
|
14
|
%
|
|||
Total operating expenses
|
$
|
56,073
|
|
|
68
|
%
|
|
$
|
47,601
|
|
|
60
|
%
|
|
$
|
8,472
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Includes stock-based compensation of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
3,672
|
|
|
|
|
$
|
2,143
|
|
|
|
|
$
|
1,529
|
|
|
|
|||
Sales and marketing
|
3,430
|
|
|
|
|
2,987
|
|
|
|
|
443
|
|
|
|
||||||
General and administrative
|
3,254
|
|
|
|
|
3,019
|
|
|
|
|
235
|
|
|
|
||||||
Total
|
$
|
10,356
|
|
|
|
|
$
|
8,149
|
|
|
|
|
$
|
2,207
|
|
|
|
|
Three Months Ended October 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
Amount
|
|
Amount
|
|
($)
|
|
(%)
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Interest income
|
$
|
696
|
|
|
$
|
512
|
|
|
$
|
184
|
|
|
36
|
%
|
Other income (expense), net
|
$
|
217
|
|
|
$
|
(483
|
)
|
|
$
|
700
|
|
|
(145
|
)%
|
|
Three Months Ended October 31,
|
|
|
|
|
||||||||
|
2015
|
|
2014
|
|
Change
|
||||||||
|
Amount
|
|
Amount
|
|
($)
|
|
(%)
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
Benefit from income taxes
|
$
|
(6,420
|
)
|
|
$
|
(612
|
)
|
|
$
|
(5,808
|
)
|
|
*
|
|
Three Months Ended October 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Net cash used in operating activities
|
$
|
(10,890
|
)
|
|
$
|
(5,548
|
)
|
Net cash used in investing activities
|
$
|
(9,485
|
)
|
|
$
|
(12,440
|
)
|
Net cash provided by (used in) financing activities
|
$
|
1,064
|
|
|
$
|
(7,125
|
)
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
•
|
the timing of new orders and revenue recognition for new and prior year orders;
|
•
|
seasonal buying patterns of our customers;
|
•
|
our ability to increase sales to and renew agreements with our existing customers, particularly larger customers with substantial negotiating leverage, at comparable prices;
|
•
|
our ability to renew existing contracts for multiple year terms versus annual automatic renewals;
|
•
|
our ability to attract new customers in both domestic and international markets;
|
•
|
structure of our licensing contracts, including fluctuations in perpetual licenses from period to period;
|
•
|
our ability to enter into contracts on favorable terms, including terms related to price, payment timing and product delivery;
|
•
|
volatility in the sales of our products and timing of the execution of new and renewal agreements within such periods;
|
•
|
the impact of a recession or any other adverse global economic conditions on our business, including uncertainties that may cause a delay in entering into or a failure to enter into significant customer agreements;
|
•
|
the lengthy and variable nature of our product implementation cycles;
|
•
|
reductions in our customers’ budgets for information technology purchases and delays in their purchasing cycles;
|
•
|
erosion in services margins or significant increase or decrease in services revenues both in absolute terms and as a percentage of total revenues;
|
•
|
timing of commissions expense related to large transactions;
|
•
|
bonus expense based on the bonus attainment rate;
|
•
|
the timing and cost of hiring personnel and of large expenses such as third-party professional services;
|
•
|
stock-based compensation expenses, which vary along with changes to our stock price;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
unanticipated trade sanctions and other restrictions that may impede our ability to sell internationally;
|
•
|
general domestic and international economic conditions, in the insurance industry in particular; and
|
•
|
future accounting pronouncements or changes in accounting rules or our accounting policies.
|
•
|
for the initial year of a multi-year term license, we generally recognize revenues when payment is due and payment may not be due until a subsequent fiscal quarter;
|
•
|
we may enter into license agreements with future product delivery requirements or specified terms for product upgrades or functionality, which may require us to delay revenue recognition for the initial period;
|
•
|
our term licenses may include payment terms that are modest at the outset and increase over time; and
|
•
|
we may enter into license agreements with other contractual terms that may affect the timing of revenue recognition.
|
•
|
increased management, travel, infrastructure and legal compliance costs associated with having multiple international operations;
|
•
|
unique terms and conditions in contract negotiations imposed by customers in foreign countries;
|
•
|
longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable;
|
•
|
the need to localize our products and licensing programs for international customers;
|
•
|
lack of familiarity with and unexpected changes in foreign regulatory requirements;
|
•
|
increased exposure to fluctuations in currency exchange rates;
|
•
|
the burdens and costs of complying with a wide variety of foreign laws and legal standards;
|
•
|
compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), the U.K. Bribery Act and other anti-corruption regulations, particularly in emerging market countries;
|
•
|
compliance by international staff with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls;
|
•
|
import and export license requirements, tariffs, taxes and other trade barriers;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
weaker protection of intellectual property rights in some countries;
|
•
|
multiple and possibly overlapping tax regimes;
|
•
|
government sanctions that may interfere with our ability to sell into particular countries, such as Russia; and
|
•
|
political, social and economic instability abroad, terrorist attacks and security concerns in general.
|
•
|
providing for a classified board of directors with staggered three-year terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
|
not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
•
|
authorizing our board of directors to issue, without stockholder approval, preferred stock rights senior to those of common stock, which could be used to significantly dilute the ownership of a hostile acquirer;
|
•
|
prohibiting stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
|
limiting the persons who may call special meetings of stockholders, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and
|
•
|
requiring advance notification of stockholder nominations and proposals, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
|
ITEM 6.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
Incorporated by
Reference From
Form
|
|
Incorporated
by Reference
From
Exhibit
Number
|
|
Date Filed
|
3.1
|
|
Amended and Restated Certificate of Incorporation
|
|
10-Q
|
|
3.1
|
|
March 14, 2012
|
3.2
|
|
Amended and Restated Bylaws
|
|
8-K
|
|
3.1
|
|
January 22, 2013
|
4.1
|
|
Form of Common Stock certificate of the Registrant
|
|
S-1/A
|
|
4.1
|
|
January 9, 2012
|
10.9
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement under the 2011 Stock Plan
|
|
Filed herewith
|
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
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32.1*
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Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
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Furnished herewith
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101.INS
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XBRL Instance Document
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Filed herewith
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101.SCH
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XBRL Taxonomy Extension Schema Document
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Filed herewith
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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Filed herewith
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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Filed herewith
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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Filed herewith
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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Filed herewith
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*
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The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
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Date:
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December 1, 2015
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GUIDEWIRE SOFTWARE, INC.
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By:
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/s/ Richard Hart
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Richard Hart
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Guidewire Software, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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December 1, 2015
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By:
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/s/ MARCUS S. RYU
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Marcus S. Ryu
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Guidewire Software, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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December 1, 2015
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By:
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/s/ RICHARD HART
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Richard Hart
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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Date:
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December 1, 2015
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By:
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/s/ MARCUS S. RYU
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Marcus S. Ryu
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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December 1, 2015
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By:
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/s/ RICHARD HART
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Richard Hart
|
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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