FORM
|
10-Q
|
Pure Storage, Inc.
|
(Exact Name of Registrant as Specified in its Charter)
|
Delaware
|
|
27-1069557
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if a small reporting company)
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
Class A Common Stock, $0.0001 par value per share
|
|
PSTG
|
|
New York Stock Exchange LLC
|
|
|
Page
|
PART I.
|
|
|
Item 1.
|
||
|
||
|
||
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||
|
||
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||
|
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Item 2.
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Item 3.
|
||
Item 4.
|
||
PART II.
|
|
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Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
447,990
|
|
|
$
|
268,938
|
|
Marketable securities
|
749,482
|
|
|
913,521
|
|
||
Accounts receivable, net of allowance of $660 and $614 as of January 31, 2019 and July 31, 2019
|
378,729
|
|
|
352,617
|
|
||
Inventory
|
44,687
|
|
|
35,820
|
|
||
Deferred commissions, current
|
29,244
|
|
|
31,273
|
|
||
Prepaid expenses and other current assets
|
51,695
|
|
|
47,776
|
|
||
Total current assets
|
1,701,827
|
|
|
1,649,945
|
|
||
Property and equipment, net
|
125,353
|
|
|
131,048
|
|
||
Operating lease right-of-use assets
|
—
|
|
|
114,339
|
|
||
Deferred commissions, non-current
|
85,729
|
|
|
87,295
|
|
||
Intangible assets, net
|
20,118
|
|
|
63,659
|
|
||
Goodwill
|
10,997
|
|
|
36,420
|
|
||
Deferred income taxes, non-current
|
1,060
|
|
|
939
|
|
||
Restricted cash
|
15,823
|
|
|
15,425
|
|
||
Other assets, non-current
|
12,118
|
|
|
16,904
|
|
||
Total assets
|
$
|
1,973,025
|
|
|
$
|
2,115,974
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
103,462
|
|
|
$
|
64,582
|
|
Accrued compensation and benefits
|
99,910
|
|
|
70,753
|
|
||
Accrued expenses and other liabilities
|
39,860
|
|
|
44,690
|
|
||
Operating lease liabilities, current
|
—
|
|
|
26,005
|
|
||
Deferred revenue, current
|
266,584
|
|
|
308,523
|
|
||
Total current liabilities
|
509,816
|
|
|
514,553
|
|
||
Convertible senior notes, net
|
449,828
|
|
|
463,118
|
|
||
Operating lease liabilities, non-current
|
—
|
|
|
94,941
|
|
||
Deferred revenue, non-current
|
269,336
|
|
|
298,740
|
|
||
Deferred tax liabilities, non-current
|
—
|
|
|
5,697
|
|
||
Other liabilities, non-current
|
6,265
|
|
|
1,386
|
|
||
Total liabilities
|
1,235,245
|
|
|
1,378,435
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, par value of $0.0001 per share— 20,000 shares authorized as of January 31, 2019 and July 31, 2019; no shares issued and outstanding as of January 31, 2019 and July 31, 2019
|
—
|
|
|
—
|
|
||
Class A and Class B common stock, par value of $0.0001 per share— 2,250,000 (Class A 2,000,000, Class B 250,000) shares authorized as of January 31, 2019 and July 31, 2019; 243,524 and 255,752 Class A shares issued and outstanding as of January 31, 2019 and July 31, 2019
|
24
|
|
|
26
|
|
||
Additional paid-in capital
|
1,820,043
|
|
|
1,982,407
|
|
||
Accumulated other comprehensive income (loss)
|
(338
|
)
|
|
3,409
|
|
||
Accumulated deficit
|
(1,081,949
|
)
|
|
(1,248,303
|
)
|
||
Total stockholders’ equity
|
737,780
|
|
|
737,539
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,973,025
|
|
|
$
|
2,115,974
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
$
|
241,137
|
|
|
$
|
300,128
|
|
|
$
|
436,586
|
|
|
$
|
538,869
|
|
Support subscription
|
67,747
|
|
|
96,199
|
|
|
128,243
|
|
|
184,158
|
|
||||
Total revenue
|
308,884
|
|
|
396,327
|
|
|
564,829
|
|
|
723,027
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
78,262
|
|
|
92,870
|
|
|
144,682
|
|
|
169,462
|
|
||||
Support subscription
|
24,457
|
|
|
35,138
|
|
|
47,667
|
|
|
68,859
|
|
||||
Total cost of revenue
|
102,719
|
|
|
128,008
|
|
|
192,349
|
|
|
238,321
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
206,165
|
|
|
268,319
|
|
|
372,480
|
|
|
484,706
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
84,031
|
|
|
107,020
|
|
|
162,523
|
|
|
212,095
|
|
||||
Sales and marketing
|
143,749
|
|
|
186,188
|
|
|
266,116
|
|
|
352,814
|
|
||||
General and administrative
|
33,591
|
|
|
40,016
|
|
|
60,921
|
|
|
82,126
|
|
||||
Total operating expenses
|
261,371
|
|
|
333,224
|
|
|
489,560
|
|
|
647,035
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(55,206
|
)
|
|
(64,905
|
)
|
|
(117,080
|
)
|
|
(162,329
|
)
|
||||
Other income (expense), net
|
(4,032
|
)
|
|
(652
|
)
|
|
(5,031
|
)
|
|
(2,468
|
)
|
||||
Loss before provision for income taxes
|
(59,238
|
)
|
|
(65,557
|
)
|
|
(122,111
|
)
|
|
(164,797
|
)
|
||||
Income tax provision
|
885
|
|
|
461
|
|
|
2,316
|
|
|
1,557
|
|
||||
Net loss
|
$
|
(60,123
|
)
|
|
$
|
(66,018
|
)
|
|
$
|
(124,427
|
)
|
|
$
|
(166,354
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.26
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.67
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
229,359
|
|
|
251,298
|
|
|
226,609
|
|
|
248,366
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(60,123
|
)
|
|
$
|
(66,018
|
)
|
|
$
|
(124,427
|
)
|
|
$
|
(166,354
|
)
|
Other comprehensive income (loss) net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized net gain (loss) on available-for-sale securities
|
(193
|
)
|
|
2,120
|
|
|
(909
|
)
|
|
3,747
|
|
||||
Comprehensive loss
|
$
|
(60,316
|
)
|
|
$
|
(63,898
|
)
|
|
$
|
(125,336
|
)
|
|
$
|
(162,607
|
)
|
|
Three Months Ended July 31, 2018
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of April 30, 2018
|
229,596
|
|
|
$
|
23
|
|
|
$
|
1,602,121
|
|
|
$
|
(2,633
|
)
|
|
$
|
(967,891
|
)
|
|
$
|
631,620
|
|
Issuance of common stock upon exercise of stock options
|
3,691
|
|
|
1
|
|
|
19,435
|
|
|
—
|
|
|
—
|
|
|
19,436
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
53,654
|
|
|
—
|
|
|
—
|
|
|
53,654
|
|
|||||
Vesting of restricted stock units
|
2,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of restricted stock
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(193
|
)
|
|
—
|
|
|
(193
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,123
|
)
|
|
(60,123
|
)
|
|||||
Balance as of July 31, 2018
|
235,412
|
|
|
$
|
24
|
|
|
$
|
1,675,210
|
|
|
$
|
(2,826
|
)
|
|
$
|
(1,028,014
|
)
|
|
$
|
644,394
|
|
|
||||||||||||||||||||||
|
Three Months Ended July 31, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of April 30, 2019
|
252,853
|
|
|
$
|
25
|
|
|
$
|
1,924,947
|
|
|
$
|
1,289
|
|
|
$
|
(1,182,285
|
)
|
|
$
|
743,976
|
|
Issuance of common stock upon exercise of stock options
|
655
|
|
|
—
|
|
|
2,502
|
|
|
—
|
|
|
—
|
|
|
2,502
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
56,460
|
|
|
—
|
|
|
—
|
|
|
56,460
|
|
|||||
Vesting of restricted stock units
|
2,277
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net issuance of restricted stock
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax withholding on vesting of restricted stock
|
—
|
|
|
—
|
|
|
(1,501
|
)
|
|
—
|
|
|
—
|
|
|
(1,501
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,120
|
|
|
—
|
|
|
2,120
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,018
|
)
|
|
(66,018
|
)
|
|||||
Balance as of July 31, 2019
|
255,752
|
|
|
$
|
26
|
|
|
$
|
1,982,407
|
|
|
$
|
3,409
|
|
|
$
|
(1,248,303
|
)
|
|
$
|
737,539
|
|
|
Six Months Ended July 31, 2018
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of January 31, 2018
|
220,979
|
|
|
22
|
|
|
1,479,883
|
|
|
(1,917
|
)
|
|
(903,587
|
)
|
|
574,401
|
|
|||||
Issuance of common stock upon exercise of stock options
|
5,884
|
|
|
1
|
|
|
29,065
|
|
|
—
|
|
|
—
|
|
|
29,066
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
97,609
|
|
|
—
|
|
|
—
|
|
|
97,609
|
|
|||||
Vesting of early exercised stock options
|
—
|
|
|
—
|
|
|
320
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|||||
Vesting of restricted stock units
|
4,117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock issued under employee stock purchase plan
|
2,111
|
|
|
—
|
|
|
19,698
|
|
|
—
|
|
|
—
|
|
|
19,698
|
|
|||||
Issuance of restricted stock
|
3,330
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Repurchase of common stock
|
(1,009
|
)
|
|
—
|
|
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|||||
Purchase of capped calls
|
—
|
|
|
—
|
|
|
(64,630
|
)
|
|
—
|
|
|
—
|
|
|
(64,630
|
)
|
|||||
Equity component of convertible senior notes, net
|
—
|
|
|
—
|
|
|
133,265
|
|
|
—
|
|
|
—
|
|
|
133,265
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(909
|
)
|
|
—
|
|
|
(909
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,427
|
)
|
|
(124,427
|
)
|
|||||
Balance as of July 31, 2018
|
235,412
|
|
|
$
|
24
|
|
|
$
|
1,675,210
|
|
|
$
|
(2,826
|
)
|
|
$
|
(1,028,014
|
)
|
|
$
|
644,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Six Months Ended July 31, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of January 31, 2019
|
243,524
|
|
|
24
|
|
|
1,820,043
|
|
|
(338
|
)
|
|
(1,081,949
|
)
|
|
737,780
|
|
|||||
Issuance of common stock upon exercise of stock options
|
3,863
|
|
|
1
|
|
|
19,290
|
|
|
—
|
|
|
—
|
|
|
19,291
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
118,206
|
|
|
—
|
|
|
—
|
|
|
118,206
|
|
|||||
Vesting of restricted stock units
|
4,327
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net issuance of restricted stock
|
1,065
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax withholding on vesting of restricted stock
|
—
|
|
|
—
|
|
|
(7,173
|
)
|
|
—
|
|
|
—
|
|
|
(7,173
|
)
|
|||||
Common stock issued under employee stock purchase plan
|
2,973
|
|
|
—
|
|
|
32,042
|
|
|
—
|
|
|
—
|
|
|
32,042
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,747
|
|
|
—
|
|
|
3,747
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166,354
|
)
|
|
(166,354
|
)
|
|||||
Balance as of July 31, 2019
|
255,752
|
|
|
$
|
26
|
|
|
$
|
1,982,407
|
|
|
$
|
3,409
|
|
|
$
|
(1,248,303
|
)
|
|
$
|
737,539
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
Beginning balance (1)
|
$
|
86,044
|
|
|
$
|
113,257
|
|
|
$
|
87,313
|
|
|
$
|
114,973
|
|
Additions
|
24,582
|
|
|
30,074
|
|
|
40,003
|
|
|
48,310
|
|
||||
Recognition of deferred commissions
|
(19,157
|
)
|
|
(24,763
|
)
|
|
(35,847
|
)
|
|
(44,715
|
)
|
||||
Ending balance
|
$
|
91,469
|
|
|
$
|
118,568
|
|
|
$
|
91,469
|
|
|
$
|
118,568
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
Beginning balance (1)
|
$
|
388,614
|
|
|
$
|
564,230
|
|
|
$
|
374,102
|
|
|
$
|
535,920
|
|
Additions
|
92,511
|
|
|
140,548
|
|
|
167,782
|
|
|
258,441
|
|
||||
Recognition of deferred revenue
|
(67,878
|
)
|
|
(97,515
|
)
|
|
(128,637
|
)
|
|
(187,098
|
)
|
||||
Ending balance
|
$
|
413,247
|
|
|
$
|
607,263
|
|
|
$
|
413,247
|
|
|
$
|
607,263
|
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation
|
•
|
Level 1 - Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 - Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and
|
•
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.
|
|
As of January 31, 2019
|
||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Cash Equivalents
|
|
Marketable Securities
|
|
Restricted Cash
|
||||||||||||||
Level 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,038
|
|
|
$
|
27,215
|
|
|
$
|
—
|
|
|
$
|
15,823
|
|
Level 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. government treasury notes
|
315,329
|
|
|
208
|
|
|
(315
|
)
|
|
315,222
|
|
|
34,129
|
|
|
281,093
|
|
|
—
|
|
|||||||
U.S. government agencies
|
69,114
|
|
|
17
|
|
|
(154
|
)
|
|
68,977
|
|
|
9,983
|
|
|
58,994
|
|
|
—
|
|
|||||||
Corporate debt securities
|
363,860
|
|
|
534
|
|
|
(757
|
)
|
|
363,637
|
|
|
—
|
|
|
363,637
|
|
|
—
|
|
|||||||
Foreign government bonds
|
7,965
|
|
|
36
|
|
|
—
|
|
|
8,001
|
|
|
—
|
|
|
8,001
|
|
|
—
|
|
|||||||
Asset-backed securities
|
37,664
|
|
|
105
|
|
|
(12
|
)
|
|
37,757
|
|
|
—
|
|
|
37,757
|
|
|
—
|
|
|||||||
Total
|
$
|
793,932
|
|
|
$
|
900
|
|
|
$
|
(1,238
|
)
|
|
$
|
836,632
|
|
|
$
|
71,327
|
|
|
$
|
749,482
|
|
|
$
|
15,823
|
|
|
As of July 31, 2019
|
||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Cash Equivalents
|
|
Marketable
Securities
|
|
Restricted Cash
|
||||||||||||||
Level 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market accounts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,659
|
|
|
$
|
21,234
|
|
|
$
|
—
|
|
|
$
|
15,425
|
|
Level 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. government treasury notes
|
348,463
|
|
|
1,454
|
|
|
(58
|
)
|
|
349,859
|
|
|
—
|
|
|
349,859
|
|
|
—
|
|
|||||||
U.S. government agencies
|
66,153
|
|
|
222
|
|
|
(22
|
)
|
|
66,353
|
|
|
—
|
|
|
66,353
|
|
|
—
|
|
|||||||
Corporate debt securities
|
427,362
|
|
|
2,685
|
|
|
(111
|
)
|
|
429,936
|
|
|
1,029
|
|
|
428,907
|
|
|
—
|
|
|||||||
Foreign government bonds
|
8,480
|
|
|
100
|
|
|
—
|
|
|
8,580
|
|
|
—
|
|
|
8,580
|
|
|
—
|
|
|||||||
Asset-backed securities
|
59,504
|
|
|
329
|
|
|
(11
|
)
|
|
59,822
|
|
|
—
|
|
|
59,822
|
|
|
—
|
|
|||||||
Total
|
$
|
909,962
|
|
|
$
|
4,790
|
|
|
$
|
(202
|
)
|
|
$
|
951,209
|
|
|
$
|
22,263
|
|
|
$
|
913,521
|
|
|
$
|
15,425
|
|
|
As of July 31, 2019
|
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
Due within one year
|
$
|
336,156
|
|
|
$
|
336,736
|
|
Due in one to five years
|
572,777
|
|
|
576,785
|
|
||
Total
|
$
|
908,933
|
|
|
$
|
913,521
|
|
|
Less than 12 months
|
|
Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value |
|
Unrealized
Loss |
|
Fair
Value |
|
Unrealized
Loss |
||||||||||||
U.S. government treasury notes
|
$
|
27,887
|
|
|
$
|
(30
|
)
|
|
$
|
9,737
|
|
|
$
|
(28
|
)
|
|
$
|
37,624
|
|
|
$
|
(58
|
)
|
U.S. government agencies
|
5,215
|
|
|
(7
|
)
|
|
9,183
|
|
|
(15
|
)
|
|
14,398
|
|
|
(22
|
)
|
||||||
Corporate debt securities
|
38,856
|
|
|
(28
|
)
|
|
43,245
|
|
|
(83
|
)
|
|
82,101
|
|
|
(111
|
)
|
||||||
Asset-backed securities
|
9,399
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
9,399
|
|
|
(11
|
)
|
||||||
Total
|
$
|
81,357
|
|
|
$
|
(76
|
)
|
|
$
|
62,165
|
|
|
$
|
(126
|
)
|
|
$
|
143,522
|
|
|
$
|
(202
|
)
|
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||
Raw materials
|
$
|
3,349
|
|
|
$
|
2,623
|
|
Finished goods
|
41,338
|
|
|
33,197
|
|
||
Inventory
|
$
|
44,687
|
|
|
$
|
35,820
|
|
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||
Test equipment
|
$
|
170,930
|
|
|
$
|
191,846
|
|
Computer equipment and software
|
117,330
|
|
|
135,178
|
|
||
Furniture and fixtures
|
6,980
|
|
|
7,732
|
|
||
Leasehold improvements
|
34,286
|
|
|
37,866
|
|
||
Total property and equipment
|
329,526
|
|
|
372,622
|
|
||
Less: accumulated depreciation and amortization
|
(204,173
|
)
|
|
(241,574
|
)
|
||
Property and equipment, net
|
$
|
125,353
|
|
|
$
|
131,048
|
|
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||||||||||||||||||
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Technology patents
|
$
|
10,125
|
|
|
$
|
(6,572
|
)
|
|
$
|
3,553
|
|
|
$
|
19,125
|
|
|
$
|
(7,538
|
)
|
|
$
|
11,587
|
|
Developed technology
|
17,700
|
|
|
(1,135
|
)
|
|
16,565
|
|
|
56,100
|
|
|
(4,028
|
)
|
|
52,072
|
|
||||||
Intangible assets, net
|
$
|
27,825
|
|
|
$
|
(7,707
|
)
|
|
$
|
20,118
|
|
|
$
|
75,225
|
|
|
$
|
(11,566
|
)
|
|
$
|
63,659
|
|
Fiscal Years Ending January 31,
|
Estimated
Future
Amortization
Expense
|
||
Remainder of 2020
|
$
|
5,402
|
|
2021
|
10,804
|
|
|
2022
|
9,846
|
|
|
2023
|
9,300
|
|
|
2024
|
9,300
|
|
|
Thereafter
|
19,007
|
|
|
Total
|
$
|
63,659
|
|
|
Amount
|
||
Balance as of January 31, 2019
|
$
|
10,997
|
|
Goodwill acquired
|
25,423
|
|
|
Balance as of July 31, 2019
|
$
|
36,420
|
|
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||
Taxes payable
|
$
|
7,146
|
|
|
$
|
4,967
|
|
Accrued marketing
|
6,173
|
|
|
11,005
|
|
||
Accrued travel and entertainment expenses
|
3,570
|
|
|
3,055
|
|
||
Acquisition consideration held back
|
3,725
|
|
|
3,725
|
|
||
Other accrued liabilities
|
19,246
|
|
|
21,938
|
|
||
Total accrued expenses and other liabilities
|
$
|
39,860
|
|
|
$
|
44,690
|
|
•
|
during any fiscal quarter commencing after the fiscal quarter ended on July 31, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day;
|
•
|
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 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate for the Notes on each such trading day;
|
•
|
if we call any or all of the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
|
•
|
upon the occurrence of specified corporate events.
|
|
As of
July 31, 2019 |
||
Liability:
|
|
||
Principal
|
$
|
575,000
|
|
Less: debt discount, net of amortization
|
(104,329
|
)
|
|
Less: debt issuance costs, net of amortization
|
(7,553
|
)
|
|
Net carrying amount of the Notes
|
$
|
463,118
|
|
|
|
||
Stockholders' equity:
|
|
||
Allocated value of the conversion feature
|
$
|
136,333
|
|
Less: debt issuance costs
|
(3,068
|
)
|
|
Additional paid-in capital
|
$
|
133,265
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
Amortization of debt discount
|
$
|
6,000
|
|
|
$
|
6,341
|
|
|
$
|
7,357
|
|
|
$
|
12,393
|
|
Amortization of debt issuance costs
|
434
|
|
|
459
|
|
|
532
|
|
|
897
|
|
||||
Total amortization of debt discount and debt issuance costs
|
6,434
|
|
|
6,800
|
|
|
7,889
|
|
|
13,290
|
|
||||
Contractual interest expense
|
181
|
|
|
181
|
|
|
224
|
|
|
358
|
|
||||
Total interest expense related to the Notes
|
$
|
6,615
|
|
|
$
|
6,981
|
|
|
$
|
8,113
|
|
|
$
|
13,648
|
|
|
|
|
|
|
|
|
|
||||||||
Effective interest rate of the liability component
|
5.6
|
%
|
|
5.6
|
%
|
|
5.6
|
%
|
|
5.6
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
July 31, 2019
|
|
July 31, 2019
|
||||
Fixed operating lease cost
|
$
|
8,228
|
|
|
$
|
16,711
|
|
Variable lease cost (1)
|
2,242
|
|
|
4,342
|
|
||
Short-term lease cost (12 months or less)
|
1,484
|
|
|
2,345
|
|
||
Total lease cost
|
$
|
11,954
|
|
|
$
|
23,398
|
|
Fiscal Years Ending January 31,
|
Operating Leases
|
||
The remainder of 2020
|
$
|
16,579
|
|
2021
|
33,269
|
|
|
2022
|
26,781
|
|
|
2023
|
21,478
|
|
|
2024
|
15,434
|
|
|
Thereafter
|
31,236
|
|
|
Total future lease payments
|
144,777
|
|
|
Less: imputed interest
|
(23,831
|
)
|
|
Present value of lease liabilities
|
$
|
120,946
|
|
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
|
$
|
16,167
|
|
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
3,449
|
|
Weighted-average remaining lease term (years)
|
5.28
|
|
|
Weighted-average discount rate
|
6.46
|
%
|
Year Ending January 31,
|
Operating Leases
|
||
2020
|
$
|
31,297
|
|
2021
|
28,573
|
|
|
2022
|
24,381
|
|
|
2023
|
20,440
|
|
|
2024
|
14,780
|
|
|
Thereafter
|
30,096
|
|
|
Total
|
$
|
149,567
|
|
|
Options Outstanding
|
|||||||||||
|
Number of
Shares
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual Life (In Years)
|
|
Aggregate
Intrinsic
Value (in thousands)
|
|||||
Balance as of January 31, 2019
|
35,465,543
|
|
|
$
|
8.34
|
|
|
5.4
|
|
$
|
339,591
|
|
Options exercised
|
(3,862,965
|
)
|
|
4.99
|
|
|
|
|
|
|
||
Options forfeited/canceled
|
(343,662
|
)
|
|
15.49
|
|
|
|
|
|
|
||
Balance as of July 31, 2019
|
31,258,916
|
|
|
$
|
8.67
|
|
|
3.9
|
|
$
|
218,450
|
|
Vested and exercisable as of July 31, 2019
|
25,407,263
|
|
|
$
|
7.54
|
|
|
4.8
|
|
$
|
203,215
|
|
|
Number of RSUs Outstanding
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Aggregate
Intrinsic Value (in thousands) |
|||||
Unvested balance as of January 31, 2019
|
21,917,550
|
|
|
$
|
17.94
|
|
|
$
|
392,515
|
|
Granted
|
8,792,982
|
|
|
19.81
|
|
|
|
|
||
Vested
|
(4,352,885
|
)
|
|
16.38
|
|
|
|
|
||
Forfeited
|
(1,324,694
|
)
|
|
18.47
|
|
|
|
|
||
Unvested balance as of July 31, 2019
|
25,032,953
|
|
|
$
|
18.84
|
|
|
$
|
378,999
|
|
|
Number of Restricted Stock Outstanding
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Aggregate
Intrinsic Value (in thousands) |
|||||
Unvested balance as of January 31, 2019
|
2,267,569
|
|
|
$
|
18.70
|
|
|
$
|
40,612
|
|
Granted
|
1,399,688
|
|
|
20.30
|
|
|
|
|||
Vested
|
(843,321
|
)
|
|
19.85
|
|
|
|
|||
Unvested balance as of July 31, 2019
|
2,823,936
|
|
|
$
|
19.25
|
|
|
$
|
42,754
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
Cost of revenue—product
|
$
|
720
|
|
|
$
|
954
|
|
|
$
|
1,328
|
|
|
$
|
1,931
|
|
Cost of revenue—support subscription
|
2,929
|
|
|
3,633
|
|
|
5,613
|
|
|
7,584
|
|
||||
Research and development
|
22,232
|
|
|
29,108
|
|
|
43,322
|
|
|
57,353
|
|
||||
Sales and marketing
|
17,269
|
|
|
16,055
|
|
|
31,209
|
|
|
34,369
|
|
||||
General and administrative
|
10,504
|
|
|
8,654
|
|
|
16,137
|
|
|
19,324
|
|
||||
Total stock-based compensation expense
|
$
|
53,654
|
|
|
$
|
58,404
|
|
|
$
|
97,609
|
|
|
$
|
120,561
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(60,123
|
)
|
|
$
|
(66,018
|
)
|
|
$
|
(124,427
|
)
|
|
$
|
(166,354
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
229,359
|
|
|
251,298
|
|
|
226,609
|
|
|
248,366
|
|
||||
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.26
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.67
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||
Stock options to purchase common stock
|
40,920
|
|
|
31,739
|
|
|
42,923
|
|
|
32,852
|
|
Unvested RSUs
|
19,957
|
|
|
25,513
|
|
|
19,486
|
|
|
24,743
|
|
Restricted stock and early exercised stock options subject to repurchase
|
3,327
|
|
|
2,917
|
|
|
2,585
|
|
|
2,777
|
|
Shares related to Notes
|
21,884
|
|
|
21,884
|
|
|
13,783
|
|
|
21,884
|
|
Shares issuable pursuant to ESPP
|
1,154
|
|
|
720
|
|
|
1,127
|
|
|
720
|
|
Total
|
87,242
|
|
|
82,773
|
|
|
79,904
|
|
|
82,976
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
Interest income (1)
|
$
|
4,783
|
|
|
$
|
6,772
|
|
|
$
|
6,654
|
|
|
$
|
13,606
|
|
Interest expense (2)
|
(6,615
|
)
|
|
(6,981
|
)
|
|
(8,113
|
)
|
|
(13,648
|
)
|
||||
Foreign currency transactions losses
|
(2,273
|
)
|
|
(443
|
)
|
|
(4,407
|
)
|
|
(2,426
|
)
|
||||
Other income
|
73
|
|
|
—
|
|
|
835
|
|
|
—
|
|
||||
Total other income (expense), net
|
$
|
(4,032
|
)
|
|
$
|
(652
|
)
|
|
$
|
(5,031
|
)
|
|
$
|
(2,468
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
229,760
|
|
|
$
|
294,596
|
|
|
$
|
414,678
|
|
|
$
|
523,535
|
|
Rest of the world
|
79,124
|
|
|
101,731
|
|
|
150,151
|
|
|
199,492
|
|
||||
Total revenue
|
$
|
308,884
|
|
|
$
|
396,327
|
|
|
$
|
564,829
|
|
|
$
|
723,027
|
|
|
As of
January 31, 2019 |
|
As of
July 31, 2019 |
||||
|
|
|
|
||||
United States
|
$
|
120,876
|
|
|
$
|
121,454
|
|
Rest of the world
|
4,477
|
|
|
9,594
|
|
||
Total long-lived assets
|
$
|
125,353
|
|
|
$
|
131,048
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
$
|
241,137
|
|
|
$
|
300,128
|
|
|
$
|
436,586
|
|
|
$
|
538,869
|
|
Support subscription
|
67,747
|
|
|
96,199
|
|
|
128,243
|
|
|
184,158
|
|
||||
Total revenue
|
308,884
|
|
|
396,327
|
|
|
564,829
|
|
|
723,027
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Product (1)
|
78,262
|
|
|
92,870
|
|
|
144,682
|
|
|
169,462
|
|
||||
Support subscription (1)
|
24,457
|
|
|
35,138
|
|
|
47,667
|
|
|
68,859
|
|
||||
Total cost of revenue
|
102,719
|
|
|
128,008
|
|
|
192,349
|
|
|
238,321
|
|
||||
Gross profit
|
206,165
|
|
|
268,319
|
|
|
372,480
|
|
|
484,706
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development (1)
|
84,031
|
|
|
107,020
|
|
|
162,523
|
|
|
212,095
|
|
||||
Sales and marketing (1)
|
143,749
|
|
|
186,188
|
|
|
266,116
|
|
|
352,814
|
|
||||
General and administrative (1)
|
33,591
|
|
|
40,016
|
|
|
60,921
|
|
|
82,126
|
|
||||
Total operating expenses
|
261,371
|
|
|
333,224
|
|
|
489,560
|
|
|
647,035
|
|
||||
Loss from operations
|
(55,206
|
)
|
|
(64,905
|
)
|
|
(117,080
|
)
|
|
(162,329
|
)
|
||||
Other income (expense), net
|
(4,032
|
)
|
|
(652
|
)
|
|
(5,031
|
)
|
|
(2,468
|
)
|
||||
Loss before provision for income taxes
|
(59,238
|
)
|
|
(65,557
|
)
|
|
(122,111
|
)
|
|
(164,797
|
)
|
||||
Income tax provision
|
885
|
|
|
461
|
|
|
2,316
|
|
|
1,557
|
|
||||
Net loss
|
$
|
(60,123
|
)
|
|
$
|
(66,018
|
)
|
|
$
|
(124,427
|
)
|
|
$
|
(166,354
|
)
|
(1)
|
Includes stock-based compensation expense as follows (in thousands):
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cost of revenue—product
|
$
|
720
|
|
|
$
|
954
|
|
|
$
|
1,328
|
|
|
$
|
1,931
|
|
Cost of revenue—support subscription
|
2,929
|
|
|
3,633
|
|
|
5,613
|
|
|
7,584
|
|
||||
Research and development
|
22,232
|
|
|
29,108
|
|
|
43,322
|
|
|
57,353
|
|
||||
Sales and marketing
|
17,269
|
|
|
16,055
|
|
|
31,209
|
|
|
34,369
|
|
||||
General and administrative
|
10,504
|
|
|
8,654
|
|
|
16,137
|
|
|
19,324
|
|
||||
Total stock-based compensation expense
|
$
|
53,654
|
|
|
$
|
58,404
|
|
|
$
|
97,609
|
|
|
$
|
120,561
|
|
|
Three Months Ended
July 31, |
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
||||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Product revenue
|
$
|
241,137
|
|
|
$
|
300,128
|
|
|
$
|
58,991
|
|
|
24
|
%
|
|
$
|
436,586
|
|
|
$
|
538,869
|
|
|
$
|
102,283
|
|
|
23
|
%
|
Support subscription revenue
|
67,747
|
|
|
96,199
|
|
|
28,452
|
|
|
42
|
%
|
|
128,243
|
|
|
184,158
|
|
|
55,915
|
|
|
44
|
%
|
||||||
Total revenue
|
$
|
308,884
|
|
|
$
|
396,327
|
|
|
$
|
87,443
|
|
|
28
|
%
|
|
$
|
564,829
|
|
|
$
|
723,027
|
|
|
$
|
158,198
|
|
|
28
|
%
|
|
Three Months Ended
July 31, |
|
Change
|
|
Six Months Ended
July 31, |
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
||||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Product cost of revenue
|
$
|
78,262
|
|
|
$
|
92,870
|
|
|
$
|
14,608
|
|
|
19
|
%
|
|
$
|
144,682
|
|
|
$
|
169,462
|
|
|
$
|
24,780
|
|
|
17
|
%
|
Support subscription cost of revenue
|
24,457
|
|
|
35,138
|
|
|
10,681
|
|
|
44
|
%
|
|
47,667
|
|
|
68,859
|
|
|
21,192
|
|
|
44
|
%
|
||||||
Total cost of revenue
|
$
|
102,719
|
|
|
$
|
128,008
|
|
|
$
|
25,289
|
|
|
25
|
%
|
|
$
|
192,349
|
|
|
$
|
238,321
|
|
|
$
|
45,972
|
|
|
24
|
%
|
Product gross margin
|
67.5
|
%
|
|
69.1
|
%
|
|
|
|
|
|
|
|
66.9
|
%
|
|
68.6
|
%
|
|
|
|
|
||||||||
Support subscription gross margin
|
63.9
|
%
|
|
63.5
|
%
|
|
|
|
|
|
|
|
62.8
|
%
|
|
62.6
|
%
|
|
|
|
|
||||||||
Total gross margin
|
66.7
|
%
|
|
67.7
|
%
|
|
|
|
|
|
|
|
65.9
|
%
|
|
67.0
|
%
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
||||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Research and development
|
$
|
84,031
|
|
|
$
|
107,020
|
|
|
$
|
22,989
|
|
|
27
|
%
|
|
$
|
162,523
|
|
|
$
|
212,095
|
|
|
$
|
49,572
|
|
|
31
|
%
|
|
Three Months Ended July 31,
|
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
||||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and marketing
|
$
|
143,749
|
|
|
$
|
186,188
|
|
|
$
|
42,439
|
|
|
30
|
%
|
|
$
|
266,116
|
|
|
$
|
352,814
|
|
|
$
|
86,698
|
|
|
33
|
%
|
|
Three Months Ended July 31,
|
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
||||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
33,591
|
|
|
$
|
40,016
|
|
|
$
|
6,425
|
|
|
19
|
%
|
|
$
|
60,921
|
|
|
$
|
82,126
|
|
|
$
|
21,205
|
|
|
35
|
%
|
|
Three Months Ended July 31,
|
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
2018
|
|
2019
|
|
$
|
||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other income (expense), net
|
$
|
(4,032
|
)
|
|
$
|
(652
|
)
|
|
$
|
3,380
|
|
|
$
|
(5,031
|
)
|
|
$
|
(2,468
|
)
|
|
$
|
2,563
|
|
|
Three Months Ended July 31,
|
|
Change
|
|
Six Months Ended July 31,
|
|
Change
|
|||||||||||||||||||||
|
2018
|
|
2019
|
|
$
|
|
%
|
|
2018
|
|
2019
|
|
$
|
|
%
|
|||||||||||||
(dollars in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax provision
|
$
|
885
|
|
|
$
|
461
|
|
|
$
|
(424
|
)
|
|
(48
|
)%
|
|
$
|
2,316
|
|
|
$
|
1,557
|
|
|
$
|
(759
|
)
|
|
(33)%
|
|
Six Months Ended July 31,
|
||||||
|
2018
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
27,080
|
|
|
$
|
55,459
|
|
Net cash used in investing activities
|
$
|
(425,862
|
)
|
|
$
|
(267,483
|
)
|
Net cash provided by financing activities
|
$
|
526,197
|
|
|
$
|
32,574
|
|
•
|
maintain and extend our product leadership;
|
•
|
recruit, hire, train and manage qualified personnel, including sales personnel;
|
•
|
maintain and further develop our partner relationships;
|
•
|
enhance and expand our distribution and supply chain infrastructure;
|
•
|
expand our support capabilities;
|
•
|
forecast and control expenses;
|
•
|
enhance and expand our international operations; and
|
•
|
implement, improve and maintain our internal systems, procedures and controls.
|
•
|
greater name and brand recognition and longer operating histories;
|
•
|
larger sales and marketing and customer support budgets and resources;
|
•
|
broader distribution and established relationships with distribution partners and customers;
|
•
|
the ability to bundle storage products with other products and services to address customers’ requirements;
|
•
|
greater resources to make acquisitions;
|
•
|
larger and more mature product and intellectual property portfolios; and
|
•
|
substantially greater financial, technical and other resources.
|
•
|
demand for our products;
|
•
|
sales and marketing initiatives, discount levels, rebates and competitive pricing;
|
•
|
changes in customer, geographic or product mix, including mix of product configurations;
|
•
|
the cost of components, including NAND flash and DRAM, and freight;
|
•
|
new product introductions and enhancements, potentially with initial sales at relatively small volumes and higher product costs;
|
•
|
excess inventory levels or purchase obligations as a result of changes in demand forecasts or product transitions;
|
•
|
an increase in product returns, order rescheduling and cancellations;
|
•
|
the timing of technical support service contracts and contract renewals;
|
•
|
inventory stocking requirements to mitigate supply constraints, accommodate unforeseen demand or support new product introductions; and
|
•
|
product quality and serviceability issues.
|
•
|
the timing and magnitude of orders, shipments and acceptance of our products in any quarter, including product returns, order rescheduling and cancellations by our customers;
|
•
|
fluctuations in demand and prices for our products;
|
•
|
seasonality in our business or the markets we serve;
|
•
|
our ability to control the costs of the components we use in our hardware products;
|
•
|
our ability to timely adopt subsequent generations of components into our hardware products;
|
•
|
disruption in our supply chains, component availability and related procurement costs;
|
•
|
reductions in customers’ budgets for IT purchases;
|
•
|
changes in industry standards in the data storage industry;
|
•
|
our ability to develop, introduce and ship in a timely manner new products and product enhancements that meet customer requirements;
|
•
|
our ability to effectively manage product transitions as we introduce new products;
|
•
|
any change in the competitive dynamics of our markets, including new entrants or discounting of product prices;
|
•
|
our ability to control costs, including our operating expenses; and
|
•
|
future accounting pronouncements and changes in accounting policies.
|
•
|
exposure to foreign currency exchange rate risk;
|
•
|
difficulties in collecting payments internationally, and managing and staffing international operations;
|
•
|
establishing relationships with channel partners in international locations;
|
•
|
increased travel, infrastructure and legal compliance costs associated with international locations;
|
•
|
burdens of complying with a wide variety of laws associated with international operations, including taxes and customs;
|
•
|
significant fines, penalties and collateral consequences if we or our partners fail to comply with anti-bribery laws;
|
•
|
heightened risk of improper, unfair or corrupt business practices in certain geographies;
|
•
|
potentially adverse tax consequences, including repatriation of earnings;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
political, social and economic instability abroad, terrorist attacks and security concerns in general; and
|
•
|
reduced or varied protection for intellectual property rights in some countries.
|
•
|
the inability to obtain an adequate supply of key components, including solid-state drives;
|
•
|
price volatility for the components of our products;
|
•
|
failure of a supplier to meet our quality or production requirements;
|
•
|
failure of a supplier of key components to remain in business or adjust to market conditions; and
|
•
|
consolidation among suppliers, resulting in some suppliers exiting the industry or discontinuing the manufacture of components.
|
•
|
Selling to governmental agencies can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale;
|
•
|
Government certification requirements applicable to our products may change and in doing so restrict our ability to sell into the U.S. federal government sector until we have attained the revised certification;
|
•
|
Government demand and payment for our products and services may be impacted by public sector budgetary cycles and funding authorizations, including in connection with an extended federal government shutdown, with funding reductions or delays adversely affecting public sector demand for our products and services;
|
•
|
We sell our products to governmental agencies through our channel partners, and these agencies may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such termination may adversely impact our future results of operations; and
|
•
|
Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our products, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit uncovers improper or illegal activities
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;
|
•
|
actual or anticipated changes in our results of operations or fluctuations in our operating results;
|
•
|
whether our operating results meet the expectations of securities analysts or investors;
|
•
|
issuance or new or updated research or reports by securities analysts, including the publication of unfavorable reports or change in recommendation or downgrading of our Class A common stock;
|
•
|
actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;
|
•
|
litigation involving us, our industry or both;
|
•
|
general economic conditions and trends;
|
•
|
major catastrophic events;
|
•
|
sales of large blocks of our stock; or
|
•
|
departures of key personnel.
|
•
|
establish a classified board of directors so that not all members of our board of directors are elected at one time;
|
•
|
authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;
|
•
|
prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
prohibit stockholders from calling a special meeting of our stockholders;
|
•
|
provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and
|
•
|
establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
|
|
|
|
|
|
Incorporation By Reference
|
|
|
||||
Exhibit
Number
|
|
Description
|
|
|
Form
|
|
SEC File No.
|
|
Exhibit
|
|
Filing Date
|
3.1
|
|
|
|
10-Q
|
|
001-37570
|
|
3.1
|
|
12/11/2015
|
|
3.2
|
|
|
|
S-1
|
|
333-206312
|
|
3.4
|
|
9/9/2015
|
|
4.1
|
|
|
|
S-1
|
|
333-206312
|
|
4.1
|
|
9/9/2015
|
|
4.2
|
|
|
|
8-K
|
|
001-37570
|
|
4.1
|
|
4/10/2018
|
|
4.3
|
|
|
|
8-K
|
|
001-37570
|
|
4.2
|
|
4/10/2018
|
|
4.4
|
|
Reference is made to Exhibits 3.1 and 3.2
|
|
|
|
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
|
99.1
|
|
|
|
8-K
|
|
001-37570
|
|
99.1
|
|
4/10/2018
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
PURE STORAGE, INC.
|
|
|
|
|
|
Date:
|
August 30, 2019
|
By:
|
/s/ CHARLES GIANCARLO
|
|
|
|
Charles Giancarlo
|
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
|
Date:
|
August 30, 2019
|
By:
|
/s/ TIMOTHY RIITTERS
|
|
|
|
Timothy Riitters
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1.
|
GENERAL; PURPOSE.
|
2.
|
ADMINISTRATION.
|
(iv)
|
To settle all controversies regarding the Plan and Purchase Rights granted under
|
(v)
|
To suspend or terminate the Plan at any time as provided in Section 12.
|
(vi)
|
To amend the Plan at any time as provided in Section 12.
|
3.
|
SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
|
4.
|
GRANT OF PURCHASE RIGHTS; OFFERING.
|
5.
|
ELIGIBILITY.
|
6.
|
PURCHASE RIGHTS; PURCHASE PRICE.
|
7.
|
PARTICIPATION; WITHDRAWAL; TERMINATION.
|
8.
|
EXERCISE OF PURCHASE RIGHTS.
|
9.
|
COVENANTS OF THE COMPANY.
|
10.
|
DESIGNATION OF BENEFICIARY.
|
11.
|
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.
|
12.
|
AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.
|
13.
|
SECTION 409A OF THE CODE; TAX QUALIFICATION.
|
14.
|
EFFECTIVE DATE OF PLAN.
|
15.
|
MISCELLANEOUS PROVISIONS.
|
16.
|
DEFINITIONS.
|
(c)
|
“Board” means the Board of Directors of the Company.
|
(i)
|
“Company” means Pure Storage, Inc., a Delaware corporation.
|
(ii)
|
a sale or other disposition of at least 90% of the outstanding securities of the
|
(o)
|
“Director” means a member of the Board.
|
(x)
|
“Offering Date” means a date selected by the Board for an Offering to commence.
|
(z)
|
“Participant” means an Eligible Employee who holds an outstanding Purchase Right.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Pure Storage, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer(s) 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:
|
(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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
The registrant’s other certifying officer(s) 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):
|
(a)
|
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
|
(b)
|
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.
|
Date: August 30, 2019
|
By:
|
/s/ CHARLES GIANCARLO
|
|
|
Charles Giancarlo
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Pure Storage, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer(s) 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 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:
|
(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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
The registrant’s other certifying officer(s) 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):
|
(a)
|
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
|
(b)
|
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.
|
Date: August 30, 2019
|
By:
|
/s/ TIMOTHY RIITTERS
|
|
|
Timothy Riitters
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Date: August 30, 2019
|
By:
|
/s/ CHARLES GIANCARLO
|
|
|
Charles Giancarlo
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 30, 2019
|
By:
|
/s/ TIMOTHY RIITTERS
|
|
|
Timothy Riitters
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|