0000950170-21-005015 | 10-Q | XBRL Viewer

Unamortized debt discount

Principal amount

$ 145,704

$ 575,000

^[1]

(48,616)

Unamortized debt issuance costs

^[1]

(692)

(2,713)

Net carrying amount

145,012

523,671

Carrying amount of equity component

^[2]

148,598

2026 Convertible Senior Notes

Non-cash interest expense converted to principal

Principal amount

750,000

18,393

8,906

Unamortized debt discount

^[3]

(195,298)

(203,619)

Unamortized debt issuance costs

^[3]

(22,314)

(23,264)

Net carrying amount

550,781

$ 532,023

2027 Convertible Senior Notes

Unamortized debt issuance costs

Principal amount

575,000

^[4]

(9,137)

Net carrying amount

$ 565,863

[1]	Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2023 Notes using the effective interest rate method. As of July 31, 2021, the effective interest rate was 6.62%. As of October 31, 2021, the effective interest rate was 0.41%.
[2]	Included in the consolidated balance sheet as of July 31, 2021 within additional paid-in capital, net of $3.0 million in equity issuance costs.
[3]	Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05%.
[4]	Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2027 Notes using the effective interest rate method. The effective interest rate is 0.52%.

Convertible Senior Notes - Net Proceeds from Notes (Details) - 2023 Convertible Senior Notes - USD ($) $ in Thousands	1 Months Ended
	Jan. 31, 2018	Oct. 31, 2021	Jul. 31, 2021
Debt Instrument [Line Items]
Less: cost of the bond hedges	$ (143,200)
Add: proceeds from the sale of warrants	88,000
Convertible Debt
Debt Instrument [Line Items]
Principal amount	575,000	$ 145,704	$ 575,000
Less: initial purchasers' discount	(10,781)
Less: cost of the bond hedges	(143,175)
Add: proceeds from the sale of warrants	87,975
Less: other issuance costs	(707)
Net proceeds	$ 508,312

Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid operating expenses	$ 28,509	$ 36,455
VAT receivables	7,684	8,290
Other current assets	12,689	12,071
Total prepaid expenses and other current assets	$ 48,882	$ 56,816

Revenue, Deferred Revenue and Deferred Commissions - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenue	$ 378,517	$ 312,754
Movement in Deferred Revenue [Roll Forward]
Deferred revenue, beginning balance	1,312,923
Additions	398,928
Revenue/commissions recognized	(378,517)
Deferred revenue, ending balance	1,333,334
Amount deferred in prior period	183,300	142,700
Contracted revenue not recognized	$ 1,400,000
Percent expected to be recognized in next year	51.00%
Ratable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenue	$ 183,100	147,800
Upfront
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenue	$ 154,800	$ 130,400
Minimum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Software, license term	1 year
Maximum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Software, license term	5 years

Balance Sheet Components - Schedule of Investments in Marketable Debt Securities, by Contractual Maturity Date (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Debt Securities, Available-for-sale, Maturity, Fair Value, Rolling Maturity [Abstract]
Due within one year	$ 726,911
Due in one to two years	198,205
Total	$ 925,116	$ 928,006

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (419,852)	$ (265,048)
Other comprehensive loss, net of tax:
Change in unrealized loss on available-for-sale securities, net of tax	(651)	(1,150)
Comprehensive loss	$ (420,503)	$ (266,198)

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Equity Incentive Plans - RSU (Details) shares in Thousands	3 Months Ended
Equity Incentive Plans - RSU (Details) shares in Thousands	Oct. 31, 2021 $ / shares shares
Grant Date Fair Value per Share
Released (in dollars per share) \| $ / shares	$ 31.31
Forfeited (in dollars per share) \| $ / shares	33.66
Ending Outstanding (in dollars per share) \| $ / shares	$ 32.74
RSUs
Number of Shares
Outstanding, beginning balance (in shares) \| shares	21,708
Granted (in shares) \| shares	8,347
Released (in shares) \| shares	(2,537)
Forfeited (in shares) \| shares	(976)
Outstanding, ending balance (in shares) \| shares	26,542
Grant Date Fair Value per Share
Beginning Outstanding (in dollars per share) \| $ / shares	$ 30.98
Granted (in dollars per share) \| $ / shares	$ 37.00

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 4,047	$ 4,243

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Balance Sheet Components - Schedule of Property and Equipment, Net (Parenthetical) (Details) $ in Millions	3 Months Ended
	Oct. 31, 2020 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Impairment of leasehold	$ 0.9

Segment Information

3 Months Ended

Oct. 31, 2021

Segment Reporting [Abstract]

Segment Information

NOTE 12. SEGMENT INFORMATION

Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we have a single reportable segment.

The following table sets forth revenue by geographic location based on bill-to location:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
U.S.	$	177,113	$	217,150
Europe, the Middle East and Africa		59,906		83,995
Asia Pacific		62,598		65,683
Other Americas		13,137		11,689
Total revenue	$	312,754	$	378,517

The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
United States	$	86,468	$	78,081
International		45,153		42,515
Total long-lived assets	$	131,621	$	120,596

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Net Loss Per Share - Antidilutive Securities (Details) - shares	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	71,406,000	32,786,000
Outstanding stock options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	29,602,000	29,710,000
Employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,836,000	2,823,000
Common stock issuable upon the conversion of the Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	39,968,000	0
Contingently issuable shares pursuant to acquisitions
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	253,000

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Stockholders' equity, beginning balance at Jul. 31, 2020	$ (274,977)	$ 5	$ 2,245,180	$ 2,030	$ (2,522,192)
Stockholders' equity, beginning balance (in shares) at Jul. 31, 2020		201,949
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock through employee equity incentive plans	1,631		1,631
Issuance of common stock through employee equity incentive plans, net of repurchases (in shares)		3,117
Issuance of common stock from ESPP purchase	18,070		18,070
Issuance of common stock from ESPP purchase (in shares)		1,456
Repurchase and retirement of common stock	(125,079)		(54,176)		(70,903)
Repurchase and retirement of common stock (in shares)		(5,176)
Stock-based compensation	89,198		89,198
Other comprehensive loss	(1,150)			(1,150)
Net loss	(265,048)				(265,048)
Stockholders' equity, ending balance at Oct. 31, 2020	(557,355)	$ 5	2,299,903	880	(2,858,143)
Stockholders' equity, ending balance (in shares) at Oct. 31, 2020		201,346
Stockholders' equity, beginning balance at Jul. 31, 2021	(1,012,041)	$ 5	2,615,317	(8)	(3,627,355)
Stockholders' equity, beginning balance (ASU 2020-06) at Jul. 31, 2021	$ (48,013)		(148,598)		100,585
Stockholders' equity, beginning balance (in shares) at Jul. 31, 2021	214,210	214,210
Increase (Decrease) in Stockholders' Equity [Roll Forward]
2026 Notes derivative liability reclassification	$ 698,213		698,213
Issuance of common stock through employee equity incentive plans	1,352		1,352
Issuance of common stock through employee equity incentive plans, net of repurchases (in shares)		2,809
Issuance of common stock from ESPP purchase	28,786		28,786
Issuance of common stock from ESPP purchase (in shares)		1,309
Repurchase and retirement of common stock	(58,570)		(14,852)		(43,718)
Repurchase and retirement of common stock (in shares)		(1,369)
Unwinding of 2023 Notes hedges	39,880		39,880
Unwinding of 2023 Notes warrants	(18,390)		(18,390)
Stock-based compensation	90,547		90,547
Other comprehensive loss	(651)			(651)
Net loss	(419,852)				(419,852)
Stockholders' equity, ending balance at Oct. 31, 2021	$ (698,739)	$ 5	$ 3,292,255	$ (659)	$ (3,990,340)
Stockholders' equity, ending balance (in shares) at Oct. 31, 2021	216,959	216,959

Stockholders' Equity

3 Months Ended

Oct. 31, 2021

Equity [Abstract]

Stockholders' Equity

NOTE 8. STOCKHOLDERS’ EQUITY

We have two classes of authorized common stock, Class A common stock and Class B common stock. As of October 31, 2021, we had one billion shares of Class A common stock authorized, with a par value of $0.000025 per share, and 200 million shares of Class B common stock authorized, with a par value of $0.000025 per share. As of October 31, 2021, we had 211.4 million shares of Class A common stock issued and outstanding and 5.6 million shares of Class B common stock issued and outstanding.

Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Holders of Class B common stock are entitled to 10 votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of our Class A common stock upon a sale or transfer. Shares issued in connection with exercises of stock options, vesting of restricted stock units, or shares purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Shares issued in connection with an exercise of common stock warrants are converted into shares of our Class B common stock.

In August 2020, our Board of Directors authorized the repurchase of up to $125.0 million of our Class A common stock. Repurchases were made through open market purchases or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program did not obligate us to acquire any particular amount of our common stock, and could have been suspended at any time at our discretion.

During the three months ended October 31, 2020, we repurchased 5.2 million shares of Class A common stock in open market transactions at an average price of $24.15 per share, for an aggregate purchase price of $125.0 million. As of October 31, 2021, there was no remaining authorization and the program had expired.

In September 2021, we used approximately $58.5 million of the net cash proceeds from the issuance of $97.7 million in aggregate principal amount of 2027 Notes to repurchase 1.4 million shares of Class A common stock in open market transactions at an average price of $42.77 per share. For additional details on these transactions, refer to Note 5.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Reported Value Measurement

Fair Value Measurements - Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Financial Assets:
Short-term investments:	$ 925,116	$ 928,006
Recurring
Financial Assets:
Total measured at fair value	1,042,420	1,032,588
Cash	233,681	181,141
Total cash, cash equivalents and short-term investments	1,276,101	1,213,729
Recurring \| Money market funds
Financial Assets:
Cash equivalents:	107,304	72,583
Recurring \| Commercial paper
Financial Assets:
Cash equivalents:	10,000	29,997
Short-term investments:	346,347	347,088
Recurring \| Corporate bonds
Financial Assets:
Cash equivalents:		2,002
Short-term investments:	517,494	513,688
Recurring \| U.S. government securities
Financial Assets:
Short-term investments:	61,275	67,230
Recurring \| Level I
Financial Assets:
Total measured at fair value	107,304	72,583
Recurring \| Level I \| Money market funds
Financial Assets:
Cash equivalents:	107,304	72,583
Recurring \| Level I \| Commercial paper
Financial Assets:
Cash equivalents:	0	0
Short-term investments:	0	0
Recurring \| Level I \| Corporate bonds
Financial Assets:
Cash equivalents:		0
Short-term investments:	0	0
Recurring \| Level I \| U.S. government securities
Financial Assets:
Short-term investments:	0	0
Recurring \| Level II
Financial Assets:
Total measured at fair value	935,116	960,005
Recurring \| Level II \| Money market funds
Financial Assets:
Cash equivalents:	0	0
Recurring \| Level II \| Commercial paper
Financial Assets:
Cash equivalents:	10,000	29,997
Short-term investments:	346,347	347,088
Recurring \| Level II \| Corporate bonds
Financial Assets:
Cash equivalents:		2,002
Short-term investments:	517,494	513,688
Recurring \| Level II \| U.S. government securities
Financial Assets:
Short-term investments:	61,275	67,230
Recurring \| Level III
Financial Assets:
Total measured at fair value	0	0
Recurring \| Level III \| Money market funds
Financial Assets:
Cash equivalents:	0	0
Recurring \| Level III \| Commercial paper
Financial Assets:
Cash equivalents:	0	0
Short-term investments:	0	0
Recurring \| Level III \| Corporate bonds
Financial Assets:
Cash equivalents:		0
Short-term investments:	0	0
Recurring \| Level III \| U.S. government securities
Financial Assets:
Short-term investments:	$ 0	$ 0

Fair Value Measurements - Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - Convertible Debt - USD ($)
$ in Thousands

Oct. 31, 2021

Jul. 31, 2021

^[1]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement

$ 1,261,656

$ 1,055,694

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2023 Convertible Senior Notes | Reported Value Measurement

1,868,657

1,731,225

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2023 Convertible Senior Notes | Estimate of Fair Value Measurement

145,012

523,671

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2026 Convertible Senior Notes | Reported Value Measurement

150,367

602,272

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2026 Convertible Senior Notes | Estimate of Fair Value Measurement

550,781

532,023

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2027 Convertible Senior Notes | Reported Value Measurement

1,174,029

1,128,953

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

2027 Convertible Senior Notes | Estimate of Fair Value Measurement

^[2]

565,863

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

^[2]

$ 544,261

$ 0

[1]	Prior period amounts have not been adjusted due to our adoption of ASU 2020-06 under the modified retrospective method. For additional information on our adoption of ASU 2020-06, refer to Note 1 and Note 5.
[2]	The 2027 Notes were issued in September 2021.

Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Operating leases
Operating lease right-of-use assets, gross	$ 170,855	$ 170,277
Accumulated amortization	70,190	64,374
Operating lease right-of-use assets, net	100,665	105,903
Operating lease liabilities—current	43,221	42,670
Operating lease liabilities—non-current	77,675	86,599
Total lease obligation	$ 120,896	$ 129,269
Weighted average remaining lease term (in years)	2 years 10 months 24 days	3 years 1 month 6 days
Weighted average discount rate	5.50%	5.50%
Finance leases
Finance lease right-of-use assets, gross	$ 8,972
Accumulated amortization	(1,136)
Finance lease right-of-use assets, net	7,836
Finance lease liabilities-current	1,775
Finance lease liabilities-non-current	6,082
Total lease obligation	$ 7,857
Weighted average remaining lease term (in years)	4 years 4 months 24 days
Weighted average discount rate	6.70%

Segment Information - Additional information (Details) $ in Thousands	3 Months Ended
	Oct. 31, 2020 Segment	Oct. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments \| Segment	1
Long-lived assets		$ 120,596	$ 131,621
U.S.
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets		$ 78,081	$ 86,468

Leases

3 Months Ended

Oct. 31, 2021

Leases [Abstract]

Leases

NOTE 6. LEASES

We have operating leases for offices, research and development facilities and datacenters and finance leases for certain datacenter equipment. Our leases have remaining lease terms of one year to approximately seven years, some of which include options to renew or terminate. We do not include renewal options in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Our lease agreements do not contain any residual value guarantees or restrictive covenants.

Total operating lease cost was $10.4 million and $10.9 million for the three months ended October 31, 2020 and 2021, respectively, excluding short-term lease costs, variable lease costs and sublease income, each of which were not material. Variable lease costs primarily include common area maintenance charges. Total finance lease cost was $0.5 million for the three months ended October 31, 2021.

During the first quarter of fiscal 2021, we recorded impairment charges related to certain of our international office spaces, as well as an impairment charge related to an office space in the United States. We recorded a $2.8 million impairment in our condensed consolidated statement of operations for the three months ended October 31, 2020. Of the $2.8 million impairment, approximately $1.9 million relates to the impairment of our operating lease right-of-use assets and approximately $0.9 million relates to the impairment of leasehold improvements. Additional charges related to asset impairments may be recorded in the future.

Supplemental balance sheet information related to leases is as follows:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Operating leases:
Operating lease right-of-use assets, gross	$	170,277		$	170,855
Accumulated amortization		(64,374	)		(70,190	)
Operating lease right-of-use assets, net	$	105,903		$	100,665
Operating lease liabilities—current	$	42,670		$	43,221
Operating lease liabilities—non-current		86,599			77,675
Total operating lease liabilities	$	129,269		$	120,896
Weighted average remaining lease term (in years):		3.1			2.9
Weighted average discount rate:		5.5	%		5.5	%


	As of October 31, 2021
	(in thousands)
Finance leases:
Finance lease right-of-use assets, gross (1)	$	8,972
Accumulated amortization (1)		(1,136	)
Finance lease right-of-use assets, net (1)	$	7,836
Finance lease liabilities—current (2)	$	1,775
Finance lease liabilities—non-current (3)		6,082
Total finance lease liabilities	$	7,857
Weighted average remaining lease term (in years):		4.4
Weighted average discount rate:		6.7	%

(1)

Included in the condensed consolidated balance sheets within property and equipment, net.

(2)

Included in the condensed consolidated balance sheets within accrued expenses and other current liabilities.

(3)

Included in the condensed consolidated balance sheets within other liabilities—non-current.

Supplemental cash flow and other information related to leases is as follows:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,976	$	13,476
Financing cash flows from finance leases	$	—	$	219
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	9,918	$	3,950

The undiscounted cash flows for our operating lease liabilities as of October 31, 2021 were as follows:


Fiscal Year Ending July 31:	Operating Leases			Finance Leases			Total
	(in thousands)
2022 (remaining nine months)	$	36,503		$	1,373		$	37,876
2023		48,671			1,832			50,503
2024		34,057			1,832			35,889
2025		7,628			1,832			9,460
2026		2,536			1,130			3,666
Thereafter		2,596			—			2,596
Total lease payments		131,991			7,999			139,990
Less: imputed interest		(11,095	)		(142	)		(11,237	)
Total lease obligation		120,896			7,857			128,753
Less: current lease obligations		(43,221	)		(1,775	)		(44,996	)
Long-term lease obligations	$	77,675		$	6,082		$	83,757

As of October 31, 2021, we had additional operating lease commitments of approximately $1.0 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during the remainder of fiscal 2022, with lease terms of approximately two years.

Leases - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease, cost	$ 10,900	$ 10,400
Finance lease, cost	500
Impairment loss		2,822
Right-of-use asset, impairment loss		1,900
Impairment of leasehold		$ 900
Lease not yet commenced, undiscounted amount	$ 1,000
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	7 years
Lease not yet commenced, term of contract	2 years

Leases - Remaining Maturity Under Topic 842 (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Operating Leases
2022 (remaining nine months)	$ 36,503
2023	48,671
2024	34,057
2025	7,628
2026	2,536
Thereafter	2,596
Total lease payments	131,991
Less: imputed interest	(11,095)
Total lease obligation	120,896	$ 129,269
Less: current lease obligations	(43,221)	(42,670)
Long-term lease obligations	77,675	$ 86,599
Finance leases
2022 (remaining nine months)	1,373
2023	1,832
2024	1,832
2025	1,832
2026	1,130
Thereafter	0
Total lease payments	7,999
Less: imputed interest	(142)
Total lease obligation	7,857
Less: current lease obligations	(1,775)
Long-term lease obligations	6,082
Total
2022 (remaining nine months)	37,876
2023	50,503
2024	35,889
2025	9,460
2026	3,666
Thereafter	2,596
Total lease payments	139,990
Less: imputed interest	(11,237)
Total lease obligation	128,753
Less: current lease obligations	(44,996)
Long-term lease obligations	$ 83,757

Convertible Senior Notes (Tables)

3 Months Ended

Oct. 31, 2021

2023 Convertible Senior Notes

Net Proceeds from Notes

The total net proceeds from the issuance of the 2023 Notes were as follows:


	Amount
	(in thousands)
Principal amount	$	575,000
Less: initial purchasers' discount		(10,781	)
Less: cost of the bond hedges		(143,175	)
Add: proceeds from the sale of warrants		87,975
Less: other issuance costs		(707	)
Net proceeds	$	508,312

Interest Expense Recognized

Components of Notes

The 2023 Notes consisted of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	575,000		$	145,704
Unamortized debt discount (1)		(48,616	)		—
Unamortized debt issuance costs (1)		(2,713	)		(692	)
Net carrying amount	$	523,671		$	145,012
Carrying amount of equity component (2)	$	148,598		$	—

(1)

Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2023 Notes using the effective interest rate method. As of July 31, 2021, the effective interest rate was 6.62%. As of October 31, 2021, the effective interest rate was 0.41%.

(2)

Included in the consolidated balance sheet as of July 31, 2021 within additional paid-in capital, net of $3.0 million in equity issuance costs.

The following table sets forth the total interest expense recognized related to the 2023 Notes:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Interest expense related to amortization of debt discount	$	7,725	$	—
Interest expense related to amortization of debt issuance costs		431		400
Total interest expense	$	8,156	$	400

2026 Convertible Senior Notes

Interest Expense Recognized

Components of Notes

The 2026 Notes consisted of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	750,000		$	750,000
Non-cash interest expense converted to principal		8,906			18,393
Unamortized debt discount (conversion feature) (1)		(203,619	)		(195,298	)
Unamortized debt issuance costs (1)		(23,264	)		(22,314	)
Net carrying amount	$	532,023		$	550,781

(1)

Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05%.

The following table sets forth the total interest expense recognized related to the 2026 Notes:


	Three Months Ended October 31,
	2020		2021
			(in thousands)
Interest expense related to amortization of debt discount	$	3,187	$	8,320
Interest expense related to amortization of debt issuance costs		365		951
Non-cash interest expense		1,952		4,773
Total interest expense	$	5,504	$	14,044

2027 Convertible Senior Notes

Interest Expense Recognized

Components of Notes

The 2027 Notes consisted of the following:


	As of October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	575,000
Unamortized debt issuance costs (1)		(9,137	)
Net carrying amount	$	565,863

(1)

Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2027 Notes using the effective interest rate method. The effective interest rate is 0.52%.

The following table sets forth the total interest expense recognized related to the 2027 Notes:


	Three Months Ended October 31,
	2021
	(in thousands)
Contractual interest expense	$	152
Interest expense related to amortization of debt issuance costs		160
Total interest expense	$	312

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Net Loss Per Share

3 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

NOTE 11. NET LOSS PER SHARE

We adopted ASU 2020-06 on August 1, 2021 using the modified retrospective method, applicable to our convertible senior notes outstanding as of adoption. We have not changed any previously disclosed amounts or provided additional disclosures for comparative periods. ASU 2020-06 requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. Under the if-converted method, shares related to our convertible senior notes, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period.

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to potentially dilutive common stock equivalents outstanding during the period, as their effect would be dilutive. Potentially dilutive common shares include participating securities and shares issuable upon the exercise of stock options, the exercise of common stock warrants, the exercise of convertible preferred stock warrants, the vesting of RSUs and each purchase under the 2016 ESPP, under the if-converted method.

In loss periods, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive and therefore excluded.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, our undistributed earnings or losses are allocated on a proportionate basis among the holders of both Class A and Class B common stock. As a result, the net income (loss) per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

The computation of basic and diluted net loss per share attributable to Class A and Class B common stockholders is as follows:


	Three Months Ended October 31,
	2020			2021
	(in thousands, except per share data)
Numerator:
Net loss	$	(265,048	)	$	(419,852	)
Denominator:
Weighted average shares—basic and diluted		203,095			215,499
Net loss per share attributable to common stockholders— basic and diluted	$	(1.31	)	$	(1.95	)

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Outstanding stock options and RSUs		29,710		29,602
Employee stock purchase plan		2,823		1,836
Common stock issuable upon the conversion of the Notes		—		39,968
Contingently issuable shares pursuant to acquisitions		253		—
Total		32,786		71,406

Shares that will be issued in connection with our stock awards and shares that will be purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Shares issued in connection with an exercise of the common stock warrants are converted into shares of our Class B common stock and are voluntarily convertible into shares of Class A common stock at the option of the holder. Common stock issuable upon the conversion of convertible debt represents the antidilutive impact of the 2023 Notes, 2026 Notes and 2027 Notes under the if-converted method.

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Depreciation	$ 18.7	$ 19.2

Balance Sheet Components - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 92,330	$ 92,330
Less:
Accumulated amortization	(64,445)	(60,318)
Total intangible assets, net	27,885	32,012
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	79,300	79,300
Less:
Accumulated amortization	(54,241)	(50,764)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	8,860	8,860
Less:
Accumulated amortization	(6,903)	(6,513)
Trade Names
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	4,170	4,170
Less:
Accumulated amortization	$ (3,301)	$ (3,041)

Segment Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 378,517	$ 312,754
U.S.
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	217,150	177,113
Europe, the Middle East and Africa
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	83,995	59,906
Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	65,683	62,598
Other Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 11,689	$ 13,137

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Schedule of Basic and Diluted Net Loss Per Share

Overview and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands	Aug. 01, 2021	Oct. 31, 2021	Jul. 31, 2021
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle, accounting standards update, adoption date		Aug. 01, 2021
Adjustments to Additional Paid in Capital, Other	$ 148,600
Accumulated deficit	100,600	$ (3,990,340)	$ (3,627,355)
Convertible Notes Payable [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Increase in carrying value of the notes outstanding	$ 48,000
ASU 2020-06
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle, accounting standards update, adopted	true
Change in accounting principle, accounting standards update, adoption date		Aug. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect	false
ASU 2021-04
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle, accounting standards update, adopted	true
Change in accounting principle, accounting standards update, immaterial effect	true

Net Loss Per Share (Tables)

3 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

The computation of basic and diluted net loss per share attributable to Class A and Class B common stockholders is as follows:


	Three Months Ended October 31,
	2020			2021
	(in thousands, except per share data)
Numerator:
Net loss	$	(265,048	)	$	(419,852	)
Denominator:
Weighted average shares—basic and diluted		203,095			215,499
Net loss per share attributable to common stockholders— basic and diluted	$	(1.31	)	$	(1.95	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Outstanding stock options and RSUs		29,710		29,602
Employee stock purchase plan		2,823		1,836
Common stock issuable upon the conversion of the Notes		—		39,968
Contingently issuable shares pursuant to acquisitions		253		—
Total		32,786		71,406

Leases (Tables)

3 Months Ended

Oct. 31, 2021

Leases [Abstract]

Assets and Liabilities, Lessee

Supplemental balance sheet information related to leases is as follows:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Operating leases:
Operating lease right-of-use assets, gross	$	170,277		$	170,855
Accumulated amortization		(64,374	)		(70,190	)
Operating lease right-of-use assets, net	$	105,903		$	100,665
Operating lease liabilities—current	$	42,670		$	43,221
Operating lease liabilities—non-current		86,599			77,675
Total operating lease liabilities	$	129,269		$	120,896
Weighted average remaining lease term (in years):		3.1			2.9
Weighted average discount rate:		5.5	%		5.5	%


	As of October 31, 2021
	(in thousands)
Finance leases:
Finance lease right-of-use assets, gross (1)	$	8,972
Accumulated amortization (1)		(1,136	)
Finance lease right-of-use assets, net (1)	$	7,836
Finance lease liabilities—current (2)	$	1,775
Finance lease liabilities—non-current (3)		6,082
Total finance lease liabilities	$	7,857
Weighted average remaining lease term (in years):		4.4
Weighted average discount rate:		6.7	%

(1)

Included in the condensed consolidated balance sheets within property and equipment, net.

(2)

Included in the condensed consolidated balance sheets within accrued expenses and other current liabilities.

(3)

Included in the condensed consolidated balance sheets within other liabilities—non-current.

Supplemental Cash Flow and Other Information Related to Leases

Supplemental cash flow and other information related to leases is as follows:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,976	$	13,476
Financing cash flows from finance leases	$	—	$	219
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	9,918	$	3,950

Lessee Operating and Finance Lease, Liability, Maturity

The undiscounted cash flows for our operating lease liabilities as of October 31, 2021 were as follows:


Fiscal Year Ending July 31:	Operating Leases			Finance Leases			Total
	(in thousands)
2022 (remaining nine months)	$	36,503		$	1,373		$	37,876
2023		48,671			1,832			50,503
2024		34,057			1,832			35,889
2025		7,628			1,832			9,460
2026		2,536			1,130			3,666
Thereafter		2,596			—			2,596
Total lease payments		131,991			7,999			139,990
Less: imputed interest		(11,095	)		(142	)		(11,237	)
Total lease obligation		120,896			7,857			128,753
Less: current lease obligations		(43,221	)		(1,775	)		(44,996	)
Long-term lease obligations	$	77,675		$	6,082		$	83,757

Cover Page - shares	3 Months Ended
Cover Page - shares	Oct. 31, 2021	Nov. 30, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 31, 2021
Document Transition Report	false
Entity File Number	001-37883
Entity Registrant Name	NUTANIX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0989767
Entity Address, Address Line One	1740 Technology Drive, Suite 150
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95110
City Area Code	(408)
Local Phone Number	216-8360
Title of 12(b) Security	Class A Common Stock, $0.000025 par value per share
Trading Symbol	NTNX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001618732
Current Fiscal Year End Date	--07-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Class A
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		214,714,323
Common Class B
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		2,272,877

Segment Information - Schedule of Sets Forth Long-Lived Assets Include Property and Equipment, Net (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 120,596	$ 131,621
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	78,081	86,468
Non-US [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 42,515	$ 45,153

Balance Sheet Components

3 Months Ended

Oct. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

NOTE 4. BALANCE SHEET COMPONENTS

Short-Term Investments

The amortized cost of our short-term investments approximates their fair value. Unrealized losses related to our short-term investments are generally due to interest rate fluctuations, as opposed to credit quality. However, we review individual securities that are in an unrealized loss position in order to evaluate whether or not they have experienced or are expected to experience credit losses that would result in a decline in fair value. As of July 31, 2021 and October 31, 2021, unrealized gains and losses from our short-term investments were not material and were not the result of a decline in credit quality. As a result, at July 31, 2021 and October 31, 2021, we did not record any credit losses for these investments.

The following table summarizes the estimated fair value of our investments in marketable debt securities by their contractual maturity dates:


	As of October 31, 2021
	(in thousands)
Due within one year	$	726,911
Due in one to two years		198,205
Total	$	925,116

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Prepaid operating expenses	$	36,455	$	28,509
VAT receivables		8,290		7,684
Other current assets		12,071		12,689
Total prepaid expenses and other current assets	$	56,816	$	48,882

Property and Equipment, Net

Property and equipment, net consists of the following:


		As of
	Estimated Useful Life	July 31, 2021			October 31, 2021
	(in months)	(in thousands)
Computer, production, engineering and other equipment	36	$	300,583		$	310,444
Demonstration units	12		68,992			64,560
Leasehold improvements	(1)		62,676			61,102
Furniture and fixtures	60		16,518			16,473
Total property and equipment, gross			448,769			452,579
Less: accumulated depreciation (2)			(317,148	)		(331,983	)
Total property and equipment, net		$	131,621		$	120,596

(1)

Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term.

(2)

Includes a $0.9 million write-off related to the impairment of certain leasehold improvements during the fiscal quarter ended October 31, 2020. For additional information on this lease-related impairment, refer to Note 6.

Depreciation expense related to our property and equipment was $19.2 million and $18.7 million for the three months ended October 31, 2020 and 2021, respectively.

Goodwill and Intangible Assets, Net

There was no change in the carrying value of goodwill during the three months ended October 31, 2021.

Intangible assets, net consists of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Developed technology	$	79,300		$	79,300
Customer relationships		8,860			8,860
Trade name		4,170			4,170
Total intangible assets, gross		92,330			92,330
Less:
Accumulated amortization of developed technology		(50,764	)		(54,241	)
Accumulated amortization of customer relationships		(6,513	)		(6,903	)
Accumulated amortization of trade name		(3,041	)		(3,301	)
Total accumulated amortization		(60,318	)		(64,445	)
Total intangible assets, net	$	32,012		$	27,885

Amortization expense related to our intangible assets is being recognized in the condensed consolidated statements of operations within product cost of revenue for developed technology and sales and marketing expense for customer relationships and trade name.

The estimated future amortization expense of our intangible assets is as follows:


Fiscal Year Ending July 31:	Amount
	(in thousands)
2022 (remaining nine months)	$	12,056
2023		10,856
2024		3,210
2025		1,763
Total	$	27,885

Accrued Compensation and Benefits

Accrued compensation and benefits consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Accrued commissions	$	48,321	$	31,696
Accrued vacation		26,961		27,730
Payroll taxes payable		21,603		21,696
Accrued benefits		10,243		11,610
Contributions to ESPP withheld		26,735		11,241
Accrued bonus		14,878		5,774
Other		13,596		12,625
Total accrued compensation and benefits	$	162,337	$	122,372

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Income taxes payable	$	13,309	$	10,409
Accrued professional services		3,541		6,773
Other		22,554		16,327
Total accrued expenses and other current liabilities	$	39,404	$	33,509

Overview and Basis of Presentation (Policies)

3 Months Ended

Oct. 31, 2021

Accounting Policies [Abstract]

Principles of Consolidation and Significant Accounting Policies

The accompanying condensed consolidated financial statements, which include the accounts of Nutanix, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and are consistent in all material respects with those included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021, filed with the Securities and Exchange Commission ("SEC") on September 21, 2021. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements are unaudited, but include all adjustments of a normal recurring nature necessary for a fair presentation of our quarterly results. The consolidated balance sheet as of July 31, 2021 is derived from audited financial statements; however, it does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such management estimates and assumptions include, but are not limited to, the best estimate of selling prices for products and related support; useful lives and recoverability of intangible assets and property and equipment; allowance for credit losses; determination of fair value of stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; purchase commitment liabilities to our OEMs; sales commissions expense and the period of benefit for deferred commissions; whether an arrangement is or contains a lease; the incremental borrowing rate to measure the present value of right-of-use assets and lease liabilities; the inputs used to determine the fair value of the contingent liability associated with the conversion feature of the 2.50% convertible senior notes due 2026 (the "2026 Notes"); and contingencies and litigation. Management evaluates these estimates and assumptions on an ongoing basis using historical experience and other factors and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.

In response to the ongoing and rapidly evolving COVID-19 pandemic, we considered the impact of the estimated economic implications on our critical and significant accounting estimates, including assessment of collectibility of customer contracts, valuation of accounts receivable, provision for purchase commitments to our OEMs and impairment of long-lived assets, right-of-use assets, and deferred commissions.

Concentration Risk

Concentration of Risk

Concentration of revenue and accounts receivable—We sell our products primarily through our Partners and occasionally directly to end customers. For the three months ended October 31, 2020 and 2021, no end customer accounted for more than 10% of total revenue or accounts receivable.

For each significant Partner, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows:


	Revenue						Accounts Receivable as of
	Three Months Ended October 31,						July 31, 2021			October 31, 2021
Partners	2020			2021
Partner A		29	%		31	%		35	%		27	%
Partner B		15	%		14	%		23	%		19	%
Partner C	(1)			(1)			(1)				13	%
Partner D	(1)			(1)			(1)				10	%
Partner E		13	%		14	%	(1)			(1)

(1)

Less than 10%

Convertible Senior Notes

Our convertible senior notes, including any embedded conversion features, are accounted for under the traditional convertible debt accounting model and are treated as a liability, net of unamortized issuance costs. The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets; otherwise, it is classified as a long-term liability, as we retain the option to settle conversion requests in shares of our Class A common stock. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative; otherwise, they are classified as derivative instruments and accounted for as such. Issuance costs are amortized to interest expense using the effective interest rate method over the term of the notes. In accounting for conversions of the notes, the carrying amount of the converted notes is reduced by the total consideration paid or issued for the respective converted notes and the difference is recorded to additional paid-in capital on our condensed consolidated balance sheets. In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other income (expense), net on our condensed consolidated statements of operations.

Recently Adopted and Recently Issued and Not Yet Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate. ASU 2020-06 also provides for certain disclosures with regard to convertible instruments and associated fair values. We early adopted the new standard using the modified retrospective method effective August 1, 2021 and have not changed any previously disclosed amounts or provided additional disclosures for the comparative periods.

The adoption of this new guidance resulted in an increase in the carrying value of the 0% convertible senior notes due 2023 (the "2023 Notes") by approximately $48.0 million to reflect the full principal amount of the convertible notes outstanding, net of issuance costs, a decrease in additional paid-in capital of approximately $148.6 million to remove the equity component separately recorded for the conversion feature associated with the 2023 Notes, and a cumulative-effect adjustment of approximately $100.6 million to the accumulated deficit beginning balance as of August 1, 2021. The remaining debt issuance costs will continue to be amortized over the term of the 2023 Notes. The new standard had no impact on the 2026 Notes, as the embedded conversion feature on the 2026 Notes was initially accounted for as a derivative liability.

In May 2021, the FASB issued ASU 2021-04, Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which provides guidance on modifications or exchanges of a freestanding equity-classified written call option (such as warrants). An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The new standard is effective for all entities for fiscal years beginning after December 15, 2021, with early adoption permitted, including interim periods within those fiscal years. We early adopted the new standard effective August 1, 2021 and the adoption did not have a material impact on our condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

3 Months Ended

Oct. 31, 2021

Oct. 31, 2020

Cash flows from operating activities:

Net loss

$ (419,852)

$ (265,048)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

23,291

23,499

Stock-based compensation

90,547

89,198

Change in fair value of derivative liability

198,038

64,740

Loss on debt extinguishment

64,910

Amortization of debt discount and issuance costs

9,831

11,708

Operating lease cost, net of accretion

9,189

8,347

Impairment of lease-related assets

2,822

Non-cash interest expense

4,773

1,952

Other

3,072

1,671

Changes in operating assets and liabilities:

Accounts receivable, net

64,740

60,094

Deferred commissions

(6,225)

(28,230)

Prepaid expenses and other assets

6,751

6,222

Accounts payable

(3,139)

(4,075)

Accrued compensation and benefits

(39,965)

10,041

Accrued expenses and other liabilities

(6,207)

(1,238)

Operating leases, net

(12,323)

(7,970)

Deferred revenue

19,508

22,194

Net cash (used in) provided by operating activities

6,939

(4,073)

Cash flows from investing activities:

Maturities of investments

272,024

97,578

Purchases of investments

(290,050)

(513,998)

Sales of investments

17,999

Purchases of property and equipment

(8,844)

(12,252)

Net cash used in investing activities

(8,871)

(428,672)

Cash flows from financing activities:

Payments of debt extinguishment costs

(14,709)

Proceeds from unwinding of convertible note hedges

39,880

Payments for unwinding of warrants

(18,390)

Proceeds from sales of shares through employee equity incentive plans

30,139

19,600

Proceeds from the issuance of convertible notes, net of issuance costs

89,128

723,757

Repurchases of common stock

(58,570)

(125,079)

Payment of finance lease obligations

(219)

Net cash provided by financing activities

67,259

618,278

Net increase in cash, cash equivalents and restricted cash

65,327

185,533

Cash, cash equivalents and restricted cash—beginning of period

288,873

321,991

Cash, cash equivalents and restricted cash—end of period

354,200

507,524

Restricted cash

^[1]

3,215

3,042

Cash and cash equivalents—end of period

350,985

504,482

Supplemental disclosures of cash flow information:

Cash paid for income taxes

6,181

5,050

Supplemental disclosures of non-cash investing and financing information:

Purchases of property and equipment included in accounts payable and accrued and other liabilities

12,099

$ 2,948

Finance lease liabilities arising from obtaining right-of-use assets

7,857

Convertible senior notes offering costs included in accrued liabilities

$ 700

[1]	Included within other assets—non-current in the condensed consolidated balance sheets.

Revenue, Deferred Revenue and Deferred Commissions

3 Months Ended

Oct. 31, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Revenue, Deferred Revenue and Deferred Commissions

NOTE 2. REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS

Disaggregation of Revenue and Revenue Recognition

We generate revenue primarily from the sale of our enterprise cloud platform, which can be delivered pre-installed on an appliance that is configured to order or delivered separately to be utilized on a variety of certified hardware platforms. When the software license is not portable to other appliances, it can be used over the life of the associated appliance, while subscription term-based licenses typically have a term of one to five years. Configured-to-order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our OEMs or in limited cases, directly from Nutanix. Our enterprise cloud platform typically includes one or more years of support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support. A substantial portion of sales are made through channel partners and OEM relationships.

The following table depicts the disaggregation of revenue by revenue type, consistent with how we evaluate our financial performance:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Subscription	$	278,165	$	337,901
Non-portable software		20,043		14,337
Hardware		729		2,163
Professional services		13,817		24,116
Total revenue	$	312,754	$	378,517

Subscription revenue — Subscription revenue includes any performance obligation which has a defined term and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based software as a service ("SaaS") offerings.



Ratable — We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions. These offerings represented approximately $147.8 million and $183.1 million of our subscription revenue for the three months ended October 31, 2020 and 2021, respectively.



Upfront — Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer. These subscription software licenses represented approximately $130.4 million and $154.8 million of our subscription revenue for the three months ended October 31, 2020 and 2021, respectively.

Non-portable software revenue — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and can be used over the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware revenue — In transactions where the hardware appliance is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Contracts with multiple performance obligations — The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price ("SSP") basis. For deliverables that we routinely sell separately, such as software entitlement and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months. For those that are not sold routinely, we determine SSP based on our overall pricing trends and objectives, taking into consideration market conditions and other factors, including the value of our contracts, the products sold and geographic locations.

Contract balances — The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period we deliver goods or provide services, or when our right to consideration is unconditional. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. Unbilled accounts receivable, included in accounts receivable, net on the condensed consolidated balance sheets, was not material for any of the periods presented.

Payment terms on invoiced amounts are typically 30-45 days. We assess credit losses on accounts receivable by taking into consideration past collection experience, the credit quality of the customer, the age of the receivable balance, current and future economic conditions, and forecasts that may affect the collectibility of the reported amount. The balance of accounts receivable, net of allowance for credit losses, as of July 31, 2021 and October 31, 2021 is presented in the accompanying condensed consolidated balance sheets.

Costs to obtain and fulfill a contract — We capitalize commissions paid to sales personnel and the related payroll taxes when customer contracts are signed. These costs are recorded as deferred commissions in the condensed consolidated balance sheets, current and non-current. We determine whether costs should be deferred based on our sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Commissions paid upon the initial acquisition of a contract are recognized over the estimated period of benefit, which may exceed the term of the initial contract if the commissions expected to be paid upon renewal are not commensurate with that of the initial contract. Accordingly, deferred costs are recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation over the entire period of benefit and included in sales and marketing expense in the condensed consolidated statements of operations. We determine the estimated period of benefit by evaluating the expected renewals of customer contracts, the duration of relationships with our customers, customer retention data, our technology development lifecycle and other factors. Deferred costs are periodically reviewed for impairment.

Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our condensed consolidated statements of operations.

Deferred revenue — Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and primarily pertain to software entitlement and support subscriptions and professional services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the condensed consolidated balance sheet date.

Significant changes in the balance of deferred revenue (contract liability) and deferred commissions (contract asset) for the periods presented are as follows:


	Deferred Revenue			Deferred Commissions
	(in thousands)
Balance as of July 31, 2021	$	1,312,923		$	343,420
Additions (1)		398,928			60,187
Revenue/commissions recognized		(378,517	)		(53,962	)
Balance as of October 31, 2021	$	1,333,334		$	349,645

(1)

Includes both billed and unbilled amounts.

During the three months ended October 31, 2020, we recognized revenue of approximately $142.7 million pertaining to amounts deferred as of July 31, 2020. During the three months ended October 31, 2021, we recognized revenue of approximately $183.3 million pertaining to amounts deferred as of July 31, 2021.

Many of our contracted but not invoiced performance obligations are subject to cancellation terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized ("contracted not recognized"), which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods and excludes performance obligations that are subject to cancellation terms. Contracted not recognized revenue was approximately $1.4 billion as of October 31, 2021, of which we expect to recognize approximately 51% over the next 12 months, and the remainder thereafter.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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Net Loss Per Share - Additional Information (Details)	3 Months Ended
Net Loss Per Share - Additional Information (Details)	Oct. 31, 2021
ASU 2020-06
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
New Accounting Pronouncement or Change in Accounting Principle	We adopted ASU 2020-06 on August 1, 2021 using the modified retrospective method, applicable to our convertible senior notes outstanding as of adoption. We have not changed any previously disclosed amounts or provided additional disclosures for comparative periods. ASU 2020-06 requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share.

Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Earnings Per Share [Abstract]
Net loss	$ (419,852)	$ (265,048)
Weighted average shares—basic and diluted	215,499	203,095
Net loss per share attributable to common stockholders— basic and diluted	$ (1.95)	$ (1.31)

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

Schedule of Financial Assets and Liabilities Measured on Recurring Basis

Fair Value Measurements (Tables)

3 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

The fair value of our financial assets measured on a recurring basis is as follows:


	As of July 31, 2021
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	72,583	$	—	$	—	$	72,583
Commercial paper		—		29,997		—		29,997
Corporate bonds		—		2,002		—		2,002
Short-term investments:
Corporate bonds		—		513,688		—		513,688
Commercial paper		—		347,088		—		347,088
U.S. Government securities		—		67,230		—		67,230
Total measured at fair value	$	72,583	$	960,005	$	—	$	1,032,588
Cash								181,141
Total cash, cash equivalents and short-term investments							$	1,213,729


	As of October 31, 2021
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	107,304	$	—	$	—	$	107,304
Commercial paper		—		10,000		—		10,000
Short-term investments:
Corporate bonds		—		517,494		—		517,494
Commercial paper		—		346,347		—		346,347
U.S. Government securities		—		61,275		—		61,275
Total measured at fair value	$	107,304	$	935,116	$	—	$	1,042,420
Cash								233,681
Total cash, cash equivalents and short-term investments							$	1,276,101

The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows:


	As of July 31, 2021 (1)				As of October 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in thousands)
2023 Notes	$	523,671	$	602,272	$	145,012	$	150,367
2026 Notes		532,023		1,128,953		550,781		1,174,029
2027 Notes (2)		—		—		565,863		544,261
Total	$	1,055,694	$	1,731,225	$	1,261,656	$	1,868,657

(1)

Prior period amounts have not been adjusted due to our adoption of ASU 2020-06 under the modified retrospective method. For additional information on our adoption of ASU 2020-06, refer to Note 1 and Note 5.

(2)

The 2027 Notes were issued in September 2021.

Schedule of Derivative Liabilities at Fair Value

The following table shows the change in the estimated fair value of the derivative liability:


	Three Months Ended October 31, 2021
	(in thousands)
Derivative liability at July 31, 2021	$	500,175
Change in fair value		198,038
Derivative liability at September 15, 2021		698,213
Reclass to equity upon conversion price becoming fixed		(698,213	)
Derivative liability at October 31, 2021	$	—

Fair Value Measurement Inputs and Valuation Techniques

We estimated the fair value of the derivative liability using a binomial model, with the following valuation inputs:


	As of
	July 31, 2021	September 15, 2021
Conversion ratio (1)	Conversion price of $27.75 with a 36.036 conversion rate per $1,000	Conversion price of $27.75 with a 36.036 conversion rate per $1,000
Risk-free rate	0.7%	0.8%
Discount rate (2)	6.5%	6.5%
Volatility	40.0%	45.0%
Stock price	$36.02	$42.77

(1)

The conversion ratio was estimated based on the latest forecast of the associated financial performance metric.

(2)

The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis.

Income Taxes

3 Months Ended

Oct. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10. INCOME TAXES

The income tax provisions of $4.2 million and $4.0 million for the three months ended October 31, 2020 and 2021, respectively, primarily consisted of foreign taxes on our international operations and U.S. state income taxes. We continue to maintain a full valuation allowance for our U.S. Federal and state deferred tax assets and a partial valuation allowance related to our foreign net deferred tax assets.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Share-based Payment Arrangement [Abstract]

Equity Incentive Plans

3 Months Ended

Oct. 31, 2021

Equity Incentive Plans

NOTE 9. EQUITY INCENTIVE PLANS

Stock Plans

We have three equity incentive plans, the 2010 Stock Plan ("2010 Plan"), 2011 Stock Plan ("2011 Plan") and 2016 Equity Incentive Plan ("2016 Plan"). Our stockholders approved the 2016 Plan in March 2016 and it became effective in connection with our initial public offering ("IPO"). As a result, at the time of the IPO, we ceased granting additional stock awards under the 2010 Plan and 2011 Plan and both plans were terminated. Any outstanding stock awards under the 2010 Plan and 2011 Plan will remain outstanding, subject to the terms of the applicable plan and award agreements, until such shares are issued under those stock awards, by exercise of stock options or settlement of restricted stock units ("RSUs"), or until those stock awards become vested or expired by their terms.

Under the 2016 Plan, we may grant incentive stock options, non-statutory stock options, restricted stock, RSUs and stock appreciation rights to employees, directors and consultants. We initially reserved 22.4 million shares of our Class A common stock for issuance under the 2016 Plan. The number of shares of Class A common stock available for issuance under the 2016 Plan will also include an annual increase on the first day of each fiscal year, beginning in fiscal 2018, equal to the lesser of: 18.0 million shares, 5% of the outstanding shares of all classes of common stock as of the last day of our immediately preceding fiscal year, or such other amount as may be determined by the Board. Accordingly, on August 1, 2020 and 2021, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 10.1 million and 10.7 million shares, respectively, pursuant to these provisions. As of October 31, 2021, we had reserved a total of 47.4 million shares for the issuance of equity awards under the Stock Plans, of which 17.8 million shares were still available for grant.

Restricted Stock Units

Performance RSUs — We have granted RSUs that have both service and performance conditions to our executives and employees ("Performance RSUs"). Vesting of Performance RSUs is subject to continuous service and the satisfaction of certain performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which both the service condition has been satisfied and it is probable that the performance conditions will be met, the actual vesting and settlement of Performance RSUs are subject to the performance conditions actually being met.

Market Stock Units

In connection with his hiring, in December 2020, the Compensation Committee of our Board of Directors approved the grant of 703,117 RSUs subject to certain market conditions ("MSUs") to our new CEO. These MSUs have a weighted average grant date fair value per unit of $35.69 and will vest up to 133% based upon the achievement of certain stock price targets over a performance period of approximately 4.0 years, subject to his continuous service on each vesting date.

In order to align with the MSUs granted to our new CEO, in December 2020, the Compensation Committee of our Board of Directors modified the vesting conditions for the 75,000 MSUs previously granted to another individual who was serving as one of our executives. These modified MSUs had a weighted average grant date fair value per unit of $27.54 and vested based upon the achievement of a modified stock price target over the original performance period of approximately 3.9 years, subject to continuous service on each vesting date. The incremental compensation cost resulting from this modification was not material.

In October 2021, the Compensation Committee of our Board of Directors approved the grant of approximately 0.4 million MSUs to certain of our executives. These MSUs have a weighted average grant date fair value per unit of $46.20 and will vest up to 200% based upon our total shareholder return over a performance period of approximately 2.8 years, subject to continuous service on each vesting date.

We used Monte Carlo simulations to calculate the fair value of these awards on the grant date, or modification date, as applicable. A Monte Carlo simulation requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date corresponding to the length of time remaining in the performance period and expected dividend yield. We recognize stock-based compensation expense related to these MSUs using the graded vesting attribution method over the respective performance periods. As of October 31, 2021, approximately 1.4 million MSUs remained outstanding.

Below is a summary of RSU activity, including MSUs, under the Stock Plans:


	Number of Shares			Weighted Average Grant Date Fair Value per Share
	(in thousands)
Outstanding at July 31, 2021		21,708		$	30.98
Granted		8,347		$	37.00
Released		(2,537	)	$	31.31
Forfeited		(976	)	$	33.66
Outstanding at October 31, 2021		26,542		$	32.74

Stock Options

We did not grant any stock options during the three months ended October 31, 2021. A total of 0.3 million stock options were exercised during the three months ended October 31, 2021, with a weighted average exercise price per share of $4.97. As of October 31, 2021, 3.1 million stock options, with a weighted average exercise price of $5.23 per share, a weighted average remaining contractual life of 2.6 years and an aggregate intrinsic value of $89.0 million, remained outstanding.

Employee Stock Purchase Plan

In December 2015, the Board adopted the 2016 Employee Stock Purchase Plan, which was subsequently amended in January 2016 and September 2016 and approved by our stockholders in March 2016 ("Original 2016 ESPP"). The Original 2016 ESPP became effective in connection with our IPO. On December 13, 2019, during our 2019 Annual Meeting of Stockholders, our stockholders approved certain amendments to the Original 2016 ESPP. Under the amended and restated Original 2016 ESPP ("2016 ESPP"), the maximum number of shares of Class A common stock available for sale is 11.5 million shares, representing an increase of 9.2 million shares.

The 2016 ESPP allows eligible employees to purchase shares of our Class A common stock at a discount through payroll deductions of up to 15% of eligible compensation, subject to caps of $25,000 in any calendar year and 1,000 shares on any purchase date. The 2016 ESPP provides for 12-month offering periods, generally beginning in March and September of each year, and each offering period consists of two six-month purchase periods.

On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85% of the lesser of the fair market value of our Class A common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of our Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period.

During the three months ended October 31, 2021, 1.3 million shares of common stock were purchased under the 2016 ESPP for an aggregate amount of $28.8 million. As of October 31, 2021, 3.9 million shares were available for future issuance under the 2016 ESPP.

We use the Black-Scholes option pricing model to determine the fair value of shares purchased under the 2016 ESPP with the following weighted average assumptions on the date of grant:


	Three Months Ended October 31,
	2020			2021
Expected term (in years)		0.92			0.78
Risk-free interest rate		0.1	%		0.1	%
Volatility		73.3	%		53.6	%
Dividend yield		—	%		—	%

Stock-Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations is as follows:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Cost of revenue:
Product	$	1,504	$	1,751
Support, entitlements and other services		5,761		8,451
Sales and marketing		32,227		29,132
Research and development		37,887		38,479
General and administrative		11,819		12,734
Total stock-based compensation expense	$	89,198	$	90,547

As of October 31, 2021, unrecognized stock-based compensation expense related to outstanding stock awards was approximately $790.2 million and is expected to be recognized over a weighted average period of approximately 2.8 years.

Segment Information (Tables)

3 Months Ended

Oct. 31, 2021

Segment Reporting [Abstract]

Schedule of Revenue by Geographic Area

The following table sets forth revenue by geographic location based on bill-to location:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
U.S.	$	177,113	$	217,150
Europe, the Middle East and Africa		59,906		83,995
Asia Pacific		62,598		65,683
Other Americas		13,137		11,689
Total revenue	$	312,754	$	378,517

Schedule of Long-lived Assets by Geographical Location

The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
United States	$	86,468	$	78,081
International		45,153		42,515
Total long-lived assets	$	131,621	$	120,596

Equity Incentive Plans - ESPP (Details) - Employee Stock Purchase Plan	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	9 months 10 days	11 months 1 day
Risk-free interest rate	0.10%	0.10%
Volatility	53.60%	73.30%
Dividend yield	0.00%	0.00%

Balance Sheet Components - Schedule of Accrued Compensation Benefits (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Employee-related Liabilities, Current [Abstract]
Accrued commissions	$ 31,696	$ 48,321
Accrued vacation	27,730	26,961
Payroll taxes payable	21,696	21,603
Accrued benefits	11,610	10,243
Contributions to ESPP withheld	11,241	26,735
Accrued bonus	5,774	14,878
Other	12,625	13,596
Total accrued compensation and benefits	$ 122,372	$ 162,337

Fair Value Measurements - Schedule of Derivative Liability Measurement Inputs and Valuation Techniques (Details)

Sep. 15, 2021

USD ($)

Jul. 31, 2021

USD ($)

Conversion Price

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

^[1]

27.75

Conversion Ratio

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

^[1]

0.036036

Risk Free Interest Rate

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

0.008

0.007

Discount Rate

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

^[2]

0.065

Volatility

Fair Value Measurement Inputs and Valuation Techniques [Line Items]

0.450

0.400

Stock Price

42.77

36.02

[1]	The conversion ratio was estimated based on the latest forecast of the associated financial performance metric.
[2]	The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis.

Equity Incentive Plans - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 90,547	$ 89,198
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	29,132	32,227
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	38,479	37,887
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	12,734	11,819
Product \| Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	1,751	1,504
Support, entitlements and other services \| Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 8,451	$ 5,761

Commitments and Contingencies - Additional Information (Details) $ in Millions	Oct. 31, 2021 USD ($)
Non-contract Vendors
Loss Contingencies [Line Items]
Purchase obligation	$ 86.4
Contract Manufacturer
Loss Contingencies [Line Items]
Purchase obligation	$ 105.7

Fair Value Measurements

3 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 3. FAIR VALUE MEASUREMENTS

The fair value of our financial assets measured on a recurring basis is as follows:


	As of July 31, 2021
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	72,583	$	—	$	—	$	72,583
Commercial paper		—		29,997		—		29,997
Corporate bonds		—		2,002		—		2,002
Short-term investments:
Corporate bonds		—		513,688		—		513,688
Commercial paper		—		347,088		—		347,088
U.S. Government securities		—		67,230		—		67,230
Total measured at fair value	$	72,583	$	960,005	$	—	$	1,032,588
Cash								181,141
Total cash, cash equivalents and short-term investments							$	1,213,729


	As of October 31, 2021
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	107,304	$	—	$	—	$	107,304
Commercial paper		—		10,000		—		10,000
Short-term investments:
Corporate bonds		—		517,494		—		517,494
Commercial paper		—		346,347		—		346,347
U.S. Government securities		—		61,275		—		61,275
Total measured at fair value	$	107,304	$	935,116	$	—	$	1,042,420
Cash								233,681
Total cash, cash equivalents and short-term investments							$	1,276,101

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value, with the exception of the 2023 Notes, the 2026 Notes and the 0.25% convertible senior notes due 2027 (the "2027 Notes") (collectively, the "Notes"). Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows:


	As of July 31, 2021 (1)				As of October 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in thousands)
2023 Notes	$	523,671	$	602,272	$	145,012	$	150,367
2026 Notes		532,023		1,128,953		550,781		1,174,029
2027 Notes (2)		—		—		565,863		544,261
Total	$	1,055,694	$	1,731,225	$	1,261,656	$	1,868,657

(1)

(2)

The 2027 Notes were issued in September 2021.

The carrying value of the 2023 Notes as of July 31, 2021 was net of an unamortized debt discount of $48.6 million and unamortized debt issuance costs of $2.7 million. The carrying value of the 2023 Notes as of October 31, 2021 was net of unamortized debt issuance costs of $0.7 million.

The carrying value of the 2026 Notes as of July 31, 2021 and October 31, 2021 included $8.9 million and $18.4 million, respectively, of non-cash interest expense that was converted to the principal balance, net of unamortized debt discounts of $203.6 million and $195.3 million, respectively, and unamortized debt issuance costs of $23.3 million and $22.3 million, respectively.

The carrying value of the 2027 Notes as of October 31, 2021 was net of unamortized debt issuance costs of $9.1 million.

The total estimated fair value of the 2023 Notes was determined based on the closing trading price per $100 of the 2023 Notes as of the last day of trading for the period. We consider the fair value of the 2023 Notes to be a Level 2 valuation due to the limited trading activity.

The total estimated fair value of the 2026 Notes is based on a binomial model. We consider the fair value of the 2026 Notes to be a Level 3 valuation, as the 2026 Notes are not publicly traded. The Level 3 inputs used are the same as those used to determine the estimated fair value of the associated derivative liability, as detailed below.

The total estimated fair value of the 2027 Notes was determined based on the closing trading price per $100 of the 2027 Notes as of the last day of the trading period. We consider the fair value of the 2027 Notes to be a Level 2 valuation due to the limited trading activity.

Derivative Liability

The conversion feature of the 2026 Notes represents an embedded derivative. The 2026 Notes are not considered to be conventional debt and we determined that the embedded conversion feature was required to be bifurcated from the host debt and accounted for as a derivative liability, as the 2026 Notes were convertible into a variable number of shares until the conversion price became fixed in September 2021, based on the level of achievement of the associated financial performance metric. As such, the initial fair value of the derivative instrument was recorded as a liability in the condensed consolidated balance sheet with the corresponding amount recorded as a discount to the 2026 Notes upon issuance. The derivative liability is considered a Level 3 valuation and was recorded at its estimated fair value at the end of each reporting period and as of September 15, 2021, when the conversion price became fixed, with the change in fair value recognized within other expense, net in the condensed consolidated statements of operations.

On September 15, 2021, the conversion price of the 2026 Notes became fixed and the bifurcated liability was no longer accounted for as a separate derivative because the conversion features are now considered indexed to our own equity and meet the equity classification conditions. We estimated the fair value of the derivative liability as of September 15, 2021 to be $698.2 million, which was reclassified to equity on that date.

The following table shows the change in the estimated fair value of the derivative liability:


	Three Months Ended October 31, 2021
	(in thousands)
Derivative liability at July 31, 2021	$	500,175
Change in fair value		198,038
Derivative liability at September 15, 2021		698,213
Reclass to equity upon conversion price becoming fixed		(698,213	)
Derivative liability at October 31, 2021	$	—

We estimated the fair value of the derivative liability using a binomial model, with the following valuation inputs:


	As of
	July 31, 2021	September 15, 2021
Conversion ratio (1)	Conversion price of $27.75 with a 36.036 conversion rate per $1,000	Conversion price of $27.75 with a 36.036 conversion rate per $1,000
Risk-free rate	0.7%	0.8%
Discount rate (2)	6.5%	6.5%
Volatility	40.0%	45.0%
Stock price	$36.02	$42.77

(1)

The conversion ratio was estimated based on the latest forecast of the associated financial performance metric.

(2)

The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis.

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Accounts receivable, allowance for credit loss	$ 486	$ 892
Preferred stock, par value (in dollars per share)	$ 0.000025	$ 0.000025
Preferred stock, shares authorized (in shares)	200,000,000	200,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.000025	$ 0.000025
Common stock, shares authorized (in shares)	1,200,000,000	1,200,000,000
Common stock, shares issued (in shares)	216,959,000	214,210,000
Common stock, shares outstanding (in shares)	216,959,000	214,210,000
Common Class A
Common stock, par value (in dollars per share)	$ 0.000025	$ 0.000025
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	211,386,000	208,579,000
Common stock, shares outstanding (in shares)	211,386,000	208,579,000
Common Class B
Common stock, par value (in dollars per share)	$ 0.000025	$ 0.000025
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	5,573,000	5,631,000
Common stock, shares outstanding (in shares)	5,573,000	5,631,000

Balance Sheet Components (Tables)

3 Months Ended

Oct. 31, 2021

Schedule of Investments in Marketable Debt Securities, by Contractual Maturity Date

The following table summarizes the estimated fair value of our investments in marketable debt securities by their contractual maturity dates:


	As of October 31, 2021
	(in thousands)
Due within one year	$	726,911
Due in one to two years		198,205
Total	$	925,116

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Prepaid operating expenses	$	36,455	$	28,509
VAT receivables		8,290		7,684
Other current assets		12,071		12,689
Total prepaid expenses and other current assets	$	56,816	$	48,882

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following:


		As of
	Estimated Useful Life	July 31, 2021			October 31, 2021
	(in months)	(in thousands)
Computer, production, engineering and other equipment	36	$	300,583		$	310,444
Demonstration units	12		68,992			64,560
Leasehold improvements	(1)		62,676			61,102
Furniture and fixtures	60		16,518			16,473
Total property and equipment, gross			448,769			452,579
Less: accumulated depreciation (2)			(317,148	)		(331,983	)
Total property and equipment, net		$	131,621		$	120,596

(1)

Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term.

(2)

Schedule of Finite-Lived Intangible Assets

There was no change in the carrying value of goodwill during the three months ended October 31, 2021.

Intangible assets, net consists of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Developed technology	$	79,300		$	79,300
Customer relationships		8,860			8,860
Trade name		4,170			4,170
Total intangible assets, gross		92,330			92,330
Less:
Accumulated amortization of developed technology		(50,764	)		(54,241	)
Accumulated amortization of customer relationships		(6,513	)		(6,903	)
Accumulated amortization of trade name		(3,041	)		(3,301	)
Total accumulated amortization		(60,318	)		(64,445	)
Total intangible assets, net	$	32,012		$	27,885

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The estimated future amortization expense of our intangible assets is as follows:


Fiscal Year Ending July 31:	Amount
	(in thousands)
2022 (remaining nine months)	$	12,056
2023		10,856
2024		3,210
2025		1,763
Total	$	27,885

Schedule of Accrued Liabilities

Accrued Compensation and Benefits

Accrued compensation and benefits consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Accrued commissions	$	48,321	$	31,696
Accrued vacation		26,961		27,730
Payroll taxes payable		21,603		21,696
Accrued benefits		10,243		11,610
Contributions to ESPP withheld		26,735		11,241
Accrued bonus		14,878		5,774
Other		13,596		12,625
Total accrued compensation and benefits	$	162,337	$	122,372

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consists of the following:


	As of
	July 31, 2021		October 31, 2021
	(in thousands)
Income taxes payable	$	13,309	$	10,409
Accrued professional services		3,541		6,773
Other		22,554		16,327
Total accrued expenses and other current liabilities	$	39,404	$	33,509

Revenue, Deferred Revenue and Deferred Commissions - Deferred Revenue, by Arrangement, Disclosure (Details) $ in Thousands	3 Months Ended
	Oct. 31, 2021 USD ($)
Movement in Deferred Commissions [Roll Forward]
Deferred commissions, beginning balance	$ 343,420
Additions	60,187
Revenue/commissions recognized	(53,962)
Deferred commissions, ending balance	349,645
Deferred revenue, beginning balance	1,312,923
Additions	398,928
Revenue/commissions recognized	(378,517)
Deferred revenue, ending balance	$ 1,333,334

Convertible Senior Notes - Additional Information (Details) $ / shares in Units, shares in Millions			1 Months Ended		3 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 24, 2020 USD ($) d $ / shares	Sep. 30, 2021 USD ($) d $ / shares shares	Jan. 31, 2018 USD ($) d $ / shares shares	Oct. 31, 2021 USD ($) $ / shares shares	Oct. 31, 2020 USD ($)	Sep. 22, 2021 USD ($)	Sep. 15, 2021 USD ($)	Jul. 31, 2021 USD ($)
Debt Instrument [Line Items]
Payments for unwinding of warrants					$ (18,390,000)
Proceeds from unwinding of convertible note hedges					39,880,000
Loss on debt extinguishment					(64,910,000)
Proceeds from the issuance of convertible notes, net of issuance costs					89,128,000	$ 723,757,000
Derivative liability					0			$ 698,213,000	$ 500,175,000
2023 Convertible Senior Notes
Debt Instrument [Line Items]
Loss on debt extinguishment					$ 64,900,000
Number of securities called by warrants or rights (in shares) \| shares				11.8
Payments for convertible note hedges				$ 143,200,000
Exercise price of warrants (in dollars per share) \| $ / shares				$ 73.46	$ 73.46
Proceeds from issuance of warrants				$ 88,000,000.0
Transaction cost				$ 55,200,000
Dilutive effect of $10 increase in share price (in shares) \| shares					0.4
Dilutive effect of warrants (in shares) \| shares					2.1
Share price threshold for dilutive effect of warrants (in dollars per share) \| $ / shares					$ 83.46
2023 Convertible Senior Notes \| Common Class A
Debt Instrument [Line Items]
Share price (in dollars per share) \| $ / shares					$ 34.31
Convertible Debt \| 2023 Convertible Senior Notes
Debt Instrument [Line Items]
Interest rate, stated percentage				0.00%
Face amount				$ 575,000,000.0
Principal amount				575,000,000	$ 145,704,000				575,000,000
Debt outstanding							$ 145,700,000
Convertible debt			$ 416,500,000	$ 75,000,000.0
Repurchase amount			12,800,000
Proceeds from unwind transactions			21,500,000
Payments for unwinding of warrants			(18,400,000)
Proceeds from unwinding of convertible note hedges			$ 39,900,000
Conversion ratio				2,047.0500
Conversion price (in dollars per share) \| $ / shares				$ 48.85
Threshold trading days \| d				20
Threshold consecutive trading days \| d				30
Threshold percentage of stock price trigger				130.00%
Redemption price, percentage				100.00%
Unamortized discount, net				$ 10,781,000
Less: other issuance costs				707,000
Transaction costs attributable to equity component									3,000,000.0
Debt instrument, term					14 months
Payments for convertible note hedges				143,175,000
Proceeds from issuance of warrants				$ 87,975,000
Convertible Debt \| 2023 Convertible Senior Notes \| Common Class A
Debt Instrument [Line Items]
Threshold percentage of stock price trigger				98.00%
Convertible Debt \| 2026 Convertible Senior Notes
Debt Instrument [Line Items]
Interest rate, stated percentage		2.50%			2.50%
Face amount	$ 750,000,000.0
Principal amount					$ 750,000,000				$ 750,000,000
Conversion ratio		0.036036
Conversion price (in dollars per share) \| $ / shares		$ 27.75	$ 27.75
Threshold trading days \| d		20
Threshold consecutive trading days \| d		30
Threshold percentage of stock price trigger		150.00%
Redemption price, percentage		100.00%
Debt instrument, term					4 years 10 months 24 days
Proceeds from the issuance of convertible notes, net of issuance costs	723,700,000
Payments of debt issuance costs	$ 26,300,000
Debt instrument, principal amount for conversion into common stock		$ 1,000
Derivative liability		$ 230,900,000	$ 698,200,000
Convertible Debt \| 2027 Convertible Senior Notes
Debt Instrument [Line Items]
Interest rate, stated percentage			0.25%		0.25%
Face amount			$ 575,000,000
Principal amount					$ 575,000,000
Convertible debt			477,300,000
Debt instrument for cash, net			88,400,000
Notes for cash			97,700,000
Repurchase amount			$ 14,700,000
Conversion ratio			17.3192
Conversion price (in dollars per share) \| $ / shares			$ 57.74
Threshold trading days \| d			20
Threshold consecutive trading days \| d			30
Redemption price, percentage			100.00%
Debt instrument, term					5 years 10 months 24 days
Debt instrument, principal amount for conversion into common stock			$ 1,000
Convertible Debt \| 2027 Convertible Senior Notes \| Minimum
Debt Instrument [Line Items]
Threshold percentage of stock price trigger			130.00%
Convertible Debt \| 2027 Convertible Senior Notes \| Common Class A
Debt Instrument [Line Items]
Repurchase amount			$ 58,500,000
Number of share repurchase \| shares			1.4
Convertible Debt \| 2027 Convertible Senior Notes \| Common Class A \| Maximum
Debt Instrument [Line Items]
Threshold percentage of stock price trigger			98.00%
Convertible Debt \| Exchange Transactions \| 2023 Convertible Senior Notes
Debt Instrument [Line Items]
Face amount							416,500,000
Convertible Debt \| Exchange Transactions \| 2027 Convertible Senior Notes
Debt Instrument [Line Items]
Face amount							477,300,000
Convertible Debt \| Cash Transaction \| 2023 Convertible Senior Notes
Debt Instrument [Line Items]
Repurchase amount							$ 12,800,000

Balance Sheet Components - Schedule of Finite-lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands	Oct. 31, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2022 (remaining nine months)	$ 12,056
2023	10,856
2024	3,210
2025	1,763
Total	$ 27,885

Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Other Liabilities Disclosure [Abstract]
Income taxes payable	$ 10,409	$ 13,309
Accrued professional services	6,773	3,541
Other	16,327	22,554
Total accrued expenses and other current liabilities	$ 33,509	$ 39,404

Commitments and Contingencies

3 Months Ended

Oct. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 7. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

In the normal course of business, we make commitments with our OEMs to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on performance targets or on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge related to these items when we determine that it is probable a loss will be incurred and we are able to estimate the amount of the loss. Our historical charges have not been material. As of October 31, 2021, we had up to approximately $86.4 million of non-cancelable purchase obligations and other commitments pertaining to our daily business operations, and up to approximately $105.7 million in the form of guarantees to certain of our OEMs.

Legal Proceedings

Securities Class Actions. Beginning on March 29, 2019, several purported securities class actions were filed in the United States District Court for the Northern District of California against us and two of our officers. The initial complaints generally alleged that the defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. In July 2019, the court consolidated the actions into a single action, and appointed a lead plaintiff, who then filed a consolidated amended complaint (the "Original Complaint"). The action was brought on behalf of those who purchased or otherwise acquired our stock between November 30, 2017 and May 30, 2019, inclusive. The defendants subsequently filed a motion to dismiss the Original Complaint, which the court granted on March 9, 2020, while providing the lead plaintiff leave to amend. On April 17, 2020, the lead plaintiff filed a second amended complaint (the "Current Complaint"), again naming us and two of our officers as defendants. The Current Complaint alleges the same class period, includes many of the same factual allegations as the Original Complaint, and again alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act, as well as SEC Rule 10b-5. The Current Complaint seeks monetary damages in an unspecified amount. On September 11, 2020, the court denied the defendants' motion to dismiss the Current Complaint and held that the lead plaintiff adequately stated a claim with respect to certain statements regarding our new customer growth and sales productivity. On January 27, 2021, lead plaintiff, Shimon Hedvat, filed a motion to (i) withdraw as lead plaintiff and (ii) substitute proposed new lead plaintiffs and approve their appointment of a new co-lead counsel. On March 1, 2021, the court granted the lead plaintiff’s motion to withdraw as lead plaintiff but denied without prejudice his motion to substitute proposed new lead plaintiffs. The court also reopened the lead plaintiff selection process, allowing any putative class member interested in serving as the new lead plaintiff to file a lead plaintiff application. Following the lead plaintiff selection hearing on April 28, 2021, on June 10, 2021 the court appointed California Ironworkers Field Pension Trust as lead plaintiff and approved its appointment of counsel. On May 28, 2021, one of the movants for lead plaintiff, John P. Norton on behalf of the Norton Family Living Trust UAD 11/15/2002, filed a separate class action complaint in the Northern District of California on behalf of a class of persons or entities who transacted in publicly traded call options and/or put options on Nutanix stock during the period from November 30, 2017 and May 30, 2019, containing allegations substantively the same as those alleged in the Current Complaint (the "Options Class Action") and naming the same defendants. On September 8, 2021, the court appointed the John P. Norton on behalf of the Norton Family Living Trust UAD 11/15/2002 as the lead plaintiff in the Options Class Action. On November 1, 2021, the defendants filed a motion to dismiss the Options Class Action complaint on the grounds that it is barred by the statute of limitations. The litigation is still in the early stages, and we plan to continue to vigorously defend against the allegations and we are not able to determine what, if any, liabilities will attach to the Current Complaint or the Options Class Action.

We are not currently a party to any other legal proceedings that we believe to be material to our business or financial condition. From time to time, we may become party to various litigation matters and subject to claims that arise in the ordinary course of business.

Convertible Senior Notes - Components of Notes (Parenthetical) (Details) - Convertible Debt - USD ($) $ in Millions	Oct. 31, 2021	Jul. 31, 2021
2023 Convertible Senior Notes
Debt Instrument [Line Items]
Effective interest rate	0.41%	6.62%
Payments of offering costs		$ (3.0)
2026 Convertible Senior Notes
Debt Instrument [Line Items]
Effective interest rate	7.05%
2027 Convertible Senior Notes
Debt Instrument [Line Items]
Effective interest rate	0.52%

Revenue, Deferred Revenue and Deferred Commissions - Revenue by Arrangement, Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Condensed Income Statements, Captions [Line Items]
Total revenue	$ 378,517	$ 312,754
Subscription
Condensed Income Statements, Captions [Line Items]
Total revenue	337,901	278,165
Non-portable software
Condensed Income Statements, Captions [Line Items]
Total revenue	14,337	20,043
Hardware
Condensed Income Statements, Captions [Line Items]
Total revenue	2,163	729
Professional services
Condensed Income Statements, Captions [Line Items]
Total revenue	$ 24,116	$ 13,817

Convertible Senior Notes

3 Months Ended

Oct. 31, 2021

Debt Disclosure [Abstract]

Convertible Senior Notes

NOTE 5. CONVERTIBLE SENIOR NOTES

2023 Notes

In January 2018, we issued the 2023 Notes with a 0% interest rate for an aggregate principal amount of $575.0 million, due in 2023, in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act. This included $75.0 million in aggregate principal amount of the 2023 Notes that we issued resulting from initial purchasers fully exercising their option to purchase additional notes. There are no required principal payments prior to the maturity of the 2023 Notes. The total net proceeds from the issuance of the 2023 Notes were as follows:


	Amount
	(in thousands)
Principal amount	$	575,000
Less: initial purchasers' discount		(10,781	)
Less: cost of the bond hedges		(143,175	)
Add: proceeds from the sale of warrants		87,975
Less: other issuance costs		(707	)
Net proceeds	$	508,312

The 2023 Notes do not bear any interest and will mature on January 15, 2023, unless earlier converted or repurchased in accordance with their terms. The 2023 Notes are unsecured and do not contain any financial covenants or any restrictions on the payment of dividends, or the issuance or repurchase of securities by us.

Each $1,000 of principal of the 2023 Notes will initially be convertible into 20.4705 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $48.85 per share, subject to adjustment upon the occurrence of specified events. Holders of these 2023 Notes may convert their 2023 Notes at their option at any time prior to the close of the business day immediately preceding October 15, 2022, only under the following circumstances:

(1)

during any fiscal quarter commencing after the fiscal quarter ending on April 30, 2018 (and only during such fiscal quarter), if the last reported sale price of 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 on each applicable trading day;

(2)

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 2023 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 2023 Notes on each such trading day; or

(3)

upon the occurrence of certain specified corporate events.

Based on the closing price of our Class A common stock of $34.31 on October 31, 2021, the if-converted value of the 2023 Notes was lower than the principal amount. The price of our Class A common stock was not greater than or equal to 130% of the conversion price for 20 or more trading days during the 30 consecutive trading days ending on the last trading day of the quarter ended October 31, 2021. As such, the 2023 Notes are not convertible for the fiscal quarter commencing after October 31, 2021.

On or after October 15, 2022, holders may convert all or any portion of their 2023 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing conditions.

Upon conversion of the 2023 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election. We intend to settle the principal of the 2023 Notes in cash.

The conversion rate will be subject to adjustment in some events, but will not be adjusted for any accrued or unpaid interest. A holder who converts their 2023 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" per the indenture governing the 2023 Notes are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a fundamental change prior to the maturity date, holders may require us to repurchase for cash all or a portion of their 2023 Notes at a repurchase price equal to 100% of the principal amount of the repurchased 2023 Notes, plus accrued and unpaid interest.

We may not redeem the 2023 Notes prior to the maturity date, and no sinking fund is provided for the 2023 Notes.

On September 22, 2021, we consummated privately negotiated exchanges with certain holders of the outstanding 2023 Notes, pursuant to which such holders exchanged approximately $416.5 million in aggregate principal amount of 2023 Notes for $477.3 million in aggregate principal amount of 2027 Notes. We also entered into privately negotiated transactions with certain holders of the 2023 Notes pursuant to which we repurchased approximately $12.8 million in aggregate principal amount of 2023 Notes for cash. Following the closing of these exchanges and repurchases, approximately $145.7 million in aggregate principal amount of 2023 Notes remains outstanding with terms unchanged.

The 2023 Notes consisted of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	575,000		$	145,704
Unamortized debt discount (1)		(48,616	)		—
Unamortized debt issuance costs (1)		(2,713	)		(692	)
Net carrying amount	$	523,671		$	145,012
Carrying amount of equity component (2)	$	148,598		$	—

(1)

(2)

Included in the consolidated balance sheet as of July 31, 2021 within additional paid-in capital, net of $3.0 million in equity issuance costs.

As of October 31, 2021, the remaining life of the 2023 Notes was approximately 14 months.

The following table sets forth the total interest expense recognized related to the 2023 Notes:


	Three Months Ended October 31,
	2020		2021
	(in thousands)
Interest expense related to amortization of debt discount	$	7,725	$	—
Interest expense related to amortization of debt issuance costs		431		400
Total interest expense	$	8,156	$	400

Note Hedges and Warrants

Concurrently with the offering of the 2023 Notes in January 2018, we entered into convertible note hedge transactions with certain bank counterparties, whereby we have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a conversion price of approximately $48.85 per share, subject to adjustment for certain specified events. The total cost of the convertible note hedge transactions was approximately $143.2 million. In addition, we sold warrants to certain bank counterparties, whereby the holders of the warrants have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a price of $73.46 per share, subject to adjustment for certain specified events. We received approximately $88.0 million in cash proceeds from the sale of these warrants.

Taken together, the purchase of the convertible note hedges and the sale of warrants are intended to offset any actual dilution from the conversion of the 2023 Notes and to effectively increase the overall conversion price from $48.85 to $73.46 per share. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded within stockholders’ equity and are not accounted for as derivatives. The net cost incurred in connection with the convertible note hedge and warrant transactions of approximately $55.2 million was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheets as of July 31, 2021 and October 31, 2021. The fair value of the note hedges and warrants are not remeasured each reporting period. The amounts paid for the note hedges were tax deductible expenses, while the proceeds received from the warrants were not taxable.

In September 2021, in connection with the exchange and repurchase transactions described above, we terminated portions of the convertible note hedge transactions and warrant transactions previously entered into with certain financial institutions in connection with the issuance of the 2023 Notes. The net effect of these unwind transactions was a $21.5 million cash payment received, consisting of an $18.4 million payment for the warrant unwind and the receipt of $39.9 million from the hedge unwind. The amounts paid and received as part of the unwind transactions were recorded to additional paid-in capital within the condensed consolidated balance sheet.

The note hedges are required to be excluded from the calculation of diluted earnings per share, as they would be antidilutive. In periods when we report a net loss, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive, and the potential impact of the 2023 Notes is therefore excluded.

The warrants will have a dilutive effect when the average share price exceeds the warrant strike price of $73.46 per share. As the price of our Class A common stock continues to increase above the warrant strike price, additional dilution would occur at a declining rate so that a $10 increase from the warrant strike price would yield a cumulative dilution of approximately 0.4 million diluted shares for EPS purposes. However, upon conversion, the note hedges would neutralize the dilution from the 2023 Notes so that there would only be dilution from the warrants, which would result in an actual dilution of approximately 2.1 million shares at a common stock price of $83.46.

2026 Notes

In September 2020, we issued $750.0 million in aggregate principal amount of the 2026 Notes to BCPE Nucleon (DE) SVP, LP, an entity affiliated with Bain Capital, LP ("Bain"). The total net proceeds from this offering were approximately $723.7 million, after deducting $26.3 million of debt issuance costs.

The 2026 Notes bear interest at a rate of 2.5% per annum, with such interest to be paid in kind ("PIK") on the 2026 Notes held by Bain through an increase in the principal amount of the 2026 Notes, and paid in cash on any 2026 Notes transferred to entities that are not affiliated with Bain. Interest on the 2026 Notes will accrue from the date of issuance (September 24, 2020) and be added to the principal amount on a semi-annual basis (March 15 and September 15 of each year, beginning on March 15, 2021). The 2026 Notes mature on September 15, 2026, subject to earlier conversion, redemption or repurchase.

The 2026 Notes will be convertible into our shares of Class A common stock based on an initial conversion rate of 36.036 shares of common stock per $1,000 principal amount of the 2026 Notes, which is equal to an initial conversion price of $27.75 per share, subject to customary anti-dilution and other adjustments, including in connection with any make-whole adjustments as a result of certain extraordinary transactions. In September 2021, the one-year anniversary of the 2026 Notes, the conversion price was subject to a one-time adjustment, based on the level of achievement of certain financial milestones and as a result, the conversion price became fixed at $27.75 per share.

On or after September 15, 2025, the 2026 Notes will be redeemable by us in the event that the closing sale price of our Class A common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice, for cash, at a redemption price of 100% of the principal amount of such 2026 Notes, plus any accrued and unpaid interest to, but excluding, the redemption date.

With certain exceptions, upon a change of control or a fundamental change, the holders of the 2026 Notes may require us to repurchase all or part of the principal amount of the 2026 Notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, we will, in certain circumstances, increase the conversion rate for any 2026 Notes converted in connection with a change of control or a fundamental change.

In accordance with accounting guidance on embedded conversion features, we valued and bifurcated the conversion option associated with the 2026 Notes from the respective host debt instrument, which is treated as a debt discount, and initially recorded the conversion option of $230.9 million as a derivative liability in our condensed consolidated balance sheet, with the corresponding amount recorded as a discount to the 2026 Notes to be amortized over the term of the 2026 Notes using the effective interest method.

The 2026 Notes consisted of the following:


	As of
	July 31, 2021			October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	750,000		$	750,000
Non-cash interest expense converted to principal		8,906			18,393
Unamortized debt discount (conversion feature) (1)		(203,619	)		(195,298	)
Unamortized debt issuance costs (1)		(23,264	)		(22,314	)
Net carrying amount	$	532,023		$	550,781

(1)

As of October 31, 2021, the remaining life of the 2026 Notes was approximately 4.9 years.

The following table sets forth the total interest expense recognized related to the 2026 Notes:


	Three Months Ended October 31,
	2020		2021
			(in thousands)
Interest expense related to amortization of debt discount	$	3,187	$	8,320
Interest expense related to amortization of debt issuance costs		365		951
Non-cash interest expense		1,952		4,773
Total interest expense	$	5,504	$	14,044

Non-cash interest expense is related to the 2.5% PIK interest that we accrued from the issuance of the 2026 Notes through October 31, 2021 and was recognized within other expense, net in the condensed consolidated statement of operations and other liabilities–non-current in the condensed consolidated balance sheet. The accrued PIK interest will be converted to the principal balance of the 2026 Notes at each payment date and will be convertible to shares at maturity or when converted.

Upon the conversion price of the 2026 Notes becoming fixed in September 2021, the embedded conversion option for the 2026 Notes no longer required bifurcation because the conversion features are now considered indexed to our own equity and meet the equity classification conditions. The carrying amount of the derivative liability of $698.2 million as of that date was reclassified to additional paid-in capital within the condensed consolidated balance sheet. The remaining debt discount that arose from the original bifurcation continues to be amortized over the term of the 2026 Notes.

2027 Notes

In September 2021, we issued $575 million principal amount of 0.25% convertible senior notes due 2027 consisting of (i) approximately $477.3 million principal amount of 2027 Notes in exchange for approximately $416.5 million principal amount of the 2023 Notes (the "Exchange Transactions") and (ii) approximately $97.7 million principal amount of 2027 Notes for cash (the "Subscription Transactions"). We did not receive any cash proceeds from the Exchange Transactions. The net cash proceeds from the Subscription Transactions was approximately $88.4 million after deducting the offering expenses for both the Exchange Transactions and the Subscription Transactions. We used (i) approximately $14.7 million of the net cash proceeds from the Subscription Transactions to repurchase approximately $12.8 million principal amount of the 2023 Notes and (ii) approximately $58.5 million of the net cash proceeds from the Subscription Transactions to repurchase approximately 1.4 million shares of our Class A common stock.

The 2027 Notes bear interest at a rate of 0.25% per annum, and will pay interest semi-annually in arrears on each April 1 and October 1, commencing on April 1, 2022. The 2027 Notes will mature on October 1, 2027, unless earlier converted, redeemed or repurchased.

The 2027 Notes will be convertible into cash, shares of our Class A common stock, or a combination of cash and shares of Class A common stock, at our election. Each $1,000 of principal of the 2027 Notes will initially be convertible into 17.3192 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $57.74 per share, subject to customary anti-dilution adjustments. Holders of these 2027 Notes may convert their 2027 Notes at their option at any time prior to the close of the business day immediately preceding July 1, 2027, only under the following circumstances:

(1)

during any fiscal quarter after January 31, 2022, and only during such fiscal quarter, if the closing price of our common stock for at least 20 trading days in a period of 30 consecutive trading days ending on, and including, the last trading day of the preceding fiscal quarter is greater than or equal to 130% of the then applicable conversion price for the Notes per share of common stock;

(2)

during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2027 Notes for such trading day was less than 98% of the product of the closing price of our common stock and the then applicable conversion rate on each such trading day; or

(3)

upon the occurrence of certain specified corporate events.

Upon conversion of the 2027 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election. We intend to settle the principal of the 2027 Notes in cash.

The conversion rate will be subject to adjustment in some events, but will not be adjusted for any accrued or unpaid interest. A holder who converts their 2027 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" per the indenture governing the 2027 Notes are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a fundamental change prior to the maturity date, holders may require us to repurchase for cash all or a portion of their 2027 Notes at a repurchase price equal to 100% of the principal amount of the repurchased 2027 Notes, plus accrued and unpaid interest.

In accounting for the exchange of convertible notes, we evaluated whether the transaction should be treated as a modification or extinguishment transaction. The partial exchange of the 2023 Notes and issuance of the 2027 Notes were deemed to have substantially different terms due to the significant difference between the value of the conversion option immediately prior to and after the exchange, and consequently, the 2023 Notes partial exchange was accounted for as a debt extinguishment. The $64.9 million difference between the total reacquisition price paid and the net carrying amount of the 2023 Notes is recognized as a debt extinguishment loss within other expense, net in the condensed consolidated statement of operations.

The 2027 Notes consisted of the following:


	As of October 31, 2021
	(in thousands)
Principal amounts:
Principal	$	575,000
Unamortized debt issuance costs (1)		(9,137	)
Net carrying amount	$	565,863

(1)

As of October 31, 2021, the remaining life of the 2027 Notes was approximately 5.9 years.

The following table sets forth the total interest expense recognized related to the 2027 Notes:


	Three Months Ended October 31,
	2021
	(in thousands)
Contractual interest expense	$	152
Interest expense related to amortization of debt issuance costs		160
Total interest expense	$	312

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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