What changed in this filing

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Item 1. Financial Statements

2022-05-20 compared with 2022-02-23 · 112 added, 102 removed, 561 unchanged (28% of the section changed)

3 unchanged sentences

(in millions, except per share data)

January 31, 2022 July 31, 2021

April 30, 2022 July 31, 2021

Current assets:

1 unchanged sentence

Short-term investments 1,454.7 1,026.9

Accounts receivable, net of allowance for credit losses of $ 13.0 and $ 11.2 at January 31, 2022 and July 31, 2021, respectively

Accounts receivable, net of allowance for credit losses of $ 9.6 and $ 11.2 at April 30, 2022 and July 31, 2021, respectively

1,240.6 1,240.4

28 unchanged sentences

100.0 shares authorized;

none issued and outstanding at January 31, 2022 and July 31, 2021

none issued and outstanding at April 30, 2022 and July 31, 2021

Common stock and additional paid-in capital;

1 unchanged sentence

1,000.0 shares authorized;

98.5 and 97.3 shares issued and outstanding at January 31, 2022 and July 31, 2021, respectively

99.6 and 97.3 shares issued and outstanding at April 30, 2022 and July 31, 2021, respectively

2,066.3 2,311.2

8 unchanged sentences

(Unaudited, in millions, except per share data)

Three Months Ended Six Months Ended

January 31, January 31,

Three Months Ended Nine Months Ended

April 30, April 30,

2022 2021 2022 2021

14 unchanged sentences

Interest expense ( 6.8 ) ( 41.0 ) ( 20.5 ) ( 121.9 )

Other income (expense), net ( 0.1 ) ( 0.5 ) ( 1.7 ) 1.9

Other income, net 1.9 1.0 0.2 2.9

Loss before income taxes ( 52.5 ) ( 150.4 ) ( 224.5 ) ( 362.7 )

Provision for income taxes 12.7 12.3 25.1 22.2

Provision for (benefit from) income taxes 20.7 ( 5.3 ) 45.8 16.9

Net loss $ ( 73.2 ) $ ( 145.1 ) $ ( 270.3 ) $ ( 379.6 )

6 unchanged sentences

(Unaudited, in millions)

Three Months Ended Six Months Ended

January 31, January 31,

Three Months Ended Nine Months Ended

April 30, April 30,

2022 2021 2022 2021

10 unchanged sentences

(Unaudited, in millions)

Three Months Ended January 31, 2022

Three Months Ended April 30, 2022

Additional Paid-In Capital Accumulated

3 unchanged sentences

Shares Amount

Balance as of October 31, 2021 98.7 $ 2,033.9 $ ( 11.3 ) $ ( 1,503.7 ) $ 518.9

Balance as of January 31, 2022 98.5 $ 1,745.2 $ ( 30.2 ) $ ( 1,597.2 ) $ 117.8

Net loss — — — ( 73.2 ) ( 73.2 )

3 unchanged sentences

Share-based compensation for equity-based awards — 254.5 — — 254.5

Repurchase and retirement of common stock ( 1.0 ) ( 550.0 ) — — ( 550.0 )

Balance as of January 31, 2022 98.5 $ 1,745.2 $ ( 30.2 ) $ ( 1,597.2 ) $ 117.8

Three Months Ended January 31, 2021

Balance as of April 30, 2022 99.6 $ 2,066.3 $ ( 58.3 ) $ ( 1,670.4 ) $ 337.6

Three Months Ended April 30, 2021

Additional Paid-In Capital Accumulated

3 unchanged sentences

Shares Amount

Balance as of October 31, 2020 95.2 $ 2,003.9 $ 3.2 $ ( 1,260.1 ) $ 747.0

Balance as of January 31, 2021 97.2 $ 2,429.8 $ 9.9 $ ( 1,402.4 ) $ 1,037.3

Net loss — — — ( 145.1 ) ( 145.1 )

3 unchanged sentences

Share-based compensation for equity-based awards — 248.7 — — 248.7

Issuance of common and restricted common stock in connection with acquisitions 1.3 340.7 — — 340.7

Repurchase and retirement of common stock ( 1.0 ) ( 350.0 ) — — ( 350.0 )

Temporary equity reclassification — 161.2 — — 161.2

Balance as of January 31, 2021 97.2 $ 2,429.8 $ 9.9 $ ( 1,402.4 ) $ 1,037.3

Balance as of April 30, 2021 97.4 $ 2,541.1 $ 3.6 $ ( 1,547.5 ) $ 997.2

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Six Months Ended January 31, 2022

Nine Months Ended April 30, 2022

Additional Paid-In Capital Accumulated

6 unchanged sentences

Net loss — — — ( 270.3 ) ( 270.3 )

Other comprehensive income — — ( 20.3 ) — ( 20.3 )

Other comprehensive loss — — ( 48.4 ) — ( 48.4 )

Issuance of common stock in connection with employee equity incentive plans 3.3 137.0 — — 137.0

2 unchanged sentences

Repurchase and retirement of common stock ( 1.0 ) ( 550.0 ) — — ( 550.0 )

Balance as of January 31, 2022 98.5 $ 1,745.2 $ ( 30.2 ) $ ( 1,597.2 ) $ 117.8

Six Months Ended January 31, 2021

Balance as of April 30, 2022 99.6 $ 2,066.3 $ ( 58.3 ) $ ( 1,670.4 ) $ 337.6

Nine Months Ended April 30, 2021

Additional Paid-In Capital Accumulated

5 unchanged sentences

Net loss — — — ( 379.6 ) ( 379.6 )

Other comprehensive income — — ( 0.6 ) — ( 0.6 )

Other comprehensive loss — — ( 6.9 ) — ( 6.9 )

Issuance of common stock in connection with employee equity incentive plans 2.9 103.7 — — 103.7

3 unchanged sentences

Issuance of common and restricted common stock in connection with acquisitions 1.3 340.7 — — 340.7

Temporary equity reclassification — ( 161.2 ) — — ( 161.2 )

Balance as of January 31, 2021 97.2 $ 2,429.8 $ 9.9 $ ( 1,402.4 ) $ 1,037.3

Balance as of April 30, 2021 97.4 $ 2,541.1 $ 3.6 $ ( 1,547.5 ) $ 997.2

See notes to condensed consolidated financial statements.

3 unchanged sentences

(Unaudited, in millions)

Six Months Ended

Nine Months Ended

Cash flows from operating activities

9 unchanged sentences

Accounts receivable, net

( 0.1 ) 301.3

Deferred contract costs ( 257.1 ) ( 235.1 )

2 unchanged sentences

Accounts payable

59.8 ( 23.6 )

Accrued compensation

28 unchanged sentences

Total cash, cash equivalents, and restricted cash $ 2,426.3 $ 1,892.3

Non-cash investing and financing activities

Equity consideration for business acquisitions $ ( 2.5 ) $ ( 365.4 )

See notes to condensed consolidated financial statements .

17 unchanged sentences

We base our estimates on historical experience and also on assumptions that we believe are reasonable.

Actual results could differ materially from those estimates due to risks and uncertainties, including uncertainty in the economic environment due to the global impact of the coronavirus disease discovered in 2019 (“COVID-19”).

Actual results could differ materially from those estimates due to risks and uncertainties, including uncertainty in the economic environment such as the global impact of the coronavirus disease discovered in 2019 (“COVID-19”).

Summary of Significant Accounting Policies

There have been no material changes to our significant accounting policies as of and for the six months ended January 31, 2022, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021, except for the change in our accounting policies due to our adoption of recently issued guidance.

There have been no material changes to our significant accounting policies as of and for the nine months ended April 30, 2022, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021, except for the change in our accounting policies due to our adoption of recently issued guidance.

Refer to “Recently Adopted Accounting Pronouncements” below.

33 unchanged sentences

The following table presents revenue by geographic theater (in millions):

Three Months Ended January 31, Six Months Ended January 31,

Three Months Ended April 30, Nine Months Ended April 30,

2022 2021 2022 2021

6 unchanged sentences

The following table presents revenue for groups of similar products and services (in millions):

Three Months Ended January 31, Six Months Ended January 31,

Three Months Ended April 30, Nine Months Ended April 30,

2022 2021 2022 2021

6 unchanged sentences

Deferred Revenue

During the six months ended January 31, 2022 and 2021, we recognized approximately $ 1.6 billion and $ 1.2 billion of revenue pertaining to amounts that were deferred as of July 31, 2021 and 2020, respectively.

During the nine months ended April 30, 2022 and 2021, we recognized approximately $ 2.2 billion and $ 1.6 billion of revenue pertaining to amounts that were deferred as of July 31, 2021 and 2020, respectively.

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Remaining Performance Obligations

Revenue expected to be recognized from remaining performance obligations was $ 6.3 billion as of January 31, 2022, of which we expect to recognize approximately $ 3.4 billion over the next 12 months and the remainder thereafter.

Revenue expected to be recognized from remaining performance obligations was $ 6.9 billion as of April 30, 2022, of which we expect to recognize approximately $ 3.6 billion over the next 12 months and the remainder thereafter.

Fair Value Measurements

6 unchanged sentences

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The following table presents the fair value of our financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2022 and July 31, 2021 (in millions):

January 31, 2022 July 31, 2021

The following table presents the fair value of our financial assets and liabilities measured at fair value on a recurring basis as of April 30, 2022 and July 31, 2021 (in millions):

April 30, 2022 July 31, 2021

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

2 unchanged sentences

Certificates of deposit — 50.0 — 50.0 — 150.4 — 150.4

Commercial paper — 17.9 — 17.9 — — — —

Corporate debt securities — 3.9 — 3.9 — 1.0 — 1.0

32 unchanged sentences

Refer to Note 9.

Debt for the carrying amount and estimated fair value of our convertible senior notes as of January 31, 2022 and July 31, 2021.

Debt for the carrying amount and estimated fair value of our convertible senior notes as of April 30, 2022 and July 31, 2021.

Cash Equivalents and Investments

Available-for-sale Debt Securities

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of January 31, 2022 and July 31, 2021 (in millions):

January 31, 2022

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of April 30, 2022 and July 31, 2021 (in millions):

April 30, 2022

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Cash equivalents:

Certificates of deposit $ 50.0 $ — $ — $ 50.0

Commercial paper 17.9 — — 17.9

Corporate debt securities 3.9 — — 3.9

20 unchanged sentences

We do not intend to sell any of the securities in an unrealized loss position and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity.

We did not recognize any credit losses related to our available-for-sale debt securities during the three and six months ended January 31, 2022 and 2021.

The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of January 31, 2022, by contractual years-to-maturity (in millions):

We did not recognize any credit losses related to our available-for-sale debt securities during the three and nine months ended April 30, 2022 and 2021.

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The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of April 30, 2022, by contractual years-to-maturity (in millions):

Amortized Cost Fair Value

2 unchanged sentences

Due between three to five years 49.6 49.1

Due between five to ten years 4.3 4.3

Total $ 2,265.3 $ 2,241.2

1 unchanged sentence

Marketable equity securities consist of money market funds and are included in cash and cash equivalents on our condensed consolidated balance sheets.

As of January 31, 2022 and July 31, 2021, the carrying values of our marketable equity securities were

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$ 475.0 million and $ 124.2 million, respectively.

There were no unrealized gains or losses recognized for these securities during the three and six months ended January 31, 2022 and 2021.

As of April 30, 2022 and July 31, 2021, the carrying values of our marketable equity securities were $ 923.0 million and $ 124.2 million, respectively.

There were no unrealized gains or losses recognized for these securities during the three and nine months ended April 30, 2022 and 2021.

Financing Receivables

We provide financing arrangements, primarily loans, for qualified end-user customers to purchase our products and services.

The following table summarizes our short-term and long-term financing receivables as of January 31, 2022 and July 31, 2021 (in millions):

January 31, 2022 July 31, 2021

We provide financing arrangements, primarily loans, to qualified end-user customers to purchase our products and services.

The following table summarizes our short-term and long-term financing receivables as of April 30, 2022 and July 31, 2021 (in millions):

April 30, 2022 July 31, 2021

Short-term financing receivables, gross

8 unchanged sentences

$ 177.3 $ 194.3

There was no significant activity in allowance for credit losses during the three and six months ended January 31, 2022 and 2021.

Past due amounts on financing receivables were immaterial as of January 31, 2022 and July 31, 2021.

There was no significant activity in allowance for credit losses during the three and nine months ended April 30, 2022 and 2021.

Past due amounts on financing receivables were immaterial as of April 30, 2022 and July 31, 2021.

Derivative Instruments

3 unchanged sentences

We enter into foreign currency derivative contracts with maturities of 16 months or less, which we designate as cash flow hedges, to manage the foreign currency exchange rate risk associated with these expenditures.

As of January 31, 2022 and July 31, 2021, the total notional amount of our outstanding foreign currency forward contracts including designated and non-designated derivative instruments was $ 584.4 million and $ 531.9 million, respectively.

As of April 30, 2022 and July 31, 2021, the total notional amount of our outstanding foreign currency forward contracts including designated and non-designated derivative instruments was $ 886.7 million and $ 531.9 million, respectively.

Refer to Note 3.

Fair Value Measurements for the fair value of our foreign currency derivative instruments as reported on our condensed consolidated balance sheets as of January 31, 2022 and July 31, 2021.

During the three and six months ended January 31, 2022 and 2021, both unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”) related to our cash flow hedges and amounts reclassified into earnings were not material.

Unrealized gains and losses in AOCI related to our cash flow hedges as of January 31, 2022 and July 31, 2021 were not material.

Fair Value Measurements for the fair value of our foreign currency derivative instruments as reported on our condensed consolidated balance sheets as of April 30, 2022 and July 31, 2021.

During the three and nine months ended April 30, 2022 and 2021, both unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”) related to our cash flow hedges and amounts reclassified into earnings were not material.

Unrealized gains and losses in AOCI related to our cash flow hedges as of April 30, 2022 and July 31, 2021 were not material.

On August 11, 2021, we completed our acquisition of Gamma Networks, Inc.

5 unchanged sentences

The goodwill is not deductible for income tax purposes.

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Goodwill, Intangible Assets and Other Long-lived Assets

The following table presents details of our goodwill during the six months ended January 31, 2022 (in millions):

The following table presents details of our goodwill during the nine months ended April 30, 2022 (in millions):

Balance as of July 31, 2021 $ 2,710.1

Goodwill acquired 21.2

Balance as of January 31, 2022 $ 2,731.3

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Balance as of April 30, 2022 $ 2,731.3

Purchased Intangible Assets

The following table presents details of our purchased intangible assets as of January 31, 2022 and July 31, 2021 (in millions):

January 31, 2022 July 31, 2021

The following table presents details of our purchased intangible assets as of April 30, 2022 and July 31, 2021 (in millions):

April 30, 2022 July 31, 2021

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

6 unchanged sentences

Total purchased intangible assets $ 795.0 $ ( 382.9 ) $ 412.1 $ 788.0 $ ( 289.4 ) $ 498.6

We recognized amortization expense of $ 31.7 million and $ 63.5 million for the three and six months ended January 31, 2022, respectively, and $ 29.7 million and $ 53.3 million for the three and six months ended January 31, 2021, respectively.

The following table summarizes estimated future amortization expense of our intangible assets as of January 31, 2022 (in millions):

We recognized amortization expense of $ 31.8 million and $ 95.3 million for the three and nine months ended April 30, 2022, respectively, and $ 32.8 million and $ 86.1 million for the three and nine months ended April 30, 2021, respectively.

The following table summarizes estimated future amortization expense of our intangible assets as of April 30, 2022 (in millions):

Fiscal years ending July 31,

2 unchanged sentences

Other Long-lived Assets

During the six months ended January 31, 2022, we purchased 4.6 acres of land adjacent to our headquarters in Santa Clara, California, along with the associated buildings, for $ 39.5 million to accommodate future expansion of our headquarters.

This amount was recorded in property and equipment, net on our condensed consolidated balance sheet as of January 31, 2022.

During the nine months ended April 30, 2022, we purchased 4.6 acres of land adjacent to our headquarters in Santa Clara, California, along with the associated buildings, for $ 39.5 million to accommodate future expansion of our headquarters.

This amount was recorded in property and equipment, net on our condensed consolidated balance sheet as of April 30, 2022.

Convertible Senior Notes

8 unchanged sentences

We may redeem for cash all or any portion of the 2025 Notes, at our option, on or after June 5, 2023, and prior to the 31st scheduled trading day immediately preceding the maturity date if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on and including the trading day preceding the date on which we provide notice of redemption.

The redemption will be at a price equal to 100 % of the principal amount of the 2025 Notes and adjusted for interest.

If we call any or all of the 2025 Notes for redemption, holders may convert such 2025 Notes called for redemption at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date.

The redemption will be at a price equal to 100 % of the

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principal amount of the 2025 Notes and adjusted for interest.

The following table presents details of our Notes (number of shares in millions):

11 unchanged sentences

Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” under the applicable Indenture, holders of the Notes of such series may require us to repurchase for cash all or a portion of the Notes of such series at a repurchase price equal to 100 % of the principal amount of the Notes of such series plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The sale price condition for the Notes was met during the fiscal quarter ended January 31, 2022, and as a result, holders may convert their Notes at any time during the fiscal quarter ending April 30, 2022.

Accordingly, the net carrying amount of the Notes was classified as a current liability on our condensed consolidated balance sheet as of January 31, 2022.

The following table sets forth the components of the Notes as of January 31, 2022 and July 31, 2021 (in millions):

January 31, 2022 (1)

The sale price condition for the Notes was met during the fiscal quarter ended April 30, 2022, and as a result, holders may convert their Notes at any time during the fiscal quarter ending July 31, 2022.

Accordingly, the net carrying amount of the Notes was classified as a current liability on our condensed consolidated balance sheet as of April 30, 2022.

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The following table sets forth the components of the Notes as of April 30, 2022 and July 31, 2021 (in millions):

April 30, 2022 (1)

July 31, 2021

10 unchanged sentences

Transaction costs related to the issuance of the notes are netted with the liability and are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes.

The total estimated fair value of the 2023 Notes and 2025 Notes were $ 3.3 billion and $ 3.6 billion at January 31, 2022, respectively and $ 2.6 billion and $ 2.9 billion at July 31, 2021, respectively.

The total estimated fair value of the 2023 Notes and 2025 Notes were $ 3.6 billion and $ 4.0 billion at April 30, 2022, respectively and $ 2.6 billion and $ 2.9 billion at July 31, 2021, respectively.

The fair value was determined based on the closing trading price per $100 of the applicable series of the Notes as of the last day of trading for the period.

We consider the fair value of the Notes

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at January 31, 2022 and July 31, 2021 to be a Level 2 measurement.

We consider the fair value of the Notes at April 30, 2022 and July 31, 2021 to be a Level 2 measurement.

The fair value of the Notes is primarily affected by the trading price of our common stock and market interest rates.

The following table sets forth interest expense recognized related to the Notes (dollars in millions):

Three Months Ended January 31, Six Months Ended January 31,

Three Months Ended April 30, Nine Months Ended April 30,

2022 2021 2022 2021

16 unchanged sentences

The Note Hedges will expire upon maturity of the applicable series of the Notes.

The Note Hedges are separate transactions and are not part of the terms of the applicable series of the Notes.

The Note Hedges are

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separate transactions and are not part of the terms of the applicable series of the Notes.

Holders of the Notes of either series will not have any rights with respect to the Note Hedges.

12 unchanged sentences

Holders of the Notes of either series will not have any rights with respect to the Warrants.

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aggregate proceeds received from the sale of the Warrants are included in additional paid-in capital on our condensed consolidated balance sheets.

The aggregate proceeds received from the sale of the Warrants are included in additional paid-in capital on our condensed consolidated balance sheets.

Revolving Credit Facility

6 unchanged sentences

We do not anticipate that the discontinuance of the LIBO Rate will materially impact our liquidity or financial position.

As of January 31, 2022, there were no amounts outstanding and we were in compliance with all covenants under the Credit Agreement.

As of April 30, 2022, there were no amounts outstanding and we were in compliance with all covenants under the Credit Agreement.

Commitments and Contingencies

2 unchanged sentences

In order to reduce manufacturing lead times and plan for adequate supply, we enter into agreements with manufacturing partners and component suppliers to procure inventory based on our demand forecasts.

The following table presents details of the aggregate future purchase commitments under these arrangements, excluding obligations under contracts that we can cancel without a significant penalty as of January 31, 2022 (in millions):

Fiscal years ending July 31,

2 unchanged sentences

$ 360.6 $ 84.4 $ 171.2 $ 30.0 $ 35.0 $ 40.0 $ —

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Other Purchase Commitments

We have entered into various non-cancelable agreements with certain service providers, under which we are committed to minimum or fixed purchases.

The following table presents details of the aggregate future non-cancelable purchase commitments under these agreements as of January 31, 2022 (in millions):

The following table presents details of the aggregate future non-cancelable purchase commitments under these agreements as of April 30, 2022 (in millions):

Fiscal years ending July 31,

7 unchanged sentences

To the extent there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred and the amount of such additional loss would be material, we will either disclose the estimated additional loss or state that such an estimate cannot be made.

As of January 31, 2022, we have not recorded any significant accruals for loss contingencies associated with such legal proceedings, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable.

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As of April 30, 2022, we have not recorded any significant accruals for loss contingencies associated with such legal proceedings, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable.

Stockholders’ Equity

1 unchanged sentence

In February 2019, our board of directors authorized a $ 1.0 billion share repurchase program, which is funded from available working capital.

In December 2020 and August 2021, our board of directors authorized an additional $ 700.0 million and $ 676.1 million increase, respectively, bringing the total authorization under this share repurchase program to $ 2.4 billion.

In December 2020 and August 2021, our board of directors authorized additional $ 700.0 million and $ 676.1 million increases, respectively, bringing the total authorization under this share repurchase program to $ 2.4 billion.

The expiration date of this repurchase authorization was extended to December 31, 2022, and our repurchase program may be suspended or discontinued at any time.

1 unchanged sentence

The following table summarizes the share repurchase activity under our share repurchase program (in millions, except per share amounts):

Three Months Ended January 31, Six Months Ended January 31,

Three Months Ended April 30, Nine Months Ended April 30,

2022 2021 2022 2021

6 unchanged sentences

(1) Includes transaction costs

As of January 31, 2022, $ 450.0 million remained available for future share repurchases under our current repurchase authorization.

As of April 30, 2022, $ 450.0 million remained available for future share repurchases under our current repurchase authorization.

Equity Award Plans

2021 Equity Incentive Plan

Our 2021 Equity Incentive Plan (our “2021 Plan”) became effective in December 2021 and replaced the 2012 Equity Incentive Plan.

Our 2021 Equity Incentive Plan (our “2021 Plan”) became effective in December 2021 and replaced the 2012 Equity Incentive Plan (our “2012 Plan”).

Our 2021 Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards (“RSA”), restricted stock units (“RSU”), performance share awards (“PSAs”), performance stock units (“PSUs”) and performance stock options (“PSOs”) to our employees, directors, and consultants.

Our 2012 Plan continues to govern the terms of outstanding equity awards that were granted thereunder prior to the adoption of the 2021 Plan.

The majority of our equity awards are RSUs, which generally vest over a period of three to four years from the date of grant.

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We grant PSUs to certain employees, which vest over a period of one to four years from the date of grant.

6 unchanged sentences

The maximum contractual term of our PSOs is seven and a half years from the date of grant, depending on vesting period.

A total of 4.5 million shares of our common stock are reserved for issuance pursuant to our 2021 Plan as of January 31, 2022.

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As of April 30, 2022, all stock price targets for our outstanding PSOs have been satisfied.

A total of 4.7 million shares of our common stock are reserved for issuance pursuant to our 2021 Plan as of April 30, 2022.

PSO Activities

5 unchanged sentences

Forfeited ( 0.1 ) $ 184.24

Balance—January 31, 2022 2.7 $ 194.55 3.7 $ 858.0

Exercisable—January 31, 2022 2.7 $ 194.55 3.7 $ 858.0

Balance—April 30, 2022 2.7 $ 194.55 3.4 $ 974.6

Exercisable—April 30, 2022 2.7 $ 194.55 3.4 $ 974.6

RSU and PSU Activities

6 unchanged sentences

Forfeited ( 0.7 ) $ 280.58 ( 0.1 ) $ 331.76

Balance—January 31, 2022 6.3 $ 311.58 $ 3,245.6 1.2 $ 311.95 $ 605.2

Balance—April 30, 2022 5.6 $ 328.61 $ 3,131.9 1.1 $ 313.09 $ 632.9

______________

(1) For PSUs, shares granted represent the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms.

During the six months ended January 31, 2022, we granted 0.1 million shares of PSUs, which contain service, performance and market conditions.

During the nine months ended April 30, 2022, we granted 0.1 million shares of PSUs, which contain service, performance and market conditions.

The performance condition is based on revenue growth, whereas the market condition measures our total shareholder return (“TSR”) relative to the TSR of the companies listed in the Standard & Poor’s 500 index.

1 unchanged sentence

The fair value of the PSUs subject to the market condition is estimated on the grant date using a Monte Carlo simulation model.

The following table summarizes the assumptions used and the grant-date fair value of our PSUs granted during the six months ended January 31, 2022:

The following table summarizes the assumptions used and the grant-date fair value of our PSUs granted:

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Three Months Ended April 30, 2022 Nine Months Ended April 30, 2022

Volatility 39.1 % - 41.1 %

36.0 % - 41.1 %

Expected term (in years)

2 unchanged sentences

1.5 % - 2.0 %

0.2 % - 2.0 %

Grant-date fair value per share

$ 770.84 - $ 782.13

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$ 411.49 - $ 782.13

Share-Based Compensation

The following table summarizes share-based compensation included in costs and expenses (in millions):

Three Months Ended Six Months Ended

January 31, January 31,

Three Months Ended Nine Months Ended

April 30, April 30,

2022 2021 2022 2021

10 unchanged sentences

Total share-based compensation $ 247.3 $ 242.9 $ 772.7 $ 696.9

As of January 31, 2022, total compensation cost related to unvested share-based awards not yet recognized was $ 2.1 billion.

As of April 30, 2022, total compensation cost related to unvested share-based awards not yet recognized was $ 2.0 billion.

This cost is expected to be amortized over a weighted-average period of approximately 2.6 years .

For the three and six months ended January 31, 2022, our provision for income taxes reflected an effective tax rate of negative 15.7 % and negative 14.6 % , respectively.

For the three and six months ended January 31, 2021, our provision for income taxes reflected an effective tax rate of negative 9.5 % and negative 10.5 %, respectively.

Our effective tax rates for the three and six months ended January 31, 2022 and 2021 were negative as we recorded provision for income taxes on year-to-date losses.

For the three and nine months ended April 30, 2022, our provision for income taxes reflected an effective tax rate of negative 39.4 % and negative 20.4 % , respectively.

For the three and nine months ended April 30, 2021, our provision for income taxes reflected an effective tax rate of 3.5 % and negative 4.7 %, respectively.

Our taxes are primarily due to foreign income tax and withholding tax.

5 unchanged sentences

The following table presents the computation of basic and diluted net loss per share of common stock (in millions, except per share data):

Three Months Ended Six Months Ended

January 31, January 31,

Three Months Ended Nine Months Ended

April 30, April 30,

2022 2021 2022 2021

2 unchanged sentences

Net loss per share, basic and diluted $ ( 0.74 ) $ ( 1.50 ) $ ( 2.75 ) $ ( 3.95 )

Table of Content

The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been antidilutive (in millions):

Three and Six Months Ended

Three and Nine Months Ended

Convertible senior notes 13.1 13.1

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements