What changed in this filing

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Item 1. Financial Statements

2020-08-28 compared with 2020-05-28 · 183 added, 167 removed, 606 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands)

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Current assets:

29 unchanged sentences

Additional paid-in capital 5,954,738 5,090,187

Treasury stock ( 303,201 ) —

Accumulated other comprehensive income (loss) 646 23,492

3 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Workday, Inc.

1 unchanged sentence

(in thousands, except per share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Subscription services $ 931,698 $ 757,155 $ 1,813,654 $ 1,458,179

8 unchanged sentences

Total costs and expenses 1,078,721 1,010,249 2,241,563 1,958,690

Operating loss ( 144,457 ) ( 123,386 )

Operating income (loss) ( 16,754 ) ( 122,497 ) ( 161,211 ) ( 245,883 )

Other income (expense), net ( 11,453 ) ( 106 ) ( 22,426 ) 7,035

11 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Workday, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Net loss $ ( 28,016 ) $ ( 120,712 ) $ ( 186,384 ) $ ( 236,987 )

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Net change in foreign currency translation adjustment 1,684 53 437 ( 593 )

Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision of $ 0 , $ 212 , $ 0 , and $ 431 , respectively

( 728 ) 889 2,246 1,592

Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $ 0 , $ 2,629 , $ 0 , and $ 4,610 , respectively

( 57,836 ) 18,403 ( 25,529 ) 32,268

Other comprehensive income (loss), net of tax 34,034 13,922

Other comprehensive (loss) income, net of tax ( 56,880 ) 19,345 ( 22,846 ) 33,267

Comprehensive loss $ ( 84,896 ) $ ( 101,367 ) $ ( 209,230 ) $ ( 203,720 )

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Workday, Inc.

1 unchanged sentence

(in thousands, except share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Common stock:

1 unchanged sentence

Issuance of common stock under employee equity plans 1 2 5 6

Vested restricted stock units 3 3

Settlement of convertible senior notes 2 — 2 —

Balance, end of period 238 227 238 227

2 unchanged sentences

Issuance of common stock under employee equity plans 70,939 58,083 74,512 61,534

Vested restricted stock units ( 3 ) ( 3 )

Share-based compensation 250,431 208,819 486,841 394,023

Exercise of convertible senior notes hedges 303,202 — 303,202 —

Settlement of convertible senior notes ( 4 ) — ( 4 ) —

Cumulative-effect of accounting changes — — — 381

Balance, end of period 5,954,738 4,561,272 5,954,738 4,561,272

Treasury stock:

Balance, beginning of period — — — —

Exercise of convertible senior notes hedges ( 303,201 ) — ( 303,201 ) —

Balance, end of period ( 303,201 ) — ( 303,201 ) —

Accumulated other comprehensive income (loss):

Balance, beginning of period 57,526 13,113 23,492 ( 809 )

Other comprehensive income (loss) 34,034 13,922

Other comprehensive (loss) income ( 56,880 ) 19,345 ( 22,846 ) 33,267

Balance, end of period 646 32,458 646 32,458

5 unchanged sentences

Total stockholders’ equity $ 2,838,478 $ 2,210,285 $ 2,838,478 $ 2,210,285

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Common stock (in shares):

1 unchanged sentence

Issuance of common stock under employee equity plans 1,991,097 2,170,403 5,452,773 5,555,334

Vested restricted stock units 2,664,085 2,666,099

Settlement of convertible senior notes 1,654,302 197 1,654,308 197

Purchase of treasury stock from the exercise of convertible senior notes hedges ( 1,654,757 ) — ( 1,654,757 ) —

Balance, end of period 237,160,715 227,607,594 237,160,715 227,607,594

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Workday, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Cash flows from operating activities:

7 unchanged sentences

Other 12,430 ( 4,851 ) 16,800 ( 11,697 )

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of business combinations:

Trade and other receivables, net ( 109,316 ) ( 73,437 ) 181,586 83,942

11 unchanged sentences

Capital expenditures, excluding owned real estate projects ( 66,555 ) ( 75,576 ) ( 126,495 ) ( 141,111 )

Business combinations, net of cash acquired — ( 12,885 ) — ( 12,885 )

Purchases of non-marketable equity and other investments ( 6,350 ) ( 5,516 ) ( 58,600 ) ( 7,716 )

Sales and maturities of non-marketable equity and other investments 1,561 — 6,199 —

Other — ( 32 ) — ( 9 )

Net cash provided by (used in) investing activities ( 202,638 ) ( 320,745 ) ( 479,985 ) ( 388,100 )

10 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Supplemental cash flow data:

3 unchanged sentences

Purchases of property and equipment, accrued but not paid 49,987 46,910 49,987 46,910

As of April 30,

As of July 31,

Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows:

4 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

Table of Conten t s

Workday, Inc.

2 unchanged sentences

Company and Background

Workday delivers financial management, human capital management, planning, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies.

Workday delivers financial management, human resources, planning, spend management, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies.

We offer innovative and adaptable technology focused on the consumer internet experience and cloud delivery model.

Our applications are designed for global enterprises to manage complex and dynamic operating environments.

We provide our customers highly adaptable, accessible, and reliable applications to manage critical business functions that help enable them to optimize their financial and human capital resources.

We provide our customers highly adaptable, accessible, and reliable applications to manage critical business functions that help enable them to optimize their financial and human resources.

We were originally incorporated in March 2005 in Nevada, and in June 2012, we reincorporated in Delaware.

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All such adjustments are of a normal, recurring nature.

The results of operations for the quarter ended April 30, 2020, shown in this report are not necessarily indicative of the results to be expected for the full year ending January 31, 2021.

The results of operations for the quarter ended July 31, 2020, shown in this report are not necessarily indicative of the results to be expected for the full year ending January 31, 2021.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the SEC on March 3, 2020.

9 unchanged sentences

Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level.

Table of Conten t s

Accounting Standards

20 unchanged sentences

Subsequent impact on our condensed consolidated financial statements will depend on the magnitude of implementation costs to be incurred.

Implementation costs capitalized subsequent to adoption will be recognized in operating expenses on our condensed consolidated statements of operations over the noncancellable period of the hosting arrangement plus any renewal periods reasonably certain to be taken.

Implementation costs capitalized subsequent to adoption will be recognized in operating expenses on our condensed consolidated statements of operations over the noncancelable period of the hosting arrangement plus any renewal periods reasonably certain to be taken.

In December 2019, the FASB issued ASU No.

5 unchanged sentences

The adoption of this new standard did not have a material impact on our condensed consolidated financial statements.

Table of Conten t s

Recently Issued Accounting Pronouncements

4 unchanged sentences

The impact on our condensed consolidated financial statements from the adoption of this standard is expected to be immaterial.

In August 2020, the FASB issued ASU No.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes.

This new standard is effective for our interim and annual periods beginning February 1, 2022, and earlier adoption is permitted.

We may elect to apply the amendments on a retrospective or modified retrospective basis.

We are currently evaluating the impact of the adoption of this standard on our condensed consolidated financial statements.

Debt Securities

As of April 30, 2020, debt securities consisted of the following (in thousands):

As of July 31, 2020, debt securities consisted of the following (in thousands):

Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value

16 unchanged sentences

We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date.

We consider all debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets in the accompanying condensed consolidated balance sheets.

Debt securities included in Marketable securities on the condensed consolidated balance sheets consist of securities with original maturities at the time of purchase greater than three months, and the remainder of the securities is included in Cash and cash equivalents.

The unrealized losses associated with our debt securities were immaterial as of April 30, 2020, and January 31, 2020, and we did not recognize any credit losses related to our debt securities during the three months ended April 30, 2020.

We sold $ 5 million of our debt securities during the three months ended April 30, 2020.

There were no sales of debt securities during the three months ended April 30, 2019.

The unrealized losses associated with our debt securities were immaterial as of July 31, 2020, and January 31, 2020, and we did not recognize any credit losses related to our debt securities during the three and six months ended July 31, 2020.

During the three months ended July 31, 2020, we did no t sell any debt securities.

We sold $ 5 million of our debt securities during the three months ended July 31, 2019, and $ 5 million of our debt securities during each of the six months ended July 31, 2020, and 2019.

The realized gains and losses from the sales were immaterial.

Table of Conten t s

Equity Investments

Equity investments consisted of the following (in thousands):

Condensed Consolidated Balance Sheets Location April 30, 2020 January 31, 2020

Condensed Consolidated Balance Sheets Location July 31, 2020 January 31, 2020

Money market funds Cash and cash equivalents $ 952,987 $ 386,909

8 unchanged sentences

and (2) has the obligation to absorb losses or the right to receive benefits from the VIE.

As of April 30, 2020, there were no VIEs for which we were the primary beneficiary.

As of July 31, 2020, there were no VIEs for which we were the primary beneficiary.

Equity Investments Accounted for Under the Equity Method

6 unchanged sentences

The investment is accounted for under the equity method of accounting as it is considered to be more than minor, and we have the ability to exercise significant influence over the entity.

The carrying value was $ 49 million as of April 30, 2020.

There was no impairment loss recorded on this investment during the three months ended April 30, 2020.

The carrying value was $ 48 million as of July 31, 2020.

There was no impairment loss recorded on this investment during the three and six months ended July 31, 2020.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

1 unchanged sentence

We adjust the carrying values of non-marketable equity investments based on observable price changes from orderly transactions for identical or similar investments of the same issuer.

No material adjustments were made to the carrying values of non-marketable equity investments as measured under the measurement alternative as a result of observable events during the three months ended April 30, 2020, and 2019.

No material adjustments were made to the carrying value of the non-marketable equity investments as measured under the measurement alternative during the three and six months ended July 31, 2020, and 2019.

Additionally, we assess our non-marketable equity investments quarterly for impairment.

Our impairment analysis encompasses an assessment of the severity and duration of the impairment and a qualitative and quantitative analysis of other key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash.

We have also considered the impacts of the coronavirus pandemic (“COVID-19 pandemic”) in our impairment analysis.

We also have considered the impacts of the coronavirus pandemic (“COVID-19 pandemic”) in our impairment analysis.

These factors require significant judgment.

During the three months ended April 30, 2020, we recorded impairment losses on non-marketable equity investments of $ 3 million.

We did no t record any such impairment losses during the three months ended April 30, 2019.

We did no t record any impairment losses on non-marketable equity investments for the three months ended July 31, 2020, and we recorded $ 3 million of impairment losses for the six months ended July 31, 2020.

We did no t record any such impairment losses during the three and six months ended July 31, 2019.

Non-marketable equity investments that have been remeasured during the period due to an observable event or impairment are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the investments we hold.

Table of Conten t s

Marketable Equity Investments

We did no t hold marketable equity investments as of April 30, 2020, and January 31, 2020.

There were no sales of marketable equity investments during the three months ended April 30, 2020.

We sold $ 51 million of marketable equity investments during the three months ended April 30, 2019, with a corresponding gain recognized of $ 7 million.

We did no t hold marketable equity investments as of July 31, 2020, and January 31, 2020.

There were no sales of marketable equity investments during the three and six months ended July 31, 2020, or the three months ended July 31, 2019.

We sold $ 51 million of marketable equity investments during the six months ended July 31, 2019, with a corresponding gain recognized of $ 7 million.

Total realized and unrealized gains and losses associated with our equity investments consisted of the following (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Net realized gains (losses) recognized on equity investments sold $ — $ — $ 1,591 $ 6,844

9 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2020 (in thousands):

Level 1 Level 2 Level 3 Total

19 unchanged sentences

Total liabilities $ — $ 3,996 $ — $ 3,996

Table of Conten t s

Fair Value Measurements of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of our financial instruments that are not recorded at fair value on the condensed consolidated balance sheets (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Net Carrying Amount Estimated Fair Value Net Carrying Amount Estimated Fair Value

3 unchanged sentences

1,041,562 1,544,450 1,017,967 1,587,978

In June 2013, we completed an offering of $ 250 million of 1.50 % convertible senior notes due July 15, 2020 (“2020 Notes”).

In June 2013, we completed an offering of $ 250 million of 1.50 % convertible senior notes due July 15, 2020 (“2020 Notes”), which were subsequently converted during the three months ended July 31, 2020.

In September 2017, we completed an offering of $ 1.15 billion of 0.25 % convertible senior notes due October 1, 2022 (“2022 Notes” and together with the 2020 Notes, the “Notes”).

The carrying amounts of the Notes represent the liability components of the principal balances as of April 30, 2020, and January 31, 2020.

The carrying amounts of the Notes represent the liability components of the principal balances as of July 31, 2020, and January 31, 2020.

The estimated fair values of the Notes, which we have classified as Level 2 financial instruments, were determined based on the quoted bid prices of the Notes in an over-the-counter market on the last trading day of each reporting period.

The if-converted values of the 2020 and 2022 Notes exceeded the principal amounts by $ 221 million and $ 53 million, respectively.

The if-converted values were determined based on the closing price of our common stock of $ 153.90 on April 30, 2020.

The if-converted value of the 2022 Notes exceeded the principal amount by $ 264 million.

The if-converted value was determined based on the closing price of our common stock of $ 180.92 on July 31, 2020.

For further information, see Note 10, Debt.

In April 2020, we entered into a credit agreement (“Credit Agreement”) pursuant to which the lenders would extend to Workday a senior unsecured term loan facility in an aggregate principal amount of $ 750 million (“Term Loan,”) and an unsecured revolving credit facility in an aggregate principal amount of $ 750 million (“Revolving Credit Facility”).

As of April 30, 2020, the carrying value of the Term Loan was $ 498 million, and there were no outstanding borrowings under the Revolving Credit Facility.

As of July 31, 2020, the carrying value of the Term Loan was $ 748 million, and there were no outstanding borrowings under the Revolving Credit Facility.

The estimated fair value of the Term Loan, which we have classified as a Level 2 financial instrument, approximates the carrying value because it is a floating rate facility.

1 unchanged sentence

Deferred Costs

Deferred costs, which consist of deferred sales commissions, were $ 315 million and $ 323 million as of April 30, 2020, and January 31, 2020, respectively.

Amortization expense for the deferred costs was $ 26 million and $ 21 million for the three months ended April 30, 2020, and 2019, respectively.

Deferred costs, which consist of deferred sales commissions, were $ 329 million and $ 323 million as of July 31, 2020, and January 31, 2020, respectively.

Amortization expense for the deferred costs was $ 27 million and $ 22 million for the three months ended July 31, 2020, and 2019, respectively, and $ 53 million and $ 43 million for the six months ended July 31, 2020, and 2019, respectively.

There was no impairment loss in relation to the costs capitalized for the periods presented.

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Land and land improvements $ 37,065 $ 38,737

6 unchanged sentences

Property and equipment, net $ 957,434 $ 936,179

Depreciation expense totaled $ 55 million and $ 41 million for the three months ended April 30, 2020, and 2019, respectively.

No interest costs were capitalized to Property and equipment, net during the three months ended April 30, 2020.

Interest costs capitalized to Property and equipment, net totaled $ 4 million for the three months ended April 30, 2019.

Table of Conten t s

Depreciation expense totaled $ 57 million and $ 47 million for the three months ended July 31, 2020, and 2019, respectively, and $ 112 million and $ 88 million for the six months ended July 31, 2020, and 2019, respectively.

No interest costs were capitalized to Property and equipment, net during the three and six months ended July 31, 2020.

Interest costs capitalized to Property and equipment, net totaled $ 2 million and $ 6 million for the three and six months ended July 31, 2019, respectively.

Acquisition-Related Intangible Assets, Net

Acquisition-related intangible assets, net consisted of the following (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Developed technology $ 218,400 $ 218,400

5 unchanged sentences

Acquisition-related intangible assets, net $ 276,847 $ 308,401

Amortization expense related to acquisition-related intangible assets was $ 16 million and $ 19 million for the three months ended April 30, 2020, and 2019, respectively.

As of April 30, 2020, our future estimated amortization expense related to acquisition-related intangible assets is as follows (in thousands):

Amortization expense related to acquisition-related intangible assets was $ 16 million and $ 20 million for the three months ended July 31, 2020, and 2019, respectively, and $ 32 million and $ 39 million for the six months ended July 31, 2020, and 2019, respectively.

As of July 31, 2020, our future estimated amortization expense related to acquisition-related intangible assets is as follows (in thousands):

Fiscal Period:

3 unchanged sentences

Other assets consisted of the following (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Non-marketable equity and other investments (1)

2 unchanged sentences

Prepayments for goods and services 22,711 27,928

Derivative assets 24,751 9,529

Technology patents and other intangible assets, net 16,282 17,898

Deposits 7,389 6,335

Net deferred tax assets 7,450 6,912

Deposits 5,847 6,335

Derivative assets 4,440 9,529

Other 1,880 999

1 unchanged sentence

(1) Included in non-marketable equity and other investments are investments in loan receivables of privately held companies, which are carried at amortized cost.

The carrying values of these loan receivables were $ 13 million and $ 16 million as of April 30, 2020, and January 31, 2020, respectively.

As of April 30, 2020, allowance for credit losses on this balance was immaterial.

Table of Conten t s

The carrying values of these loan receivables were $ 13 million and $ 16 million as of July 31, 2020, and January 31, 2020, respectively.

As of July 31, 2020, the allowance for credit losses on this balance was immaterial.

Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis.

As of April 30, 2020, the future estimated amortization expense is as follows (in thousands):

As of July 31, 2020, the future estimated amortization expense is as follows (in thousands):

Fiscal Period:

14 unchanged sentences

Gains or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated balance sheets and will be subsequently reclassified to the related revenue line item on the condensed consolidated statements of operations in the same period that the underlying revenues are earned.

As of April 30, 2020, we estimate that $ 21 million of net gains recorded in AOCI related to our foreign currency forward contracts designated as cash flow hedges will be reclassified into income within the next 12 months.

As of April 30, 2020, and January 31, 2020, we had outstanding foreign currency forward contracts designated as cash flow hedges with total notional values of $ 1.0 billion and $ 908 million, respectively.

As of July 31, 2020, we estimate that $ 12 million of net gains recorded in AOCI related to our foreign currency forward contracts designated as cash flow hedges will be reclassified into income within the next 12 months.

As of July 31, 2020, and January 31, 2020, we had outstanding foreign currency forward contracts designated as cash flow hedges with total notional values of $ 1.1 billion and $ 908 million, respectively.

The notional value represents the amount that will be bought or sold upon maturity of the forward contract.

5 unchanged sentences

Cash flows from such forward contracts are classified as operating activities.

As of April 30, 2020, and January 31, 2020, we had outstanding forward contracts not designated as hedges with total notional values of $ 99 million and $ 246 million, respectively.

Table of Conten t s

As of July 31, 2020, and January 31, 2020, we had outstanding forward contracts not designated as hedges with total notional values of $ 119 million and $ 246 million, respectively.

The fair values of outstanding derivative instruments were as follows (in thousands):

Condensed Consolidated Balance Sheets Location April 30, 2020 January 31, 2020

Condensed Consolidated Balance Sheets Location July 31, 2020 January 31, 2020

Derivative assets:

11 unchanged sentences

The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations was as follows (in thousands):

Condensed Consolidated Statements of Operations Location Three Months Ended April 30,

Condensed Consolidated Statements of Operations Location Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Total revenues Revenues $ 1,061,967 $ 887,752 $ 2,080,352 $ 1,712,807

1 unchanged sentence

Pre-tax gains (losses) associated with foreign currency forward contracts designated as cash flow hedges were as follows (in thousands):

Condensed Consolidated Statements of Operations and Statements of Comprehensive Loss Locations Three Months Ended April 30,

Condensed Consolidated Statements of Operations and Statements of Comprehensive Loss Locations Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Gains (losses) recognized in OCI Net change in market value of effective foreign currency forward exchange contracts $ ( 52,558 ) $ 21,928 $ ( 15,765 ) $ 37,790

1 unchanged sentence

Gains (losses) associated with foreign currency forward contracts not designated as hedges were as follows (in thousands):

Condensed Consolidated Statements of Operations Location Three Months Ended April 30,

Condensed Consolidated Statements of Operations Location Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Foreign currency forward contracts not designated as hedges Other income (expense), net $ ( 4,040 ) $ 2,229 $ 1,373 $ 4,627

Table of Conten t s

We are subject to master netting agreements with certain counterparties of the foreign exchange contracts, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other.

2 unchanged sentences

We manage our exposure to counterparty risk by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions.

As of April 30, 2020, information related to these offsetting arrangements was as follows (in thousands):

As of July 31, 2020, information related to these offsetting arrangements was as follows (in thousands):

Gross Amounts of Recognized Assets Gross Amounts Offset on the Condensed Consolidated Balance Sheets Net Amounts of Assets Presented on the Condensed Consolidated Balance Sheets Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets Net Assets Exposed

13 unchanged sentences

Outstanding debt consisted of the following (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

2020 Notes, net of unamortized debt discounts of $ 0 and $ 5,319 , respectively, and unamortized debt issuance costs of $ 0 and $ 307 , respectively

6 unchanged sentences

Total debt, noncurrent $ 1,752,004 $ 1,017,967

As of April 30, 2020, expected future principal payments on our outstanding debt are as follows (in thousands):

As of July 31, 2020, expected future principal payments on our outstanding debt are as follows (in thousands):

Fiscal Period:

3 unchanged sentences

Total $ 1,900,000

Table of Conten t s

Convertible Senior Notes

In June 2013, we issued 1.50 % convertible senior notes due July 15, 2020, with a principal amount of $ 250 million.

The 2020 Notes are unsecured, unsubordinated obligations, and interest is payable in cash in arrears at a fixed rate of 1.50 % on January 15 and July 15 of each year.

The 2020 Notes mature on July 15, 2020, unless repurchased or converted in accordance with their terms prior to such date.

We cannot redeem the 2020 Notes prior to maturity.

The 2020 Notes were unsecured, unsubordinated obligations, and interest was payable in cash in arrears at a fixed rate of 1.50 % on January 15 and July 15 of each year.

During the three months ended July 31, 2020, the 2020 Notes were converted by note holders, and we repaid the $ 250 million principal balance in cash.

We also distributed approximately 1.7 million shares of our Class A common stock to note holders during the three months ended July 31, 2020, which represents the conversion value in excess of the principal amount.

In September 2017, we issued 0.25 % convertible senior notes due October 1, 2022, with a principal amount of $ 1.15 billion.

2 unchanged sentences

We cannot redeem the 2022 Notes prior to maturity.

The terms of the Notes are governed by Indentures by and between us and Wells Fargo Bank, National Association, as Trustee (“Indentures”).

The terms of the 2022 Notes are governed by an Indenture by and between us and Wells Fargo Bank, National Association, as Trustee (“Indenture”).

Upon conversion, holders of the 2022 Notes will receive cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at our election.

For the 2020 Notes, the initial conversion rate is 12.2340 shares of Class A common stock per $ 1,000 principal amount, which is equal to an initial conversion price of approximately $ 81.74 per share of Class A common stock, subject to adjustment.

Prior to the close of business on March 13, 2020, conversion of the 2020 Notes is subject to the satisfaction of certain conditions, as described below.

For the 2022 Notes, the initial conversion rate is 6.7982 shares of Class A common stock per $ 1,000 principal amount, which is equal to an initial conversion price of approximately $ 147.10 per share of Class A common stock, subject to adjustment.

The initial conversion rate for the 2022 Notes is 6.7982 shares of Class A common stock per $ 1,000 principal amount, which is equal to an initial conversion price of approximately $ 147.10 per share of Class A common stock, subject to adjustment.

Prior to the close of business on May 31, 2022, conversion of the 2022 Notes is subject to the satisfaction of certain conditions, as described below.

Holders of the Notes who convert their Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the Indentures) are, under certain circumstances, entitled to an increase in the conversion rate.

Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the Indentures), holders of the Notes may require us to repurchase all or a portion of their Notes at a price equal to 100 % of the principal amount of the Notes, plus any accrued and unpaid interest.

Holders of the 2020 Notes and 2022 Notes may convert all or a portion of their Notes prior to the close of business on March 13, 2020, and May 31, 2022, respectively, in multiples of $1,000 principal amount, only under the following circumstances:

• if the last reported sale price of our Class A common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price of the respective Notes on each applicable trading day;

• during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the respective Notes for each day of that five day consecutive trading day period was less than 98 % of the product of the last reported sale price of Class A common stock and the conversion rate of the respective Notes on such trading day;

• upon the occurrence of specified corporate events, as noted in the Indentures.

On or after March 15, 2020, for the 2020 Notes and June 1, 2022, for the 2022 Notes, holders of the respective Notes may convert their Notes at any time until the close of business on the second scheduled trading day immediately preceding the respective maturity date of their Notes.

Holders of the 2022 Notes who convert their 2022 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture) are, under certain circumstances, entitled to an increase in the conversion rate.

Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the Indenture), holders of the 2022 Notes may require us to repurchase all or a portion of their 2022 Notes at a price equal to 100 % of the principal amount of the 2022 Notes, plus any accrued and unpaid interest.

Holders of the 2022 Notes may convert all or a portion of their 2022 Notes prior to the close of business on May 31, 2022, in multiples of $1,000 principal amount, only under the following circumstances:

• during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2022 Notes for each day of that five day consecutive trading day period was less than 98 % of the product of the last reported sale price of Class A common stock and the conversion rate of the 2022 Notes on such trading day;

• upon the occurrence of specified corporate events, as noted in the Indenture.

On or after June 1, 2022, holders of the 2022 Notes may convert their 2022 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2022 Notes.

As of July 31, 2020, and January 31, 2020, the 2022 Notes are classified as noncurrent on the condensed consolidated balance sheets since the criteria for conversion was not met.

In accounting for the issuance of the Notes, we separated each of the Notes into liability and equity components.

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These differences represent debt discounts that are amortized to interest expense over the respective terms of the Notes using the effective interest rate method.

The gross carrying amounts of the equity components are $ 68 million and $ 223 million for the 2020 Notes and 2022 Notes, respectively, and are included in Additional paid-in capital on the condensed consolidated balance sheets.

The gross carrying amounts of the equity components recorded were $ 68 million and $ 223 million for the 2020 Notes and 2022 Notes, respectively, and were included in Additional paid-in capital on the condensed consolidated balance sheets upon issuance.

The equity components are not remeasured as long as they continue to meet the conditions for equity classification.

The effective interest rate of the liability component of the 2020 Notes was 6.25 %, and the effective interest rate of the liability component of the 2022 Notes is 4.60 %.

The interest rates were based on the interest rates of similar liabilities at the time of issuance that did not have associated convertible features.

In accounting for the issuance costs related to the Notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values.

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The issuance costs attributable to the equity components were netted against the respective equity components in Additional paid-in capital.

For the 2020 Notes, we recorded liability issuance costs of $ 5 million and equity issuance costs of $ 2 million, and for the 2022 Notes, we recorded liability issuance costs of $ 14 million and equity issuance costs of $ 4 million.

Table of Conten t s

The effective interest rates of the liability components of the 2020 Notes and 2022 Notes are 6.25 % and 4.60 %, respectively.

These interest rates were based on the interest rates of similar liabilities at the time of issuance that did not have associated convertible features.

The 2020 Notes are classified as current on the condensed consolidated balance sheets as of April 30, 2020, and January 31, 2020, as they are due within one year.

As of the date of this filing, the amount of the principal balance of the 2020 Notes that has been converted or for which conversion has been requested was not material.

The 2022 Notes are classified as noncurrent on the condensed consolidated balance sheets as of April 30, 2020, and January 31, 2020, since the criteria for conversion was not met.

Upon issuance of the 2020 Notes, we recorded liability issuance costs of $ 5 million and equity issuance costs of $ 2 million, and upon issuance of the 2022 Notes, we recorded liability issuance costs of $ 14 million and equity issuance costs of $ 4 million.

In connection with the issuance of the Notes, we entered into convertible note hedge transactions with respect to our Class A common stock (“Purchased Options”).

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The amounts paid for the Purchased Options are included in Additional paid-in capital on the condensed consolidated balance sheets.

The Purchased Options relating to the 2020 Notes give us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2020 Notes, approximately 3.1 million shares of our Class A common stock for $ 81.74 per share, exercisable upon conversion of the 2020 Notes.

The Purchased Options relating to the 2020 Notes gave us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2020 Notes, approximately 3.1 million shares of our Class A common stock for $ 81.74 per share, exercisable upon conversion of the 2020 Notes.

During the three months ended July 31, 2020, we received approximately 1.7 million shares of our Class A common stock from the exercise of the Purchased Options relating to the 2020 Notes.

These shares are held as treasury stock as of July 31, 2020.

The Purchased Options relating to the 2022 Notes give us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2022 Notes, approximately 7.8 million shares of our Class A common stock for $ 147.10 per share, exercisable upon conversion of the 2022 Notes.

The Purchased Options will expire in 2020 for the 2020 Notes and in 2022 for the 2022 Notes, if not exercised earlier.

The Purchased Options relating to the 2022 Notes will expire in 2022, if not exercised earlier.

In connection with the issuance of the Notes, we also entered into warrant transactions to sell warrants (“Warrants”) to acquire, subject to anti-dilution adjustments, up to approximately 3.1 million shares over 60 scheduled trading days beginning in October 2020 and 7.8 million shares over 60 scheduled trading days beginning in January 2023 of our Class A common stock at an exercise price of $ 107.96 and $ 213.96 per share, respectively.

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The financial covenant, based on a quarterly financial test, requires Workday not to exceed a maximum leverage ratio of 3.50 :1.00, subject to a step-up to 4.50 :1.00 at the election of Workday for a certain period following an Acquisition (as defined in the Credit Agreement).

As of April 30, 2020, we were in compliance with all covenants.

The Term Loan may be funded in two individual tranches.

On April 2, 2020, $ 500 million of the Term Loan was funded, and the remaining $ 250 million may be funded until July 15, 2020.

Table of Conten t s

As of July 31, 2020, we were in compliance with all covenants.

The Term Loan was funded in two individual tranches.

On April 2, 2020, $ 500 million of the Term Loan was funded, and the remaining $ 250 million was funded on July 13, 2020.

The Term Loan matures on April 2, 2025, and provides for quarterly repayment in installments of the principal amount, beginning October 2020, at a rate of 1.25 % of the principal amount per quarter through January 2022, and 2.50 % of the principal amount per quarter thereafter.

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The debt discount and issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the contractual term of the arrangement.

As of April 30, 2020, the Term Loan had a carrying value of $ 498 million, of which $ 19 million is classified as current, and $ 479 million is classified as noncurrent on the condensed consolidated balance sheet.

As of April 30, 2020, the interest rate on the Term Loan was 2.43 %, and the effective interest rate was 2.56 %.

As of July 31, 2020, the Term Loan had a carrying value of $ 748 million, of which $ 38 million is classified as current and $ 710 million is classified as noncurrent on the condensed consolidated balance sheet.

As of July 31, 2020, the interest rate on the Term Loan was 2.12 % and the effective interest rate was 2.46 %.

Revolving Credit Facility

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The fees are recorded in Other assets on the condensed consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement.

As of April 30, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

As of July 31, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

Interest Expense on Debt

The following table sets forth total interest expense recognized related to our debt (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Contractual interest expense $ 4,799 $ 1,657 $ 7,430 $ 3,313

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We have entered into operating lease agreements for our office space, data centers, and other property and equipment.

As of April 30, 2020, and January 31, 2020, operating lease right-of-use assets were $ 310 million and $ 291 million, respectively, and operating lease liabilities were $ 325 million and $ 308 million, respectively.

As of July 31, 2020, and January 31, 2020, operating lease right-of-use assets were $ 325 million and $ 291 million, respectively, and operating lease liabilities were $ 347 million and $ 308 million, respectively.

We have also entered into finance lease agreements for other property and equipment.

As of April 30, 2020, and January 31, 2020, finance leases were not material.

As of July 31, 2020, and January 31, 2020, finance leases were not material.

The components of operating lease expense were as follows (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Operating lease cost $ 22,336 $ 18,961 $ 43,235 $ 37,475

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Total operating lease cost $ 31,302 $ 28,304 $ 61,003 $ 53,884

Table of Conten t s

Supplemental cash flow information related to our operating leases was as follows (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Cash paid for operating lease liabilities $ 21,153 $ 19,324 $ 42,165 $ 35,508

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32,216 31,071 70,503 327,021

(1) Prior year activity includes $ 279 million for operating leases existing on February 1, 2019 and $ 17 million for operating leases that commenced in the first quarter of fiscal 2020.

(1) Prior year activity includes $ 279 million for operating leases existing on February 1, 2019, and $ 48 million for operating leases that commenced in the first half of fiscal 2020.

Other information related to our operating leases was as follows:

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

Weighted average remaining lease term (in years) 6 6

Weighted average discount rate 3.08 % 3.36 %

As of April 30, 2020, maturities of operating lease liabilities are as follows (in thousands):

As of July 31, 2020, maturities of operating lease liabilities are as follows (in thousands):

Fiscal Period:

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Total $ 347,405

As of April 30, 2020, we have additional operating leases, primarily for office space and data centers, that have not yet commenced with total undiscounted lease payments of $ 41 million.

These operating leases will commence in fiscal 2021, with lease terms ranging from one to ten years .

As of July 31, 2020, we have additional operating leases, primarily for office space and data centers, that have not yet commenced with total undiscounted lease payments of $ 22 million.

These operating leases will commence in the remaining months of fiscal 2021, with lease terms ranging from one to five years .

Related-Party Lease Transactions

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Duffield, adjacent to our corporate headquarters in Pleasanton, California, under various lease agreements.

As of April 30, 2020, the operating lease right-of-use assets and operating lease liabilities related to these agreements were $ 55 million and $ 67 million, respectively.

The operating lease right-of-use assets and operating lease liabilities related to these agreements were $ 55 million and $ 67 million, respectively, as of July 31, 2020, and $ 57 million and $ 70 million, respectively, as of January 31, 2020.

The weighted average remaining lease term of these agreements is four years .

The total rent expense under these agreements was $ 4 million and $ 3 million for the three months ended April 30, 2020, and 2019, respectively.

The total rent expense under these agreements was $ 4 million and $ 3 million for the three months ended July 31, 2020, and 2019, respectively, and $ 7 million and $ 6 million for the six months ended July 31, 2020, and 2019, respectively.

Commitments and Contingencies

Third-Party Hosted Infrastructure Platform-Related Commitments

We have entered into non-cancelable agreements with third-party hosted infrastructure platform vendors with various expiration dates.

As of April 30, 2020, future non-cancelable minimum payments under these agreements were approximately $ 471 million.

We have entered into noncancelable agreements with third-party hosted infrastructure platform vendors with various expiration dates.

As of July 31, 2020, future noncancelable minimum payments under these agreements were approximately $ 466 million.

Legal Matters

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These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

In our opinion, as of April 30, 2020, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies.

Table of Conten t s

In our opinion, as of July 31, 2020, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies.

Stockholders’ Equity

As of April 30, 2020, there were 174 million shares of Class A common stock, and 61 million shares of Class B common stock outstanding.

As of July 31, 2020, there were 177 million shares of Class A common stock, net of treasury stock, and 60 million shares of Class B common stock outstanding.

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion.

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Our 2012 Equity Incentive Plan (“EIP”) serves as the successor to our 2005 Stock Plan (together with the EIP, the “Stock Plans”).

As of April 30, 2020, we had approximately 63 million shares of Class A common stock available for future grants.

As of July 31, 2020, we had 63 million shares of Class A common stock available for future grants.

We also have a 2012 Employee Stock Purchase Plan (“ESPP”).

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Options to purchase shares are granted twice yearly on or about June 1, and December 1, and exercisable on or about the succeeding November 30, and May 31, respectively, of each year.

As of April 30, 2020, approximately 5 million shares of Class A common stock were available for issuance under the ESPP.

As of July 31, 2020, 5 million shares of Class A common stock were available for issuance under the ESPP.

Restricted Stock Units

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RSUs generally vest over four years .

A summary of information related to RSU activity during the three months ended April 30, 2020, is as follows:

A summary of information related to RSU activity during the six months ended July 31, 2020, is as follows:

Number of Shares Weighted-Average Grant Date Fair Value

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RSUs forfeited ( 565,835 ) 145.37

Balance as of April 30, 2020 16,865,306 148.22

As of April 30, 2020, there was a total of $ 2.4 billion in unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately three years .

Balance as of July 31, 2020 15,694,066 149.82

As of July 31, 2020, there was a total of $ 2.2 billion in unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately three years .

Performance-Based Restricted Stock Units

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These performance conditions were met and the PRSUs vested on March 15, 2020.

During the three months ended April 30, 2020, we recognized $ 19 million in compensation cost related to these PRSUs.

Table of Conten t s

During the six months ended July 31, 2020, we recognized $ 19 million in compensation cost related to these PRSUs.

Additionally, during the second quarter of fiscal 2021, 0.6 million shares of PRSUs were granted to all employees other than executive management that included both service conditions and performance conditions related to company-wide goals.

We expect to grant additional shares related to this program for employees hired in fiscal 2021.

These PRSU awards will vest if the performance conditions are achieved for the fiscal year ended January 31, 2021, and if the individual employee continues to provide service through the vesting date of March 15, 2021.

During each of the three and six months ended July 31, 2020, we recognized $ 19 million in compensation cost related to these PRSUs.

A total of $ 90 million in unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately seven months .

Stock Options

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Stock options issued under the Stock Plans generally are exercisable for periods not to exceed ten years and generally vest over five years .

A summary of information related to stock option activity during the three months ended April 30, 2020, is as follows (in millions, except share and per share data):

A summary of information related to stock option activity during the six months ended July 31, 2020, is as follows (in millions, except share and per share data):

Outstanding Stock Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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Stock options canceled ( 18,719 ) 42.92

Balance as of April 30, 2020 2,633,915 11.35 375

Vested and expected to vest as of April 30, 2020 2,617,530 11.20 374

Exercisable as of April 30, 2020 2,316,950 8.59 337

As of April 30, 2020, there was a total of $ 27 million in unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately one year .

Balance as of July 31, 2020 2,261,454 11.34 383

Vested and expected to vest as of July 31, 2020 2,251,777 11.23 382

Exercisable as of July 31, 2020 2,030,205 8.91 349

As of July 31, 2020, there was a total of $ 19 million in unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately one year .

Unearned Revenue and Performance Obligations

Subscription services revenue of $ 809 million and $ 642 million was recognized during the three months ended April 30, 2020, and 2019, respectively, that was included in the unearned revenue balances as of January 31, 2020, and 2019, respectively.

Subscription services revenue of $ 824 million and $ 677 million was recognized during the three months ended July 31, 2020, and 2019, respectively, that was included in the unearned revenue balances as of April 30, 2020, and 2019, respectively.

Subscription services revenue of $ 1.46 billion and $ 1.18 billion was recognized during the six months ended July 31, 2020, and 2019, respectively, that was included in the unearned revenue balances as of January 31, 2020, and 2019, respectively.

Professional services revenue recognized in the same periods from unearned revenue balances at the beginning of the respective periods was not material.

Transaction Price Allocated to the Remaining Performance Obligations

As of April 30, 2020, approximately $ 8.19 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts.

As of July 31, 2020, approximately $ 8.60 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts.

We expect to recognize revenue on approximately $ 5.78 billion of these remaining performance obligations over the next 24 months, with the balance recognized thereafter.

Revenue from remaining performance obligations for professional services contracts as of April 30, 2020, was not material.

Revenue from remaining performance obligations for professional services contracts as of July 31, 2020, was not material.

Other Income (Expense), Net

Other income (expense), net consisted of the following (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Interest income $ 4,978 $ 11,239 $ 12,845 $ 21,589

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We compute the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss and adjust for discrete tax items in the period.

We reported income tax expense of $ 3 million and less than $0.1 million for the three months ended April 30, 2020, and 2019, respectively.

The income tax expense for the three months ended April 30, 2020, was primarily attributable to state taxes and income tax expenses in profitable foreign jurisdictions.

There were no intra-period tax allocations for the gains from comprehensive income due to the prospective adoption of ASU No.

We reported an income tax expense of $ 3 million and an income tax benefit of $ 2 million for each of the six-month periods ended July 31, 2020, and 2019, respectively.

The income tax expense for the six months ended July 31, 2020, was primarily attributable to state taxes and income tax expenses in profitable foreign jurisdictions.

There were no intra-period tax allocations for the gains from comprehensive income due to the adoption of ASU No.

2019-12 on February 1, 2020.

The income tax expense for the three months ended April 30, 2019, was primarily attributable to state taxes and income tax expenses in profitable foreign jurisdictions, partially offset by the application of intra-period tax allocation rules for the gains from comprehensive income and the excess tax benefits in certain foreign jurisdictions from share-based compensation.

Table of Conten t s

The income tax benefit for the six months ended July 31, 2019, was primarily attributable to the application of intra-period tax allocation rules for the gains from comprehensive income and the excess tax benefits in certain foreign jurisdictions from share-based compensation, partially offset by state taxes and income tax expenses in profitable foreign jurisdictions.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic.

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We evaluated the applicable provisions of the CARES Act and determined that there is no material impact to our financial results.

On June 22, 2020, the U.S.

Supreme Court declined to hear the appeal of a ruling by the U.S.

Court of Appeals for the Ninth Circuit regarding the treatment of stock-based compensation expenses in a cost-sharing agreement (Altera Corporation & Subsidiaries v.

Commissioner).

Supreme Court decision resulted in an immaterial reduction in our deferred tax assets relative to the total gross deferred tax assets, which was fully offset by our valuation allowance.

As a result, there was no net impact on our condensed consolidated financial statements.

We are subject to income tax audits in the U.S.

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The realization of net deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.

As of April 30, 2020, we continue to maintain a full valuation allowance on our deferred tax assets except in certain jurisdictions.

As of July 31, 2020, we continue to maintain a full valuation allowance on our deferred tax assets except in certain jurisdictions.

Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including our outstanding stock options, common stock related to unvested RSUs and PRSUs, common stock related to convertible senior notes to the extent dilutive, outstanding warrants, and common stock issuable pursuant to the ESPP.

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The following table presents the calculation of basic and diluted net loss attributable to common stockholders per share (in thousands, except per share data):

Three Months Ended April 30,

Class A Class B Class A Class B

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

Class A Class B Class A Class B Class A Class B Class A Class B

Net loss per share, basic and diluted:

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Basic and diluted net loss per share $ ( 0.12 ) $ ( 0.12 ) $ ( 0.53 ) $ ( 0.53 ) $ ( 0.79 ) $ ( 0.79 ) $ ( 1.05 ) $ ( 1.05 )

The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows (in thousands):

As of April 30,

Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows (in thousands):

As of July 31,

Outstanding common stock options 2,261 4,512

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Total 37,744 40,946

Table of Conten t s

Geographic Information

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The following table sets forth revenue by geographic area (in thousands):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2020 2019 2020 2019

United States $ 805,056 $ 676,568 $ 1,567,396 $ 1,305,097

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Total $ 1,061,967 $ 887,752 $ 2,080,352 $ 1,712,807

No single country other than the United States had revenues greater than 10% of total revenues for the three months ended April 30, 2020, and 2019.

No customer individually accounted for more than 10% of our trade and other receivables, net as of April 30, 2020, or January 31, 2020.

No single country other than the United States had revenues greater than 10% of total revenues for the three and six months ended July 31, 2020, and 2019.

No customer individually accounted for more than 10% of our trade and other receivables, net as of July 31, 2020, or January 31, 2020.

Long-Lived Assets

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Aggregate Property and equipment, net, and Operating lease right-of-use assets by geographic area was as follows (in thousands):

April 30, 2020 January 31, 2020

July 31, 2020 January 31, 2020

United States $ 1,084,136 $ 1,064,292

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Total $ 1,282,089 $ 1,227,081

Table of Conten t s

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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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