PURE STORAGE, INC., 10-Q filed on 12/11/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Oct. 31, 2015
Dec. 3, 2015
Class A Common Stock
Dec. 3, 2015
Class B Common Stock
Document And Entity Information [Line Items]
 
 
 
Document Type
10-Q 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Oct. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
Q3 
 
 
Trading Symbol
PSTG 
 
 
Entity Registrant Name
Pure Storage, Inc. 
 
 
Entity Central Index Key
0001474432 
 
 
Current Fiscal Year End Date
--01-31 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
28,750,000 
161,390,400 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Oct. 31, 2015
Jan. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 573,307 
$ 192,707 
Accounts receivable, net of allowance of $210 and $566 as of January 31, 2015 and October 31, 2015
112,126 
59,032 
Inventory
25,549 
21,605 
Deferred commissions, current
13,612 
9,431 
Prepaid expenses and other current assets
14,028 
11,195 
Total current assets
738,622 
293,970 
Property and equipment, net
47,117 
39,859 
Intangible assets, net
7,306 
8,284 
Deferred income taxes, non-current
4,886 
5,529 
Other long-term assets
20,097 
14,177 
Total assets
818,028 
361,819 
Current liabilities:
 
 
Accounts payable
21,684 
11,007 
Accrued compensation and benefits
25,030 
13,811 
Accrued expenses and other liabilities
14,440 
6,106 
Deferred revenue, current
71,481 
32,199 
Liability related to early exercised stock options
4,942 
6,485 
Deferred income taxes, current
5,186 
5,829 
Total current liabilities
142,763 
75,437 
Deferred revenue—non-current
90,175 
41,470 
Other long-term liabilities
1,136 
802 
Total liabilities
234,074 
117,709 
Commitments and contingencies (Note 5)
Convertible preferred stock, par value of $0.0001 per share— 123,880 and no shares authorized as of January 31, 2015 and October 31, 2015; 122,281 and no shares issued and outstanding as of January 31, 2015 and October 31, 2015
543,940 
Stockholders’ (deficit) equity:
 
 
Preferred stock, par value of $0.0001 per share— no and 20,000 shares authorized as of January 31, 2015 and October 31, 2015; no shares issued and outstanding as of January 31, 2015 and October 31, 2015
Class A and Class B common stock, par value of $0.0001 per share— 230,812 (Class A 1, Class B 230,811) and 2,250,000 (Class A 2,000,000, Class B 250,000) shares authorized as of January 31, 2015 and October 31, 2015; 36,465 (Class B 36,465) and 189,980 (Class A 28,750, Class B 161,230) shares issued and outstanding as of January 31, 2015 and October 31, 2015
19 
Additional paid-in capital
1,094,976 
41,749 
Accumulated deficit
(511,041)
(341,583)
Total stockholders’ (deficit) equity
583,954 
(299,830)
Total liabilities, convertible preferred stock, and stockholders’ (deficit) equity
$ 818,028 
$ 361,819 
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Oct. 31, 2015
Jan. 31, 2015
Accounts receivable, net of allowance
$ 566 
$ 210 
Convertible preferred stock, par value per share
$ 0.0001 
$ 0.0001 
Convertible preferred stock, shares authorized
123,879,952 
Convertible preferred stock, shares issued
122,280,679 
Convertible preferred stock, shares outstanding
122,280,679 
Preferred stock, par value
$ 0.0001 
$ 0.0001 
Preferred stock, shares authorized
20,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, shares authorized
2,250,000,000 
230,812,000 
Common stock, shares issued
189,980,000 
36,465,000 
Common stock, shares outstanding
189,980,000 
36,465,000 
Class A Common Stock
 
 
Common stock, par value per share
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
2,000,000,000 
1,000 
Common stock, shares issued
28,750,000 
 
Common stock, shares outstanding
28,750,000 
 
Class B Common Stock
 
 
Common stock, par value per share
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
250,000,000 
230,811,000 
Common stock, shares issued
161,229,673 
36,465,000 
Common stock, shares outstanding
161,229,673 
36,465,000 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2015
Oct. 31, 2014
Oct. 31, 2015
Oct. 31, 2014
Revenue:
 
 
 
 
Product
$ 113,573 
$ 43,753 
$ 248,383 
$ 97,006 
Support
17,791 
5,436 
41,719 
11,595 
Total revenue
131,364 
49,189 
290,102 
108,601 
Cost of revenue:
 
 
 
 
Product
41,995 
16,676 
92,348 
39,284 
Support
9,058 
3,827 
23,479 
8,751 
Total cost of revenue
51,053 
20,503 
115,827 
48,035 
Gross profit
80,311 
28,686 
174,275 
60,566 
Operating expenses:
 
 
 
 
Research and development
43,065 
22,863 
112,935 
63,396 
Sales and marketing
63,803 
38,224 
171,647 
109,787 
General and administrative
29,022 
7,415 
56,941 
21,834 
Total operating expenses
135,890 
68,502 
341,523 
195,017 
Loss from operations
(55,579)
(39,816)
(167,248)
(134,451)
Other income (expense), net
(171)
(410)
(1,245)
(717)
Loss before provision for income taxes
(55,750)
(40,226)
(168,493)
(135,168)
Provision for income taxes
751 
171 
965 
428 
Net loss
$ (56,501)
$ (40,397)
$ (169,458)
$ (135,596)
Net loss per share attributable to common stockholders, basic and diluted
$ (0.76)
$ (1.43)
$ (3.60)
$ (5.07)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
74,565 
28,280 
47,109 
26,769 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Oct. 31, 2015
Oct. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Net loss
$ (169,458)
$ (135,596)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
23,118 
9,751 
Stock-based compensation expense
36,198 
17,241 
Contribution of common stock to the Pure Good Foundation
11,900 
Other
Changes in operating assets and liabilities:
 
 
Accounts receivable, net
(53,094)
(30,735)
Inventory
(3,420)
(13,072)
Deferred commissions
(8,472)
(4,063)
Prepaid expenses and other assets
(2,065)
(2,368)
Accounts payable
10,224 
4,575 
Accrued compensation and other liabilities
17,216 
7,670 
Deferred revenue
87,987 
36,918 
Net cash used in operating activities
(49,866)
(109,676)
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Purchases of property and equipment
(29,495)
(30,902)
Purchases of intangible assets
(9,125)
Increase in restricted cash
(2,484)
(1,613)
Net cash used in investing activities
(31,979)
(41,640)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Proceeds from initial public offering, net of issuance costs
459,425 
Proceeds from issuance of convertible preferred stock, net of issuance costs
280,820 
Net proceeds from exercise of stock options, including proceeds from repayment of promissory notes
4,710 
7,167 
Repurchase of common stock in connection with a tender offer
(30,120)
Payments of deferred offering costs
(1,690)
Net cash provided by financing activities
462,445 
257,867 
Net increase in cash and cash equivalents
380,600 
106,551 
Cash and cash equivalents, beginning of period
192,707 
130,885 
Cash and cash equivalents, end of period
573,307 
237,436 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
 
Cash paid for income taxes
820 
332 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION
 
 
Conversion of convertible preferred stock to common stock upon initial public offering
543,940 
Purchase of property and equipment
1,750 
1,462 
Vesting of early exercised stock options and restricted stock awards
1,543 
732 
Cashless exercise of stock options during a tender offer
2,057 
Unpaid deferred offering costs
$ 2,748 
$ 0 
Business Overview
Business Overview

Note 1. Business Overview

Organization and Description of Business

Pure Storage, Inc. (the “Company”, “we”, “us”, or other similar pronouns) was originally incorporated in the state of Delaware in October 2009 under the name OS76, Inc. In January 2010, we changed our name to Pure Storage, Inc. We provide an enterprise data storage platform that transforms business through a dramatic increase in performance and reduction in complexity and costs. We are headquartered in Mountain View, California and have wholly owned subsidiaries throughout the world.

Initial Public Offering

In October 2015, we completed our initial public offering (“IPO”) of Class A common stock, in which we sold 28,750,000 shares. The shares were sold at an initial public offering price of $17.00 per share for net proceeds of $459.4 million, after deducting underwriting discounts and commissions of $29.3 million but before deducting offering costs of $4.5 million of which $2.7 million are expected to be paid by the end of our fiscal year ending on January 31, 2016. Upon the closing of our IPO, all outstanding shares of our convertible preferred stock automatically converted into 122,280,679 shares of Class B common stock. Following the IPO, we have two classes of authorized common stock – Class A common stock and Class B common stock.

 

Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Summary of Significant Accounting Policies

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the company and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Unaudited Interim Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our prospectus (the Prospectus) filed pursuant to Rule 424(b) under the Securities Exchange Act of 1933, as amended, with the SEC on October 7, 2015.

The condensed consolidated balance sheet as of January 31, 2015, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP on an annual reporting basis.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year 2016 or any future period.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates. Such estimates include, but are not limited to, the determination of best estimate of selling price included in multiple-deliverable revenue arrangements, sales commissions, useful lives of intangible assets and property and equipment, fair values of stock-based awards, provision for income taxes, including related reserves, among others. Management bases its estimates on historical experience and on various other assumptions which are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Restricted Cash

Restricted cash is comprised of certificates of deposit related to our leases. As of January 31, 2015 and October 31, 2015, we had restricted cash of $4.6 million and $7.1 million, which was included in other long-term assets in the condensed consolidated balance sheets.

Deferred Commissions

Deferred commissions consist of direct and incremental costs paid to our sales force related to customer contracts. The deferred commission amounts are recoverable through the revenue streams that will be recognized under the related customer contracts. Direct sales commissions are deferred when earned and amortized over the same period that revenue is recognized from the related customer contract. Amortization of deferred commissions is included in sales and marketing expense in the condensed consolidated statements of operations.

As of January 31, 2015 and October 31, 2015, we recorded short-term deferred commissions of $9.4 million and $13.6 million, and long-term deferred commissions of $7.5 million and $11.8 million, in other long-term assets in the condensed consolidated balance sheets. During the three and nine months ended October 31, 2014 and October 31, 2015, we recognized sales commission expenses of $11.7 million, $21.8 million, $16.5 million and $38.6 million, respectively.

 

Recent Accounting Pronouncement Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 will supersede nearly all existing revenue recognition guidance under U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, deferring the effective date for ASU 2014-09 by one year, and thus, the new standard will be effective for us beginning on February 1, 2018 with early adoption permitted on or after February 1, 2017. This standard may be adopted using either the full or modified retrospective methods. We are currently evaluating adoption methods and the impact of this standard on our consolidated financial statements.

 

Fair Value Measurements
Fair Value Measurements

Note 3. Fair Value Measurements

We define fair value as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

 

·

Level I—Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

 

·

Level II—Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and

 

·

Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

We classify our money market funds within Level I because they are valued using quoted market prices. We classify our restricted cash within Level II because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.

The following tables set forth the fair value of our financial assets measured at fair value on a recurring basis as of January 31, 2015 and October 31, 2015 using the above input categories (in thousands):

 

 

 

January 31, 2015

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

190,621

 

 

$

 

 

$

 

 

$

190,621

 

Restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

 

 

 

4,648

 

 

 

 

 

 

4,648

 

Total assets measured at fair value

 

$

190,621

 

 

$

4,648

 

 

$

 

 

$

195,269

 

 

 

 

October 31, 2015

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

45,614

 

 

$

 

 

$

 

 

$

45,614

 

Restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

 

 

 

7,132

 

 

 

 

 

 

7,132

 

Total assets measured at fair value

 

$

45,614

 

 

$

7,132

 

 

$

 

 

$

52,746

 

 

Balance Sheet Components
Balance Sheet Components

Note 4. Balance Sheet Components

Property and Equipment, Net

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

 

 

 

January 31,

 

 

October 31,

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

Test equipment

 

$

37,059

 

 

$

58,359

 

Computer, equipment and software

 

 

19,022

 

 

 

25,158

 

Furniture and fixtures

 

 

2,460

 

 

 

2,587

 

Leasehold improvements

 

 

3,776

 

 

 

4,579

 

Total property and equipment

 

 

62,317

 

 

 

90,683

 

Less: accumulated depreciation and amortization

 

 

(22,458

)

 

 

(43,566

)

Property and equipment, net

 

$

39,859

 

 

$

47,117

 

 

Depreciation and amortization expense was $4.1 million and $8.5 million for the three months ended October 31, 2014 and October 31, 2015 and $9.2 million and $22.1 million for the nine months ended October 31, 2014 and October 31, 2015.

Intangible Assets, Net

Intangible assets, net consist of the following (in thousands):

 

 

 

January 31,

2015

 

 

October 31,

2015

 

 

 

 

 

 

 

 

 

Technology patents

 

$

9,125

 

 

$

9,125

 

Accumulated amortization

 

 

(841

)

 

 

(1,819

)

Intangible assets, net

 

$

8,284

 

 

$

7,306

 

 

Intangible assets amortization expense was $306,000 and $326,000 for the three months ended October 31, 2014 and October 31, 2015 and $515,000 and $978,000 for the nine months ended October 31, 2014 and October 31, 2015. Due to the defensive nature of these patents, the amortization is included in general and administrative expenses in the condensed consolidated statements of operations.

As of October 31, 2015, expected amortization expense for intangible assets for each of the next five years and thereafter is as follows (in thousands):

 

Year Ending January 31,

 

Estimated Future

Amortization

Expense

 

Remainder of 2016

 

$

326

 

2017

 

 

1,304

 

2018

 

 

1,304

 

2019

 

 

1,304

 

2020

 

 

1,304

 

Thereafter

 

 

1,764

 

Total

 

$

7,306

 

 

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following (in thousands):

 

 

 

January 31,

 

 

October 31,

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

Sales and use tax payable

 

$

591

 

 

$

583

 

Accrued professional fees

 

 

1,502

 

 

 

2,149

 

Accrued travel and entertainment expenses

 

 

1,138

 

 

 

1,264

 

Income tax payable

 

 

779

 

 

 

941

 

Other accrued liabilities

 

 

2,096

 

 

 

6,786

 

Accrued deferred offering costs

 

 

 

 

 

2,717

 

Total accrued expenses and other liabilities

 

$

6,106

 

 

$

14,440

 

 

Commitments and Contingencies
Commitments and Contingencies

Note 5. Commitments and Contingencies

 

Operating Leases

In August 2015, we entered into certain lease agreements for office facilities with total lease obligations of approximately $19.7 million with lease periods expiring through 2023. In connection with these leases, we are required to maintain letters of credit of up to $3.3 million.

Purchase Obligations

In July 2015 and in November 2015, we entered into non-cancelable contracts of $1.1 million and $6.1 million, respectively, related to certain software services payable through 2018.

Letters of Credit

As of January 31, 2015 and October 31, 2015, we had outstanding letters of credit in the aggregate amount of $4.6 million and $7.1 million in connection with our facility leases. The letters of credit are collateralized by restricted cash in the same amount and mature at various dates through March 2023.

Legal Matters

On November 4, 2013, EMC Corporation, or EMC, filed a complaint against us, alleging that our hiring of EMC employees evidences a scheme to misappropriate EMC’s confidential information and trade secrets and to unlawfully interfere with EMC’s business relationships with its customers and contractual relationships with its employees. The complaint seeks damages and injunctive relief. On November 26, 2013, we answered and counterclaimed, denying EMC’s allegations and alleging that EMC surreptitiously obtained and tested our product in a manner that constituted misappropriation of our trade secrets, a breach of contract, breach of the covenant of good faith and fair dealing, unlawful interference with our contractual and business relationships as well as unfair competition and a violation of Massachusetts General Law 93A, Sections 2 and 11. On November 18, 2014, we amended our counterclaim, additionally alleging that EMC has engaged in commercial disparagement, violated the Lanham Act and engaged in defamation. Our counterclaim seeks damages and declaratory and injunctive relief. Fact discovery deadline has passed.  Expert discovery is scheduled to conclude on March 18, 2016, and the deadline for filing dispositive motions is April 8, 2016.  The district court has scheduled a trial date for October 17, 2016.

On November 26, 2013, EMC filed a complaint against us, alleging infringement of five patents held by EMC. The complaint seeks damages and injunctive and equitable relief. On January 17, 2014, we filed a response to the complaint, denying all claims and asserting that EMC’s patents are invalid. Discovery has concluded. Trial is currently scheduled for March 7, 2016.

We intend to defend these lawsuits vigorously. The outcome, including our liability, if any, with respect to this litigation, is uncertain. At present, we are unable to estimate a reasonably possible range of loss, if any, that may result from these matters. If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition or results of operations.

From time to time, we have become involved in claims and other legal matters arising in the normal course of business. We investigate these claims as they arise. Although claims are inherently unpredictable, we currently are not aware of any matters that may have a material adverse effect on our business, financial position, results of operations or cash flows. Accordingly we have not recorded any loss contingency on our condensed consolidated balance sheets as of January 31, 2015 and October 31, 2015.

 

Line of Credit
Line of Credit

Note 6. Line of Credit

In August 2014, we entered into a two-year loan and security agreement with a financial institution to provide up to $15.0 million on a revolving line based on 80% of qualifying accounts receivable. Borrowings under this revolving line of credit bear interest at prime rate plus 1%. Interest expense is paid on a monthly basis based on the principle amount outstanding under the line of credit. The revolving line of credit matures in August 2016. Early termination is allowed but subject to a non-refundable termination fee of $150,000 if terminated on or after the first year from the effective date of the credit facility.

Borrowings under this line of credit are collateralized by substantially all of our assets, excluding any intellectual property. We are also required to comply with certain financial covenants, including a minimum quarterly revenue target, delivery of financial and other information, as well as limitations on dispositions, mergers, or consolidations and other corporate activities. The terms of our outstanding loan and security agreements also restrict our ability to pay dividends.

As of January 31, 2015 and October 31, 2015, we had no borrowings from this line of credit and we were in compliance with our financial covenants.

In September 2015, we entered into a non-binding engagement letter with Silicon Valley Bank for an additional credit facility pursuant to which Silicon Valley Bank would serve as the lead arranger of a syndicate of banks. In November 2015, the non-binding engagement letter was terminated.

 

    

Convertible Preferred Stock
Convertible Preferred Stock

Note 7. Convertible Preferred Stock

Upon the closing of our IPO in October 2015, all shares of our then-outstanding convertible preferred stock automatically converted on a one-to-one basis into an aggregate of 122,280,679 shares of Class B common stock.  

 

 

Stockholders' Equity
Stockholders’ Equity

Note 8. Stockholders’ Equity

Preferred Stock

Upon the closing of our IPO in October 2015, we filed an Amended and Restated Certificate of Incorporation, which authorized 20,000,000 shares of undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by our board of directors. As of October 31, 2015, there were 20,000,000 shares of preferred stock authorized with a par value of $0.0001 per share, and no shares of preferred stock were issued or outstanding.

Class A and Class B Common Stock

We have two classes of authorized common stock, Class A common stock and Class B common stock. As of October 31, 2015, we had 2,000,000,000 shares of Class A common stock authorized with a par value of $0.0001 per share and 250,000,000 shares of Class B common stock authorized with a par value of $0.0001 per share. As of October 31, 2015, 28,750,000 shares of Class A common stock were issued and outstanding and 161,229,673 shares of Class B common stock were issued and outstanding.

In August 2015, we established the Pure Good Foundation as a non-profit organization, and in September 2015 we issued 700,000 shares of our Class B common stock to this foundation. As a result, we incurred a one-time general and administrative expense of $11.9 million during the three months ended October 31, 2015, the amount of which was equal to the fair value of the shares of Class B common stock issued.  We anticipate that the proposed programs of the Pure Good Foundation will include grants, humanitarian relief, volunteerism and social development projects. We believe that the Pure Good Foundation will foster employee morale, strengthen our community presence and provide increased brand visibility.

Equity Incentive Plans
Equity Incentive Plans

Note 9. Equity Incentive Plans

Equity Incentive Plans

We maintain two equity incentive plans: the 2009 Equity Incentive Plan (our “2009 Plan”) and the 2015 Equity Incentive Plan (our “2015 Plan”). In August 2015, our board of directors adopted, and in September 2015 our stockholders approved, the 2015 Plan, which became effective in connection with our IPO in October 2015 and serves as the successor to our 2009 Plan. We have initially reserved 27,000,000 shares of our Class A common stock for issuance under our 2015 Plan. Our 2015 Plan provides for the issuance of incentive stock options to our employees and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of stock awards to our employees, directors and consultants. No new awards will be issued under our 2009 Plan after the effective date of our 2015 Plan. Outstanding awards granted under our 2009 Plan will remain subject to the terms of our 2009 Plan and applicable award agreements, until such outstanding awards that are stock options are exercised, terminated or expired by their terms, and until any restricted stock awards become vested or are forfeited.

Our equity awards generally vest over a two to four year period and expire no later than ten years from the date of grant. As of October 31, 2015, 26,476,500 shares of our Class A common stock were reserved for future issuance under the 2015 Plan.

2015 Employee Stock Purchase Plan

In August 2015, our board of directors adopted and our stockholders approved, the 2015 Employee Stock Purchase Plan (“2015 ESPP”), which became effective in connection with our IPO in October 2015. A total of 3,500,000 shares of Class A common stock was initially reserved for issuance under the 2015 ESPP. The 2015 ESPP allows eligible employees to purchase shares of our Class A common stock at a discount through payroll deductions (or other payroll contributions) of up to 30% of their eligible compensation, subject to a cap of 3,000 shares on any purchase date or $25,000 in any calendar year (as determined under applicable tax rules). Except for the initial offering period, the 2015 ESPP provides for 24 month offering periods beginning March  and September of each year, and each offering period will consist of four six-month purchase periods. The initial offering period began in October 2015, and will end on September 15, 2017. On each purchase date, eligible employees will purchase our Class A common stock at a price per share equal to 85% of the lesser of the fair market value of our Class A common stock (1) on the first trading day of the applicable offering period or (2) the purchase date. For the first offering period, the fair market value of our Class A common stock on the offering date was $17.00, the price at which our Class A common stock was first sold to the public in our IPO. As of October 31, 2015, 3,500,000 shares were reserved for future issuance under the 2015 ESPP.

Stock Options

A summary of activity under our equity incentive plans and related information is as follows:

 

 

 

Options Outstanding

 

 

 

Number of

Shares

 

 

Weighted-

Average

Exercise Price

 

 

Weighted-

Average

Remaining

Contractual

Life (In Years)

 

 

Aggregate

Intrinsic

Value (In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 31, 2015

 

 

54,284,474

 

 

$

3.02

 

 

 

8.3

 

 

$

523,654

 

Options granted

 

 

18,159,824

 

 

 

15.77

 

 

 

 

 

 

 

 

 

Options exercised

 

 

(1,784,066

)

 

 

2.64

 

 

 

 

 

 

 

 

 

Options cancelled

 

 

(1,730,681

)

 

 

7.09

 

 

 

 

 

 

 

 

 

Balance as of October 31, 2015

 

 

68,929,551

 

 

 

6.29

 

 

 

 

 

 

 

 

 

Vested and exercisable as of October 31, 2015

 

 

21,903,812

 

 

 

1.71

 

 

 

6.8

      

 

$

348,767

 

Vested and expected to vest as of October 31, 2015

 

 

66,851,238

 

 

 

6.22

 

 

 

8.1

 

 

$

763,519

 

 

 

As of October 31, 2015, total unrecognized employee compensation cost, net of estimated forfeitures, was $210.7 million, which is expected to be recognized over a weighted-average period of 3.85 years.

During the three and nine months ended October 31, 2014 and 2015, we granted options to purchase 90,000, 415,000 50,000 and 133,000 shares of common stock that vest upon satisfaction of a performance condition, respectively. For all the options that vest upon satisfaction of a performance condition, management determined it is probable that the performance condition will be satisfied and, accordingly, the related stock-based compensation expense of $407,000, $1.1 million, $797,000 and $1.8 million was recognized during the three and nine months ended October 31, 2014 and 2015, respectively.

2015 ESPP

During the three months ended October 31, 2015, we recognized $907,000 of stock-based compensation expense related to the 2015 ESPP. As of October 31, 2015, there was $25.9 million of unrecognized stock-based compensation expense related to our 2015 ESPP that is expected to be recognized over the remaining term of the initial offering period.

Determination of Fair Value

The fair value of shares to be purchased under ESPP is estimated on the grant date using the Black-Scholes option pricing model. This valuation model for stock-based compensation expense requires us to make assumptions and judgments about the variables used in the calculation including expected term, the expected volatility of the common stock, a risk-free interest rate and expected dividend yield.

We estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions:

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

Expected term (in years)

 

 

 

 

 

0.4 – 1.9

 

 

 

 

 

 

0.4 – 1.9

 

Expected volatility

 

 

 

 

49

%

 

 

 

 

49

%

Risk-free interest rate

 

 

 

 

0.1% - 0.7

%

 

 

 

 

0.1% - 0.7

%

Dividend rate

 

 

 

 

 

 

 

 

 

 

 

 

 

The assumptions used in the Black-Scholes option pricing model were determined as follows.

Expected Term—The expected term represents the period that our stock-based awards are expected to be outstanding. The expected term assumptions were determined based on the contractual lives of the ESPP purchase rights.

Expected Volatility—Since we do not have a substantive trading history of our common stock, the expected volatility was derived from the average historical stock volatilities of several public companies within the same industry that we consider to be comparable to our business over a period equivalent to the expected term of the ESPP purchase rights.

Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the ESPP purchase rights.

Dividend Rate—We have never declared or paid any cash dividends and do not plan to pay cash dividends in the foreseeable future, and, therefore, use an expected dividend yield of zero.

Non-Employee Stock Option Awards

We granted non-employee stock options to purchase 22,500 shares of common stock during the three months ended October 31, 2015, and 7,500 and 22,500 shares of common stock during the nine months ended October 31, 2014 and 2015. No stock options were granted to non-employees during the three months ended October 31, 2014. We recognized stock-based compensation expense related to non-employee stock options of $483,000 and $93,000 for the three months ended October 31, 2014 and 2015 and $1.9 million and $975,000 for the nine months ended October 31, 2014 and 2015.

Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense recognized in the condensed consolidated statements of operations (in thousands):

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

Cost of revenue—product

 

$

35

 

 

$

43

 

 

$

264

 

 

$

139

 

Cost of revenue—support

 

 

159

 

 

 

657

 

 

 

1,057

 

 

 

1,511

 

Research and development

 

 

3,399

 

 

 

8,195

 

 

 

18,546

 

 

 

18,624

 

Sales and marketing

 

 

2,315

 

 

 

4,559

 

 

 

19,676

 

 

 

10,539

 

General and administrative

 

 

823

 

 

 

2,085

 

 

 

5,331

 

 

 

5,385

 

Total stock-based compensation expense

 

$

6,731

 

 

$

15,539

 

 

$

44,874

 

 

$

36,198

 

 

The stock-based compensation expense for the nine months ended October 31, 2014 included $27.6 million related to the repurchase of common stock in excess of fair value in connection with a tender offer.

Net Loss per Share Attributable to Common Stockholders
Net Loss per Share Attributable to Common Stockholders

Note 10. Net Loss per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. We consider all series of our convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of our convertible preferred stock do not have a contractual obligation to share in our losses.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, convertible preferred stock, stock options, restricted stock awards and early exercised stock options are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis. We did not present dilutive net loss per share on an if-converted basis because the impact was not dilutive.

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

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

 

2015

 

Net loss

 

$

(40,397

)

 

$

(56,501

)

 

$

(135,596

)

 

$

(169,458

)

Weighted-average shares used in computing net loss per

   share attributable to common stockholders, basic and

   diluted

 

 

28,280

 

 

 

74,565

 

 

 

26,769

 

 

 

47,109

 

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(1.43

)

 

$

(0.76

)

 

$

(5.07

)

 

$

(3.60

)

 

The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

 

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2014

 

 

2015

 

2014

 

 

2015

Convertible preferred stock (on an if-converted basis)

 

 

122,250

 

 

 

 

116,215

 

 

 

Stock options to purchase common stock

 

 

50,433

 

 

63,738

 

 

49,589

 

 

59,611

Early exercised stock options and restricted stock awards

 

 

7,871

 

 

3,318

 

 

9,086

 

 

3,849

Total

 

 

180,554

 

 

67,056

 

 

174,890

 

 

63,460

 

Income Taxes
Income Taxes

Note 11. Income Taxes

Our provision for income taxes was primarily due to taxes on international operations and state income taxes. The difference between the provision for income taxes that would be derived by applying the statutory rate to our income (loss) before income taxes and the provision for income taxes recorded was primarily attributable to the difference in foreign tax rates and creation of the US tax attributes that were subject to a full valuation allowance.

As of October 31, 2015, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the fiscal year ended January 31, 2015.

Segment Information
Segment Information

Note 12. Segment Information

Our chief operating decision maker is a group which is comprised of our Chief Executive Officer, our Chief Financial Officer, and our President. This group reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. We have one business activity and there are no segment managers who are held accountable for operations or operating results. Accordingly, we have a single reportable segment.

The following table sets forth revenue by geographic area based on the billing address of our customers (in thousands):

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

United States

 

$

39,574

 

 

$

105,615

 

 

$

84,844

 

 

$

229,892

 

Rest of the world

 

 

9,615

 

 

 

25,749

 

 

 

23,757

 

 

 

60,210

 

Total revenue

 

$

49,189

 

 

$

131,364

 

 

$

108,601

 

 

$

290,102

 

 

Long-lived assets by geographic area are summarized as follows (in thousands):

 

 

 

January 31,

 

 

October 31,

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

United States

 

$

39,069

 

 

$

45,756

 

Rest of the world

 

 

790

 

 

 

1,361

 

Total long-lived assets

 

$

39,859

 

 

$

47,117

 

 

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the company and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Unaudited Interim Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our prospectus (the Prospectus) filed pursuant to Rule 424(b) under the Securities Exchange Act of 1933, as amended, with the SEC on October 7, 2015.

The condensed consolidated balance sheet as of January 31, 2015, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP on an annual reporting basis.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year 2016 or any future period.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates. Such estimates include, but are not limited to, the determination of best estimate of selling price included in multiple-deliverable revenue arrangements, sales commissions, useful lives of intangible assets and property and equipment, fair values of stock-based awards, provision for income taxes, including related reserves, among others. Management bases its estimates on historical experience and on various other assumptions which are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Restricted Cash

Restricted cash is comprised of certificates of deposit related to our leases. As of January 31, 2015 and October 31, 2015, we had restricted cash of $4.6 million and $7.1 million, which was included in other long-term assets in the condensed consolidated balance sheets.

Deferred Commissions

Deferred commissions consist of direct and incremental costs paid to our sales force related to customer contracts. The deferred commission amounts are recoverable through the revenue streams that will be recognized under the related customer contracts. Direct sales commissions are deferred when earned and amortized over the same period that revenue is recognized from the related customer contract. Amortization of deferred commissions is included in sales and marketing expense in the condensed consolidated statements of operations.

As of January 31, 2015 and October 31, 2015, we recorded short-term deferred commissions of $9.4 million and $13.6 million, and long-term deferred commissions of $7.5 million and $11.8 million, in other long-term assets in the condensed consolidated balance sheets. During the three and nine months ended October 31, 2014 and October 31, 2015, we recognized sales commission expenses of $11.7 million, $21.8 million, $16.5 million and $38.6 million, respectively.

 

Recent Accounting Pronouncement Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 will supersede nearly all existing revenue recognition guidance under U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, deferring the effective date for ASU 2014-09 by one year, and thus, the new standard will be effective for us beginning on February 1, 2018 with early adoption permitted on or after February 1, 2017. This standard may be adopted using either the full or modified retrospective methods. We are currently evaluating adoption methods and the impact of this standard on our consolidated financial statements.

Fair Value Measurements (Tables)
Fair Value, Assets Measured on Recurring Basis

The following tables set forth the fair value of our financial assets measured at fair value on a recurring basis as of January 31, 2015 and October 31, 2015 using the above input categories (in thousands):

 

 

 

January 31, 2015

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

190,621

 

 

$

 

 

$

 

 

$

190,621

 

Restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

 

 

 

4,648

 

 

 

 

 

 

4,648

 

Total assets measured at fair value

 

$

190,621

 

 

$

4,648

 

 

$

 

 

$

195,269

 

 

 

 

October 31, 2015

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

45,614

 

 

$

 

 

$

 

 

$

45,614

 

Restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

 

 

 

7,132

 

 

 

 

 

 

7,132

 

Total assets measured at fair value

 

$

45,614

 

 

$

7,132

 

 

$

 

 

$

52,746

 

 

Balance Sheet Components (Tables)

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

 

 

 

January 31,

 

 

October 31,

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

Test equipment

 

$

37,059

 

 

$

58,359

 

Computer, equipment and software

 

 

19,022

 

 

 

25,158

 

Furniture and fixtures

 

 

2,460

 

 

 

2,587

 

Leasehold improvements

 

 

3,776

 

 

 

4,579

 

Total property and equipment

 

 

62,317

 

 

 

90,683

 

Less: accumulated depreciation and amortization

 

 

(22,458

)

 

 

(43,566

)

Property and equipment, net

 

$

39,859

 

 

$

47,117

 

 

Intangible assets, net consist of the following (in thousands):

 

 

 

January 31,

2015

 

 

October 31,

2015

 

 

 

 

 

 

 

 

 

Technology patents

 

$

9,125

 

 

$

9,125

 

Accumulated amortization

 

 

(841

)

 

 

(1,819

)

Intangible assets, net

 

$

8,284

 

 

$

7,306

 

 

As of October 31, 2015, expected amortization expense for intangible assets for each of the next five years and thereafter is as follows (in thousands):

 

Year Ending January 31,

 

Estimated Future

Amortization

Expense

 

Remainder of 2016

 

$

326

 

2017

 

 

1,304

 

2018

 

 

1,304

 

2019

 

 

1,304

 

2020

 

 

1,304

 

Thereafter

 

 

1,764

 

Total

 

$

7,306

 

 

Accrued expenses and other liabilities consist of the following (in thousands):

 

 

 

January 31,

 

 

October 31,

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

Sales and use tax payable

 

$

591

 

 

$

583

 

Accrued professional fees

 

 

1,502

 

 

 

2,149

 

Accrued travel and entertainment expenses

 

 

1,138

 

 

 

1,264

 

Income tax payable

 

 

779

 

 

 

941

 

Other accrued liabilities

 

 

2,096

 

 

 

6,786

 

Accrued deferred offering costs

 

 

 

 

 

2,717

 

Total accrued expenses and other liabilities

 

$

6,106

 

 

$

14,440

 

 

Equity Incentive Plans (Tables)

A summary of activity under our equity incentive plans and related information is as follows:

 

 

 

Options Outstanding

 

 

 

Number of

Shares

 

 

Weighted-

Average

Exercise Price

 

 

Weighted-

Average

Remaining

Contractual

Life (In Years)

 

 

Aggregate

Intrinsic

Value (In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 31, 2015

 

 

54,284,474

 

 

$

3.02

 

 

 

8.3

 

 

$

523,654

 

Options granted

 

 

18,159,824

 

 

 

15.77

 

 

 

 

 

 

 

 

 

Options exercised

 

 

(1,784,066

)

 

 

2.64

 

 

 

 

 

 

 

 

 

Options cancelled

 

 

(1,730,681

)

 

 

7.09

 

 

 

 

 

 

 

 

 

Balance as of October 31, 2015

 

 

68,929,551

 

 

 

6.29

 

 

 

 

 

 

 

 

 

Vested and exercisable as of October 31, 2015

 

 

21,903,812

 

 

 

1.71

 

 

 

6.8

      

 

$

348,767

 

Vested and expected to vest as of October 31, 2015

 

 

66,851,238

 

 

 

6.22

 

 

 

8.1

 

 

$

763,519

 

 

We estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions:

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

Expected term (in years)

 

 

 

 

 

0.4 – 1.9

 

 

 

 

 

 

0.4 – 1.9

 

Expected volatility

 

 

 

 

49

%

 

 

 

 

49

%

Risk-free interest rate

 

 

 

 

0.1% - 0.7

%

 

 

 

 

0.1% - 0.7

%

Dividend rate

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes the components of stock-based compensation expense recognized in the condensed consolidated statements of operations (in thousands):

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

Cost of revenue—product

 

$

35

 

 

$

43

 

 

$

264

 

 

$

139

 

Cost of revenue—support

 

 

159

 

 

 

657

 

 

 

1,057

 

 

 

1,511

 

Research and development

 

 

3,399

 

 

 

8,195

 

 

 

18,546

 

 

 

18,624

 

Sales and marketing

 

 

2,315

 

 

 

4,559

 

 

 

19,676

 

 

 

10,539

 

General and administrative

 

 

823

 

 

 

2,085

 

 

 

5,331

 

 

 

5,385

 

Total stock-based compensation expense

 

$

6,731

 

 

$

15,539

 

 

$

44,874

 

 

$

36,198

 

 

Net Loss per Share Attributable to Common Stockholders (Tables)

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

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2014

 

 

2015

 

 

2014

 

 

 

2015

 

Net loss

 

$

(40,397

)

 

$

(56,501

)

 

$

(135,596

)

 

$

(169,458

)

Weighted-average shares used in computing net loss per

   share attributable to common stockholders, basic and

   diluted

 

 

28,280

 

 

 

74,565

 

 

 

26,769

 

 

 

47,109

 

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(1.43

)

 

$

(0.76

)

 

$

(5.07

)

 

$

(3.60

)

 

The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

 

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2014

 

 

2015

 

2014

 

 

2015

Convertible preferred stock (on an if-converted basis)

 

 

122,250

 

 

 

 

116,215

 

 

 

Stock options to purchase common stock

 

 

50,433