BALANCE SHEET COMPONENTS

6 Months Ended

Jan. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Short-Term Investments

The amortized cost of our short-term investments approximates their fair value. As of July 31, 2019 and January 31, 2020, unrealized gains and losses from our short-term investments were not material. As of July 31, 2019 and January 31, 2020, unrealized losses from securities that were in an unrealized loss position for more than 12 months were not material. Unrealized losses related to our short-term investments are due to interest rate fluctuations, as opposed to credit quality. As a result, at July 31, 2019 and January 31, 2020, there were no other-than-temporary impairments for these investments.

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



	As of January 31, 2020
	(in thousands)
Due within one year	$	441,622
Due in one to two years	165,685
Total	$	607,307

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following:



	As of
	July 31, 2019		January 31, 2020

	(in thousands)
Prepaid operating expenses	$	37,864	$	37,541
Tenant improvement allowances	—		7,930
VAT receivables	5,068		6,516
Prepaid income taxes	19,690		1,548
Other current assets	12,043		12,173
Total prepaid expenses and other current assets	$	74,665	$	65,708

The decrease in prepaid expenses and other current assets from July 31, 2019 to January 31, 2020 was due primarily to the receipt of an $18.0 million corporate income tax refund in the first quarter of fiscal 2020, partially offset by the addition of $7.9 million of tenant improvement allowances, which are recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet as of January 31, 2020 as a result of our adoption of ASC 842 during the first quarter of fiscal 2020.

Property and Equipment, Net

Property and equipment, net consists of the following:



	Estimated Useful Life	As of
	Estimated Useful Life	July 31, 2019			January 31, 2020

	(in months)	(in thousands)
Computer, production, engineering and other equipment	36	$	200,762		$	226,897
Demonstration units	12	59,981			64,190
Leasehold improvements	⁽¹⁾	46,520			54,570
Furniture and fixtures	60	12,868			14,147
Total property and equipment, gross		320,131			359,804
Less: accumulated depreciation ⁽²⁾		(183,169		)	(216,374		)
Total property and equipment, net		$	136,962		$	143,430


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


(2)	Includes a $1.2 million write-off related to the impairment of certain leasehold improvements for the fiscal quarter ended January 31, 2020. For additional information on this lease-related impairment, refer to Note 6.

Depreciation expense related to our property and equipment was $14.5 million and $26.9 million for the three and six months ended January 31, 2019 and $18.7 million and $36.9 million for the three and six months ended January 31, 2020, respectively.

Goodwill and Intangible Assets, Net

The change in the carrying value of goodwill during the six months ended January 31, 2020 was not material.

Intangible assets, net consists of the following:



	As of
	July 31, 2019			January 31, 2020

	(in thousands)
Developed technology	$	79,300		$	79,300
Customer relationships	8,860			8,860
Trade name	4,170			4,170
Total intangible assets, gross	92,330			92,330
Less:
Accumulated amortization of developed technology	(21,210		)	(28,598		)
Accumulated amortization of customer relationships	(3,392		)	(4,172		)
Accumulated amortization of trade name	(955		)	(1,477		)
Total accumulated amortization	(25,557		)	(34,247		)
Total intangible assets, net	$	66,773		$	58,083

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

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



Fiscal Year Ending July 31:	Amount
	(in thousands)
2020 (remaining six months)	$	8,690
2021	17,380
2022	16,183
2023	10,856
2024	3,210
Thereafter	1,764
Total	$	58,083

Accrued Compensation and Benefits

Accrued compensation and benefits consists of the following:



	As of
	July 31, 2019		January 31, 2020

	(in thousands)
Accrued commissions	$	31,703	$	32,841
Contributions to ESPP withheld	20,778		29,643
Accrued vacation	15,475		19,036
Payroll taxes payable	8,504		11,660
Accrued bonus	11,413		10,612
Other	11,931		16,097
Total accrued compensation and benefits	$	99,804	$	119,889