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Convertible Senior Notes
 3 Months Ended
Oct. 31, 2022
Debt Disclosure [Abstract]  
Convertible Senior Notes Convertible Senior Notes
In March 2018, the Company offered and sold $400.0 million aggregate principal amount of its 1.25% Convertible Senior Notes due 2025. The Convertible Senior Notes were issued in accordance with the Indenture, dated as of March 13, 2018, between the Company and U.S. Bank National Association, as trustee (the “Trustee”) (the “Base Indenture”), as amended and supplemented by the First Supplemental Indenture, dated as of March 13, 2018, between the Company and the Trustee (together with the Base Indenture, the “Indenture”). The net proceeds from the issuance of the Convertible Senior Notes were $387.2 million, after deducting issuance costs.
The net carrying value of the liability component, unamortized debt discount and unamortized debt issuance costs of the Convertible Senior Notes was as follows (in thousands):
October 31, 2022July 31, 2022
Principal$400,000 $400,000 
Less unamortized:
Debt discount(1)
— 37,253 
Debt issuance costs4,109 4,531 
Net carrying amount$395,891 $358,216 
(1) Effective August 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method which resulted in the accounting for the Convertible Senior Notes as a single liability and no longer required the liability and equity components to be accounted for separately. The prior period has not been retrospectively adjusted and continues to be reported under the accounting standards in effect for that period.

The effective interest rate of the Convertible Senior Notes after the adoption of ASU 2020-06 on August 1, 2022 is 1.69%. Prior to the adoption of ASU 2020-06, the effective interest rate of the Convertible Senior Notes was 5.53%.
The following table sets forth the interest expense recognized related to the Convertible Senior Notes (in thousands):
Three Months Ended October 31,
20222021
Contractual interest expense$1,250 $1,250 
Amortization of debt discount(1)
— 3,176 
Amortization of debt issuance costs423 348 
Total$1,673 $4,774 
(1) Effective August 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method which resulted in the accounting for the Convertible Senior Notes as a single liability and no longer required the amortization of debt discount. The prior period has not been retrospectively adjusted and continues to be reported under the accounting standards in effect for that period.
As of October 31, 2022, the if-converted value did not exceed the outstanding principal of the Convertible Senior Notes.