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Operating Leases
9 Months Ended
Oct. 31, 2019
Leases [Abstract]  
Operating Leases

 


Note 6:  Operating Leases

The Company leases its headquarters located in Sunnyvale, California, as well as office and data center space in various locations under non-cancelable operating lease agreements, with expiration dates between fiscal years 2020 and 2024. The lease agreements often include escalating rent payments, renewal provisions and other provisions which require the Company to pay maintenance costs, property taxes and insurance. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.  

Supplemental balance sheet information related to leases was as follows (in thousands):

 

 

 

 

 

As of

 

 

 

 

 

October 31, 2019

 

Assets

 

 

 

 

 

 

Operating lease ROU assets

 

 

 

$

4,341

 

   Total leased assets

 

 

 

$

4,341

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Short-term operating lease liabilities

 

 

 

$

1,629

 

Long-term operating lease liabilities

 

 

 

 

2,892

 

   Total lease liabilities

 

 

 

$

4,521

 

 

 

 

 

 

 

 

Weighted-average remaining lease term

 

 

 

3.2 years

 

Weighted-average discount rate

 

 

 

 

5.75

%

 

Operating lease ROU assets and long-term operating lease liabilities are included on the face of the condensed consolidated balance sheet. Short-term operating lease liabilities are presented within accrued expenses and other current liabilities.

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31, 2019

 

 

October 31, 2019

 

Operating lease costs (1)

 

$

684

 

 

$

1,898

 

Variable lease costs (2)

 

 

306

 

 

 

784

 

   Total lease cost

 

$

990

 

 

$

2,682

 

 

(1) Operating lease costs are recognized on a straight-line basis over the lease term. Includes costs for short-term leases with an initial term of twelve months or less, which were not material.

(2) Variable lease costs primarily included common area maintenance, utilities and property taxes and insurance, which were expensed as incurred.

In October 2017, the Company entered into an office sublease agreement with Fiserv Solutions, LLC (“Fiserv”) to lease approximately 33,400 rentable square feet of an office building located in Sunnyvale, California, the Company’s current corporate headquarters. One of the members of the Company’s board of directors is also a current member of Fiserv’s board of directors. Therefore, Fiserv is a related party of the Company. During the three months ended October 31, 2019 and 2018, the Company incurred total lease costs of approximately $0.3 million under this sublease agreement. During the nine months ended October 31, 2019 and 2018, the Company incurred total lease costs of approximately $0.9 million under this sublease agreement. Lease costs for the three and nine months ended October 31, 2019 are included in the table above. This sublease expired at the end of November 2019.

During the third quarter of fiscal 2020, the Company entered into a new sublease agreement with an unrelated third party to lease its current corporate headquarters in Sunnyvale, California through January 2022. The lease commenced on December 1, 2019, and as such, was not recognized on the consolidated balance sheet as of October 31, 2019. The total rental payments associated with this office lease are approximately $3.9 million over the 26 month contractual term.

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31, 2019

 

 

October 31, 2019

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

    Operating cash flows from operating leases

 

$

534

 

 

$

1,587

 

ROU assets recognized in exchange for new operating lease obligations

 

 

1,492

 

 

 

1,612

 

 

As of October 31, 2019, maturities of lease liabilities under non-cancelable operating leases were as follows (in thousands):

 

Fiscal Years Ending January 31,

 

 

 

October 31, 2019

 

2020 - remainder of fiscal year

 

 

 

$

422

 

2021

 

 

 

 

1,616

 

2022

 

 

 

 

1,546

 

2023

 

 

 

 

915

 

2024

 

 

 

 

461

 

Total lease payments

 

 

 

 

4,960

 

Less: imputed interest

 

 

 

 

(439

)

      Present value of lease liabilities

 

 

 

$

4,521

 

As of January 31, 2019, future minimum rental payments under non-cancelable operating leases were as follows (in thousands):

Fiscal Years Ending January 31,

 

 

 

January 31, 2019

 

2020

 

 

 

$

1,983

 

2021

 

 

 

 

1,408

 

2022

 

 

 

 

917

 

2023

 

 

 

 

266

 

2024

 

 

 

 

49

 

Total (1)

 

 

 

$

4,623

 

(1) Amounts are based on Topic 840, Leases that was superseded upon the Company’s adoption of Topic 842 on February 1, 2019.