Company Quick10K Filing
DocuSign
Price60.64 EPS-1
Shares179 P/E-68
MCap10,870 P/FCF155
Net Debt-198 EBIT-136
TEV10,672 TEV/EBIT-79
TTM 2019-10-31, in MM, except price, ratios
10-Q 2020-04-30 Filed 2020-06-05
10-K 2020-01-31 Filed 2020-03-27
10-Q 2019-10-31 Filed 2019-12-06
10-Q 2019-07-31 Filed 2019-09-06
10-Q 2019-04-30 Filed 2019-06-07
10-K 2019-01-31 Filed 2019-03-26
10-Q 2018-10-31 Filed 2018-12-07
S-1 2018-09-11 Public Filing
10-Q 2018-07-31 Filed 2018-09-06
10-Q 2018-04-30 Filed 2018-06-08
S-1 2018-03-28 Public Filing
8-K 2020-06-04
8-K 2020-05-29
8-K 2020-05-15
8-K 2020-05-01
8-K 2020-03-24
8-K 2020-03-10
8-K 2020-02-26
8-K 2019-12-05
8-K 2019-09-05
8-K 2019-06-17
8-K 2019-06-06
8-K 2019-03-14
8-K 2018-12-19
8-K 2018-12-06
8-K 2018-12-05
8-K 2018-09-13
8-K 2018-09-04
8-K 2018-07-31
8-K 2018-07-06
8-K 2018-06-07
8-K 2018-05-01

DOCU 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Note 2. Revenue and Performance Obligations
Note 3. Fair Value Measurements
Note 4. Property and Equipment, Net
Note 5. Goodwill and Intangible Assets, Net
Note 6. Contract Balances
Note 7. Deferred Contract Acquisition and Fulfillment Costs
Note 8. Senior Notes
Note 9. Leases
Note 10. Commitments and Contingencies
Note 11. Stockholders' Equity
Note 12. Net Loss per Share Attributable To Common Stockholders
Note 13. Income Taxes
Note 14. Geographic Information
Note 15. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Qualitative and Quantitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-10.1 q121exhibit101.htm
EX-31.1 q121exhibit311.htm
EX-31.2 q121exhibit312.htm
EX-32.1 q121exhibit321.htm

DocuSign Earnings 2020-04-30

Balance SheetIncome StatementCash Flow
1.81.40.90.50.0-0.42016201720182020
Assets, Equity
0.30.20.1-0.1-0.2-0.32016201720182020
Rev, G Profit, Net Income
0.60.40.20.0-0.2-0.42016201720182020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________
FORM 10-Q
______________________________________

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to                
Commission File Number: 001-38465
______________________________________
DOCUSIGN, INC.
(Exact name of registrant as specified in its charter)
______________________________________
Delaware91-2183967
(State or Other Jurisdiction of Incorporation)(I.R.S. Employer Identification Number)
221 Main St.Suite 1550San FranciscoCalifornia94105
(Address of Principal Executive Offices)(Zip Code)
(415) 489-4940
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareDOCUThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No 
The registrant has 183,508,855 shares of common stock, par value $0.0001, outstanding at May 29, 2020.



DOCUSIGN, INC.
TABLE OF CONTENTS


2


NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations, and the impact of the ongoing coronavirus pandemic (the “COVID-19 pandemic”) on our financial conditions and results of operations are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our ability to effectively sustain and manage our growth and future expenses, and our ability to achieve and maintain future profitability;
our expectations regarding the impact of the COVID-19 pandemic on our business;
our ability to attract new customers and to maintain and expand our existing customer base;
our ability to scale and update our software suite to respond to customers’ needs and rapid technological change;
the effects of increased competition on our market and our ability to compete effectively;
our ability to expand use cases within existing customers and vertical solutions;
our ability to expand our operations and increase adoption of our software suite internationally;
our ability to strengthen and foster our relationship with developers;
our ability to expand our direct sales force, customer success team and strategic partnerships around the world;
our ability to identify targets for and execute potential acquisitions;
our ability to successfully integrate the operations of businesses we may acquire, or to realize the anticipated benefits of such acquisitions;
our ability to maintain, protect and enhance our brand;
the sufficiency of our cash and cash equivalents to satisfy our liquidity needs;
our failure or the failure of our software suite of services to comply with applicable industry standards, laws and regulations;
our ability to maintain, protect and enhance our intellectual property;
our ability to successfully defend litigation against us;
our ability to attract large organizations as users;
our ability to maintain our corporate culture;
our ability to offer high-quality customer support;
our ability to hire, retain and motivate qualified personnel;
our ability to estimate the size and potential growth of our target market; and
our ability to maintain proper and effective internal controls.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, such as the COVID-19 pandemic. Many of the risks and uncertainties are currently elevated by, and may or will continue to be elevated by, the current COVID-19 pandemic. It is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

3


The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law.
4


PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DOCUSIGN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)April 30, 2020January 31, 2020
Assets
Current assets
Cash and cash equivalents$442,237  $241,203  
Investments—current315,712  414,939  
Restricted cash280  280  
Accounts receivable220,602  237,841  
Contract assets—current13,236  12,502  
Prepaid expenses and other current assets51,176  37,125  
Total current assets1,043,243  943,890  
Investments—noncurrent140,117  239,729  
Property and equipment, net134,811  128,293  
Operating lease right-of-use assets161,484  149,833  
Goodwill193,594  194,882  
Intangible assets, net52,241  56,500  
Deferred contract acquisition costs—noncurrent169,686  153,333  
Other assets—noncurrent26,312  24,678  
Total assets$1,921,488  $1,891,138  
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$21,504  $28,144  
Accrued expenses and other current liabilities46,475  54,344  
Accrued compensation81,653  83,189  
Contract liabilities—current552,345  507,560  
Operating lease liabilities—current27,613  20,728  
Total current liabilities729,590  693,965  
Convertible senior notes, net472,162  465,321  
Contract liabilities—noncurrent11,287  11,478  
Operating lease liabilities—noncurrent173,750  162,432  
Deferred tax liability—noncurrent4,814  4,920  
Other liabilities—noncurrent7,097  6,695  
Total liabilities1,398,700  1,344,811  
Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding as of April 30, 2020 and January 31, 2020
    
Common stock, $0.0001 par value; 500,000 shares authorized, 183,428 shares outstanding as of April 30, 2020; 500,000 shares authorized, 181,254 shares outstanding as of January 31, 2020
18  18  
Additional paid-in capital1,714,462  1,685,167  
Accumulated other comprehensive loss(6,703) (1,673) 
Accumulated deficit(1,184,989) (1,137,185) 
Total stockholders’ equity
522,788  546,327  
Total liabilities and stockholders’ equity
$1,921,488  $1,891,138  
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5


DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
Three Months Ended April 30,
(in thousands, except per share data)20202019
Revenue:
Subscription$280,922  $201,458  
Professional services and other16,095  12,504  
Total revenue297,017  213,962  
Cost of revenue:
Subscription52,010  33,119  
Professional services and other22,022  18,900  
Total cost of revenue74,032  52,019  
Gross profit222,985  161,943  
Operating expenses:
Sales and marketing171,793  129,936  
Research and development54,234  37,183  
General and administrative38,811  37,261  
Total operating expenses264,838  204,380  
Loss from operations(41,853) (42,437) 
Interest expense(7,560) (7,156) 
Interest income and other income, net3,742  5,217  
Loss before provision for income taxes(45,671) (44,376) 
Provision for income taxes2,133  1,346  
Net loss$(47,804) $(45,722) 
Net loss per share attributable to common stockholders, basic and diluted$(0.26) $(0.27) 
Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted182,978  172,101  
Other comprehensive loss:
Foreign currency translation loss, net of tax$(5,189) $(1,631) 
Unrealized gains on investments, net of tax159  338  
Other comprehensive loss(5,030) (1,293) 
Comprehensive loss$(52,834) $(47,015) 
Stock-based compensation expense included in costs and expenses:
Cost of revenue—subscription$3,864  $2,282  
Cost of revenue—professional services and other4,125  3,440  
Sales and marketing24,665  18,102  
Research and development11,885  7,317  
General and administrative9,012  11,130  
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6


DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
(in thousands)SharesAmount
Balances at January 31, 2020181,254  $18  $1,685,167  $(1,673) $(1,137,185) $546,327  
Exercise of stock options840  —  7,635  —  —  7,635  
Settlement of RSUs1,078  —  —  —  —    
Tax withholding on RSU settlement—  —  (46,723) —  —  (46,723) 
Employee stock purchase plan256  —  13,590  —  —  13,590  
Employee stock-based compensation expense—  —  54,793  —  —  54,793  
Net loss—  —  —  —  (47,804) (47,804) 
Other comprehensive loss, net—  —  —  (5,030) —  (5,030) 
Balances at April 30, 2020183,428  $18  $1,714,462  $(6,703) $(1,184,989) $522,788  

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
(in thousands)SharesAmount
Balances at January 31, 2019169,303  $17  $1,545,088  $(1,965) $(928,778) $614,362  
Exercise of stock options2,634  —  32,254  —  —  32,254  
Settlement of RSUs1,460  —  —  —  —    
Tax withholding on RSU settlement—  —  (56,137) —  —  (56,137) 
Employee stock purchase plans231  —  10,563  —  —  10,563  
Employee stock-based compensation expense—  —  43,703  —  —  43,703  
Net loss—  —  —  —  (45,722) (45,722) 
Cumulative impact of Topic 842 adoption—  —  —  —  (48) (48) 
Other comprehensive loss, net—  —  —  (1,293) —  (1,293) 
Balances at April 30, 2019173,628  $17  $1,575,471  $(3,258) $(974,548) $597,682  
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended April 30,
(in thousands)20202019
Cash flows from operating activities:
Net loss$(47,804) $(45,722) 
Adjustments to reconcile net to net cash used in operating activities
Depreciation and amortization14,039  11,971  
Amortization of deferred contract acquisition and fulfillment costs21,360  14,260  
Amortization of debt discount and transaction costs6,842  6,454  
Non-cash operating lease costs6,324  4,128  
Stock-based compensation expense53,551  42,271  
Deferred income taxes(104) 52  
Other504  (1,111) 
Changes in operating assets and liabilities
Accounts receivable17,239  57,414  
Contract assets(740) (2,701) 
Prepaid expenses and other current assets(9,660) (7,107) 
Deferred contract acquisition and fulfillment costs(41,037) (20,487) 
Other assets(1,364) 541  
Accounts payable(2,554) 282  
Accrued expenses and other liabilities(916) 4,710  
Accrued compensation(1,536) (19,869) 
Contract liabilities44,594  4,274  
Operating lease liabilities406  (3,705) 
Net cash provided by operating activities59,144  45,655  
Cash flows from investing activities:
Purchases of marketable securities  (375,211) 
Sales of marketable securities28,986    
Maturities of marketable securities170,071  92,457  
Purchases of strategic investments  (15,500) 
Purchases of other investments
(3,000)   
Purchases of property and equipment(26,389) (15,237) 
Net cash provided by (used in) investing activities169,668  (313,491) 
Cash flows from financing activities:
Payment of tax withholding obligation on RSU settlement(46,723) (56,137) 
Proceeds from exercise of stock options7,635  32,254  
Proceeds from employee stock purchase plan13,590  10,563  
Net cash used in financing activities(25,498) (13,320) 
Effect of foreign exchange on cash, cash equivalents and restricted cash(2,280) (379) 
Net increase (decrease) in cash, cash equivalents and restricted cash201,034  (281,535) 
Cash, cash equivalents and restricted cash at beginning of period241,483  518,178  
Cash, cash equivalents and restricted cash at end of period$442,517  $236,643  
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8


DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited)
Three Months Ended April 30,
(in thousands)20202019
Supplemental disclosure:
Cash paid for interest$1,438  $1,414  
Cash paid for operating lease liabilities6,389  4,729  
Cash paid for income taxes416  131  
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities$3,445  $3,791  
Operating lease right-of-use assets exchanged for lease obligations18,745  53,653  
Derecognition of build-to-suit lease  2,479  
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9


DOCUSIGN, INC.
Index for Notes to the Condensed Consolidated Financial Statements


10


DOCUSIGN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Summary of Significant Accounting Policies

Organization and Description of Business

DocuSign, Inc. (“we,” “our” or “us”) was incorporated in the State of Washington in April 2003. We merged with and into DocuSign, Inc., a Delaware corporation, in March 2015.

We provide a platform that enables businesses of all sizes to digitally prepare, execute and act on agreements, thereby simplifying and accelerating the process of doing business.

Basis of Presentation and Principles of Consolidation

Our condensed consolidated financial statements include those of DocuSign, Inc. and our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2020 Annual Report on Form 10-K.

Our condensed consolidated financial statements are unaudited and have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and, in our opinion, include all adjustments of a normal recurring nature necessary for the fair statement of our financial position, results of operations and cash flows. Our condensed consolidated balance sheet as of January 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the three months ended April 30, 2020 are not necessarily indicative of the results to be expected for the year ending January 31, 2021.

Our fiscal year ends on January 31. References to fiscal 2021, for example, are to the fiscal year ending January 31, 2021. Certain prior year amounts have been reclassified to conform to current year presentation. These amounts were not material to any of the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in the condensed consolidated financial statements and notes thereto.

Significant items subject to such estimates and assumptions made by management include, but are not limited to, the determination of:
the fair value of assets acquired and liabilities assumed in business combinations;
the average period of benefit associated with deferred contract acquisition costs and fulfillment costs;
the valuation of strategic investments;
the fair value of certain stock awards issued;
the fair value of the liability and equity components of convertible notes;
the useful life and recoverability of long-lived assets;
the discount rate used for operating leases; and
the recognition, measurement and valuation of deferred income taxes.

The World Health Organization declared in March 2020 that the outbreak of the coronavirus disease named COVID-19 constitutes a pandemic. We have undertaken measures to protect our employees, partners and customers. There can be no assurance that these measures will be effective, however, or that we can adopt them without adversely affecting our business operations. In addition, the COVID-19 pandemic has created and may continue to create significant uncertainty in global financial markets, which may decrease technology spending, depress demand for our solutions and harm our business and results of operations. As of the date of issuance of the financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities.
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These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.

Significant Accounting Policies

There have been no changes to our significant accounting policies described in our 2020 Annual Report on Form 10-K that have had a material impact on our consolidated financial statements and related notes.

Concentration of Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. Although we deposit our cash with multiple financial institutions, the deposits, at times, may exceed federally insured limits. We have not experienced any losses on our deposits of cash and cash equivalents. Cash equivalents consist of money market funds which are invested through financial institutions in the U.S. Management believes that the institutions are financially stable and, accordingly, minimal credit risk exists.

We perform ongoing credit evaluations of our customers, do not require collateral and maintain allowances for potential credit losses on customers’ accounts using the expected loss model.

Investments

Investments in marketable securities consist of commercial paper, corporate notes and bonds, as well as U.S. Treasury and government agency securities. Management determines the appropriate classification of investments at the time of purchase and reevaluates such determination at each balance sheet date. Marketable securities are classified as available-for-sale and are carried at fair value in the consolidated balance sheet and are classified as short-term or long-term based on their remaining contractual maturities.

We evaluate our investments with unrealized loss positions at the individual security level to determine whether the unrealized loss was related to credit or noncredit factors. We consider whether a credit loss exists based on the extent of the unrealized loss position, any adverse conditions specifically related to the security or the issuer's operating environment, pay structure of the security, the issuer's payment history and any changes in the issuer's credit rating. Estimated credit losses are determined using a discounted cash flow model and recorded as an allowance, with changes in expected credit losses on our investments recorded in “Interest income and other income, net” in the consolidated statements of operations and comprehensive loss. Unrealized gains and losses related to noncredit factors are reflected in “Other comprehensive income (loss)” on the consolidated balance sheets.

Recently Adopted Accounting Pronouncements

On February 1, 2020, we adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial InstrumentsCredit Losses (Topic 326). The FASB subsequently issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. These updates change the impairment model for most financial assets and will require the use of an expected loss model in place of the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The effect of adopting ASU 2016-13 and ASU 2019-04 on our consolidated financial statements and related disclosures was not material for the three months ended April 30, 2020.

On February 1, 2020, we adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The impact of prospectively adopting ASU 2018-15 on our consolidated financial statements was not material for the three months ended April 30, 2020.
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Other Recent Accounting Pronouncements

Other recently issued accounting pronouncements are not expected to have a material impact on our consolidated financial statements.

Note 2. Revenue and Performance Obligations

Subscription revenue is recognized over time and accounted for approximately 95% and 94% of our revenue for the three months ended April 30, 2020 and 2019.
        
As of April 30, 2020, the amount of the transaction price allocated to remaining performance obligations for contracts greater than one year was $784.9 million. We expect to recognize 54% of the transaction price allocated to remaining performance obligations within the 12 months following April 30, 2020, in our consolidated statement of operations and comprehensive loss.

Note 3. Fair Value Measurements
The following table summarizes our financial assets that are measured at fair value on a recurring basis:
April 30, 2020
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds$169,397  $  $  $169,397  
Level 2:
Available-for-sale securities
Commercial paper9,472  20    9,492  
Corporate notes and bonds283,699  1,204  (523) 284,380  
U.S. Treasury securities53,062  310    53,372  
U.S. government agency securities108,313  320  (48) 108,585  
Level 2 total454,546  1,854  (571) 455,829  
Total$623,943  $1,854  $(571) $625,226  
January 31, 2020
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds$165,424  $  $  $165,424  
Level 2:
Available-for-sale securities
Commercial paper14,919  7  (1) 14,925  
Corporate notes and bonds372,844  891  (31) 373,704  
U.S. Treasury securities90,697  153  (1) 90,849  
U.S. government agency securities175,086  153  (49) 175,190  
Level 2 total653,546  1,204  (82) 654,668  
Total$818,970  $1,204  $(82) $820,092  

(1) Included in “cash and cash equivalents” in our consolidated balance sheets as of April 30, 2020 and January 31, 2020, in addition to cash of $272.8 million and $75.8 million.
13



We use quoted prices in active markets for identical assets to determine the fair value of our Level 1 investments. The fair value of our Level 2 investments is determined using pricing based on quoted market prices or alternative market observable inputs.

The fair value of our available-for-sale securities as of April 30, 2020, by remaining contractual maturities, were as follows (in thousands):
Due in one year or less$315,712  
Due in one to two years140,117  
$455,829  

As of April 30, 2020, we had a total of 133 available-for-sale securities, with 43 securities in an unrealized loss position. An allowance for credit losses was deemed unnecessary for these securities, given the extent of the unrealized loss positions as well the issuers' high credit ratings and consistent payment history. As of January 31, 2020, we had 178 available-for-sale securities, none of which were considered to be other-than-temporarily impaired.

We had no liabilities measured at fair value on a recurring basis as of April 30, 2020 and January 31, 2020.

Convertible Senior Notes

As of April 30, 2020 and January 31, 2020, the estimated fair value of our 0.5% Convertible Senior Notes (the “Notes”) with aggregate principal amount of $575.0 million was $903.0 million and $743.5 million. We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). The Notes are recorded at face value less unamortized debt discount and transaction costs as “Convertible senior notes, net” on our consolidated balance sheets. Refer to Note 8 for further information.

Note 4. Property and Equipment, Net

Property and equipment consisted of the following:
(in thousands)April 30, 2020January 31, 2020
Computer and network equipment$74,146  $66,937  
Software, including capitalized software development costs38,595  33,373  
Furniture and office equipment17,529  16,752  
Leasehold improvements69,327  59,564  
199,597  176,626  
Less: Accumulated depreciation(89,286) (81,228) 
110,311  95,398  
Work in progress24,500  32,895  
$134,811  $128,293  

As of April 30, 2020 and January 31, 2020, work in progress consisted primarily of capitalized costs of internally-developed software projects under development and leasehold improvements related to office build-out projects.

We capitalized $5.1 million and $5.9 million of internally developed software and implementation costs incurred in hosting arrangements for the three months ended April 30, 2020 and 2019. Such amounts included capitalized stock-based compensation of $1.2 million and $1.4 million in the three months ended April 30, 2020 and 2019.

Depreciation expense associated with property and equipment $9.8 million and $7.2 million for the three months ended April 30, 2020 and 2019.

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Note 5. Goodwill and Intangible Assets, Net

The changes in the carrying amount of goodwill were as follows (in thousands):
Balance at January 31, 2020$194,882  
Cumulative translation adjustment(1,288) 
Balance at April 30, 2020$193,594  

Intangible assets consisted of the following:
As of April 30, 2020As of January 31, 2020
(in thousands, except years)Weighted-average Remaining Useful Life (Years)Estimated Fair ValueAccumulated AmortizationAcquisition-related Intangibles, NetEstimated Fair ValueAccumulated AmortizationAcquisition-related Intangibles, Net
Existing technology1.4$31,594  $(26,191) $5,403  $31,594  $(25,164) $6,430  
Tradenames / trademarks0.02,419  (2,419)   2,419  (2,369) 50  
Customer contracts & related relationships7.365,782  (21,032) 44,750  65,782  (19,071) 46,711  
Certifications0.56,917  (6,575) 342  6,917  (6,229) 688  
Maintenance contracts & related relationships0.51,498  (1,478) 20  1,498  (1,403) 95  
Backlog—Subscription0.46,400  (5,308) 1,092  6,400  (4,508) 1,892  
6.5$114,610  $(63,003) 51,607  $114,610  $(58,744) 55,866  
Cumulative translation adjustment634  634  
Total$52,241  $