falsedesktopWDAY2020-10-31000132781120000167{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage No.\nPART I. FINANCIAL INFORMATION\t\t\nItem 1.\tFinancial Statements (unaudited):\t\n\tCondensed Consolidated Balance Sheets as of October 31 2020 and January 31 2020\t3\n\tCondensed Consolidated Statements of Operations for the Three and Nine Months ended October 31 2020 and 2019\t4\n\tCondensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months ended October 31 2020 and 2019\t5\n\tCondensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months ended October 31 2020 and 2019\t6\n\tCondensed Consolidated Statements of Cash Flows for the Three and Nine Months ended October 31 2020 and 2019\t7\n\tNotes to Condensed Consolidated Financial Statements\t9\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t28\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t41\nItem 4.\tControls and Procedures\t42\nPART II. OTHER INFORMATION\t\t\nItem 1.\tLegal Proceedings\t43\nItem 1A.\tRisk Factors\t44\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t67\nItem 6.\tExhibits\t68\n\tSignatures\t69\n", "q10k_tbl_2": "\tOctober 31 2020\tJanuary 31 2020\nAssets\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t1067038\t731141\nMarketable securities\t1880772\t1213432\nTrade and other receivables net\t742744\t877578\nDeferred costs\t110024\t100459\nPrepaid expenses and other current assets\t157664\t172012\nTotal current assets\t3958242\t3094622\nProperty and equipment net\t976610\t936179\nOperating lease right-of-use assets\t415547\t290902\nDeferred costs noncurrent\t232413\t222395\nAcquisition-related intangible assets net\t262603\t308401\nGoodwill\t1819625\t1819261\nOther assets\t179987\t144605\nTotal assets\t7845027\t6816365\nLiabilities and stockholders' equity\t\t\nCurrent liabilities:\t\t\nAccounts payable\t54949\t57556\nAccrued expenses and other current liabilities\t129794\t130050\nAccrued compensation\t264443\t248154\nUnearned revenue\t2000417\t2223178\nOperating lease liabilities\t84552\t66147\nDebt current\t1091050\t244319\nTotal current liabilities\t3625205\t2969404\nDebt noncurrent\t701178\t1017967\nUnearned revenue noncurrent\t68874\t86025\nOperating lease liabilities noncurrent\t352900\t241425\nOther liabilities\t18816\t14993\nTotal liabilities\t4766973\t4329814\nStockholders' equity:\t\t\nCommon stock\t240\t231\nAdditional paid-in capital\t6184070\t5090187\nTreasury stock\t(269083)\t0\nAccumulated other comprehensive income (loss)\t1110\t23492\nAccumulated deficit\t(2838283)\t(2627359)\nTotal stockholders' equity\t3078054\t2486551\nTotal liabilities and stockholders' equity\t7845027\t6816365\n", "q10k_tbl_3": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nRevenues:\t\t\t\t\nSubscription services\t968547\t798516\t2782201\t2256695\nProfessional services\t137413\t139584\t404111\t394212\nTotal revenues\t1105960\t938100\t3186312\t2650907\nCosts and expenses (1):\t\t\t\t\nCosts of subscription services\t152396\t122305\t442666\t355935\nCosts of professional services\t142785\t148625\t442422\t424548\nProduct development\t419962\t401742\t1282127\t1127695\nSales and marketing\t302870\t286794\t897924\t839930\nGeneral and administrative\t102024\t88884\t296461\t258932\nTotal costs and expenses\t1120037\t1048350\t3361600\t3007040\nOperating income (loss)\t(14077)\t(110250)\t(175288)\t(356133)\nOther income (expense) net\t(8846)\t(4136)\t(31272)\t2899\nLoss before provision for (benefit from) income taxes\t(22923)\t(114386)\t(206560)\t(353234)\nProvision for (benefit from) income taxes\t1417\t1343\t4164\t(518)\nNet loss\t(24340)\t(115729)\t(210724)\t(352716)\nNet loss per share basic and diluted\t(0.10)\t(0.51)\t(0.89)\t(1.56)\nWeighted-average shares used to compute net loss per share basic and diluted\t238059\t228461\t235685\t226071\n", "q10k_tbl_4": "(1) Costs and expenses include share-based compensation expenses as follows:\t\t\t\t\nCosts of subscription services\t16767\t13634\t45484\t36050\nCosts of professional services\t27349\t22249\t74467\t57390\nProduct development\t128423\t118215\t378950\t315210\nSales and marketing\t54077\t47142\t150881\t128686\nGeneral and administrative\t33216\t29762\t97958\t88122\n", "q10k_tbl_5": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nNet loss\t(24340)\t(115729)\t(210724)\t(352716)\nOther comprehensive (loss) income net of tax:\t\t\t\t\nNet change in foreign currency translation adjustment\t(2)\t173\t435\t(420)\nNet change in unrealized gains (losses) on available-for-sale debt securities net of tax provision of $0 $444 $0 and $875 respectively\t(2578)\t1194\t(332)\t2786\nNet change in market value of effective foreign currency forward exchange contracts net of tax provision of $0 $(1315) $0 and $3295 respectively\t3044\t(9206)\t(22485)\t23062\nOther comprehensive (loss) income net of tax\t464\t(7839)\t(22382)\t25428\nComprehensive loss\t(23876)\t(123568)\t(233106)\t(327288)\n", "q10k_tbl_6": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCommon stock:\t\t\t\t\nBalance beginning of period\t238\t227\t231\t221\nIssuance of common stock under employee equity plans\t2\t2\t7\t8\nSettlement of convertible senior notes\t0\t0\t2\t0\nBalance end of period\t240\t229\t240\t229\nAdditional paid-in capital:\t\t\t\t\nBalance beginning of period\t5954738\t4561272\t5090187\t4105334\nIssuance of common stock under employee equity plans\t3648\t1778\t78160\t63312\nShare-based compensation\t259802\t230682\t746643\t624705\nSettlement of warrants\t(34118)\t0\t(34118)\t0\nExercise of convertible senior notes hedges\t0\t0\t303202\t0\nSettlement of convertible senior notes\t0\t0\t(4)\t0\nCumulative-effect of accounting changes\t0\t0\t0\t381\nBalance end of period\t6184070\t4793732\t6184070\t4793732\nTreasury stock:\t\t\t\t\nBalance beginning of period\t(303201)\t0\t0\t0\nExercise of convertible senior notes hedges\t0\t0\t(303201)\t0\nSettlement of warrants\t34118\t0\t34118\t0\nBalance end of period\t(269083)\t0\t(269083)\t0\nAccumulated other comprehensive income (loss):\t\t\t\t\nBalance beginning of period\t646\t32458\t23492\t(809)\nOther comprehensive (loss) income\t464\t(7839)\t(22382)\t25428\nBalance end of period\t1110\t24619\t1110\t24619\nAccumulated deficit:\t\t\t\t\nBalance beginning of period\t(2813943)\t(2383672)\t(2627359)\t(2146304)\nNet loss\t(24340)\t(115729)\t(210724)\t(352716)\nCumulative-effect of accounting changes\t0\t0\t(200)\t(381)\nBalance end of period\t(2838283)\t(2499401)\t(2838283)\t(2499401)\nTotal stockholders' equity\t3078054\t2319179\t3078054\t2319179\n", "q10k_tbl_7": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCommon stock (in shares):\t\t\t\t\nBalance beginning of period\t237160715\t227607594\t231708391\t222052063\nIssuance of common stock under employee equity plans\t1935725\t1931916\t7388498\t7487250\nSettlement of warrants\t(186202)\t0\t(186202)\t0\nSettlement of convertible senior notes\t0\t20\t1654308\t217\nPurchase of treasury stock from the exercise of convertible senior notes hedges\t0\t0\t(1654757)\t0\nBalance end of period\t238910238\t229539530\t238910238\t229539530\n", "q10k_tbl_8": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCash flows from operating activities:\t\t\t\t\nNet loss\t(24340)\t(115729)\t(210724)\t(352716)\nAdjustments to reconcile net loss to net cash provided by (used in) operating activities:\t\t\t\t\nDepreciation and amortization\t73864\t72233\t218556\t201152\nShare-based compensation expenses\t259832\t231002\t747740\t625149\nAmortization of deferred costs\t28732\t23015\t82141\t65897\nAmortization of debt discount and issuance costs\t12098\t13512\t41466\t39400\nNon-cash lease expense\t22141\t17081\t60389\t49155\nOther\t(8760)\t2744\t8040\t(8953)\nChanges in operating assets and liabilities net of business combinations:\t\t\t\t\nTrade and other receivables net\t(53923)\t2197\t127663\t86139\nDeferred costs\t(41823)\t(34415)\t(101724)\t(81107)\nPrepaid expenses and other assets\t25898\t7463\t36738\t677\nAccounts payable\t3762\t1938\t(9313)\t4488\nAccrued expenses and other liabilities\t(5037)\t41716\t(46378)\t6595\nUnearned revenue\t1358\t(4755)\t(239899)\t(68392)\nNet cash provided by (used in) operating activities\t293802\t258002\t714695\t567484\nCash flows from investing activities:\t\t\t\t\nPurchases of marketable securities\t(806713)\t(375144)\t(1963244)\t(1429046)\nMaturities of marketable securities\t427910\t494023\t1282324\t1339830\nSales of marketable securities\t0\t0\t5279\t55499\nOwned real estate projects\t(1072)\t(21832)\t(5323)\t(95615)\nCapital expenditures excluding owned real estate projects\t(78197)\t(55163)\t(204692)\t(196274)\nBusiness combinations net of cash acquired\t0\t0\t0\t(12885)\nPurchases of non-marketable equity and other investments\t(4618)\t(9577)\t(63218)\t(17293)\nSales and maturities of non-marketable equity and other investments\t24\t252\t6223\t252\nOther\t0\t0\t0\t(9)\nNet cash provided by (used in) investing activities\t(462666)\t32559\t(942651)\t(355541)\nCash flows from financing activities:\t\t\t\t\nProceeds from borrowings on term loan net\t0\t0\t747795\t0\nPayments on convertible senior notes\t0\t(3)\t(249946)\t(30)\nPayments on term loan\t(9375)\t0\t(9375)\t0\nProceeds from issuance of common stock from employee equity plans\t3650\t1780\t78167\t63320\nOther\t(181)\t(175)\t(2436)\t(375)\nNet cash provided by (used in) financing activities\t(5906)\t1602\t564205\t62915\nEffect of exchange rate changes\t40\t48\t546\t(204)\nNet increase (decrease) in cash cash equivalents and restricted cash\t(174730)\t292211\t336795\t274654\nCash cash equivalents and restricted cash at the beginning of period\t1246246\t624646\t734721\t642203\nCash cash equivalents and restricted cash at the end of period\t1071516\t916857\t1071516\t916857\n", "q10k_tbl_9": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nSupplemental cash flow data:\t\t\t\t\nCash paid for interest net of amounts capitalized\t5309\t959\t11686\t1431\nCash paid for income taxes\t2598\t1415\t7239\t7418\nNon-cash investing and financing activities:\t\t\t\t\nPurchases of property and equipment accrued but not paid\t49098\t33155\t49098\t33155\n", "q10k_tbl_10": "\tAs of October 31\t\n\t2020\t2019\nReconciliation of cash cash equivalents and restricted cash as shown in the statements of cash flows:\t\t\nCash and cash equivalents\t1067038\t912748\nRestricted cash included in Prepaid expenses and other current assets\t4351\t3984\nRestricted cash included in Other assets\t127\t125\nTotal cash cash equivalents and restricted cash\t1071516\t916857\n", "q10k_tbl_11": "\tAmortized Cost\tUnrealized Gains\tUnrealized Losses\tAggregate Fair Value\nU.S. treasury securities\t930774\t274\t(26)\t931022\nU.S. agency obligations\t542942\t144\t(136)\t542950\nCorporate bonds\t355847\t2442\t(12)\t358277\nCommercial paper\t367413\t0\t0\t367413\n\t2196976\t2860\t(174)\t2199662\nIncluded in Cash and cash equivalents\t329586\t1\t(1)\t329586\nIncluded in Marketable securities\t1867390\t2859\t(173)\t1870076\n", "q10k_tbl_12": "\tAmortized Cost\tUnrealized Gains\tUnrealized Losses\tAggregate Fair Value\nU.S. treasury securities\t312183\t492\t(5)\t312670\nU.S. agency obligations\t169613\t99\t(44)\t169668\nCorporate bonds\t504434\t2476\t0\t506910\nCommercial paper\t364701\t0\t0\t364701\n\t1350931\t3067\t(49)\t1353949\nIncluded in Cash and cash equivalents\t140517\t0\t0\t140517\nIncluded in Marketable securities\t1210414\t3067\t(49)\t1213432\n", "q10k_tbl_13": "\tCondensed Consolidated Balance Sheets Location\tOctober 31 2020\tJanuary 31 2020\nMoney market funds (1)\tCash and cash equivalents\t517031\t386909\nMarketable equity investments (1)\tMarketable securities\t10696\t0\nEquity investments accounted for under the equity method\tOther assets\t48181\t0\nNon-marketable equity investments measured using the measurement alternative (2)\tOther assets\t62741\t59026\n\t\t638649\t445935\n", "q10k_tbl_14": "\tThree Months Ended October 31\t\t\t\tNine Months Ended October 31\t\t\n2020\t\t2019\t\t2020\t\t2019\nNet realized gains (losses) recognized on equity investments sold\t0\t\t102\t\t1591\t\t6946\nNet unrealized gains (losses) recognized on equity investments held\t3830\t\t0\t\t1643\t\t2169\nTotal net gains (losses) recognized in Other income (expense) net\t3830\t\t102\t\t3234\t\t9115\n", "q10k_tbl_15": "\tLevel 1\tLevel 2\tLevel 3\tTotal\nU.S. treasury securities\t931022\t0\t0\t931022\nU.S. agency obligations\t0\t542950\t0\t542950\nCorporate bonds\t0\t358277\t0\t358277\nCommercial paper\t0\t367413\t0\t367413\nMoney market funds\t517031\t0\t0\t517031\nMarketable equity investments\t10696\t0\t0\t10696\nForeign currency derivative assets\t0\t20478\t0\t20478\nTotal assets\t1458749\t1289118\t0\t2747867\nForeign currency derivative liabilities\t0\t13787\t0\t13787\nTotal liabilities\t0\t13787\t0\t13787\n", "q10k_tbl_16": "\tLevel 1\tLevel 2\tLevel 3\tTotal\nU.S. treasury securities\t312670\t0\t0\t312670\nU.S. agency obligations\t0\t169668\t0\t169668\nCorporate bonds\t0\t506910\t0\t506910\nCommercial paper\t0\t364701\t0\t364701\nMoney market funds\t386909\t0\t0\t386909\nForeign currency derivative assets\t0\t33274\t0\t33274\nTotal assets\t699579\t1074553\t0\t1774132\nForeign currency derivative liabilities\t0\t3996\t0\t3996\nTotal liabilities\t0\t3996\t0\t3996\n", "q10k_tbl_17": "\tOctober 31 2020\t\tJanuary 31 2020\t\n\tNet Carrying Amount\tEstimated Fair Value\tNet Carrying Amount\tEstimated Fair Value\n1.50% Convertible senior notes\t0\t0\t244319\t571057\n0.25% Convertible senior notes\t1053550\t1732671\t1017967\t1587978\n", "q10k_tbl_18": "\tOctober 31 2020\tJanuary 31 2020\nLand and land improvements\t37065\t38737\nBuildings\t493757\t489028\nComputers equipment and software\t894031\t723482\nFurniture and fixtures\t54952\t51917\nLeasehold improvements\t200807\t189668\nProperty and equipment gross\t1680612\t1492832\nLess accumulated depreciation and amortization\t(704002)\t(556653)\nProperty and equipment net\t976610\t936179\n", "q10k_tbl_19": "\tOctober 31 2020\tJanuary 31 2020\nDeveloped technology\t218400\t218400\nCustomer relationships\t224000\t224000\nTrade name\t12400\t12400\nBacklog\t11000\t11000\nAcquisition-related intangible assets gross\t465800\t465800\nLess accumulated amortization\t(203197)\t(157399)\nAcquisition-related intangible assets net\t262603\t308401\n", "q10k_tbl_20": "Fiscal Period:\t\nRemainder of 2021\t13977\n2022\t52833\n2023\t50109\n2024\t38933\n2025\t27500\nThereafter\t79251\nTotal\t262603\n", "q10k_tbl_21": "\tOctober 31 2020\tJanuary 31 2020\nNon-marketable equity and other investments (1)\t76155\t75004\nEquity investments accounted for under the equity method\t48181\t0\nPrepayments for goods and services\t20219\t27928\nTechnology patents and other intangible assets net\t15564\t17898\nNet deferred tax assets\t7180\t6912\nDeposits\t5869\t6335\nDerivative assets\t5037\t9529\nOther\t1782\t999\nTotal\t179987\t144605\n", "q10k_tbl_22": "Fiscal Period:\t\nRemainder of 2021\t719\n2022\t2620\n2023\t2348\n2024\t2040\n2025\t1569\nThereafter\t6268\nTotal\t15564\n", "q10k_tbl_23": "\tCondensed Consolidated Balance Sheets Location\tOctober 31 2020\tJanuary 31 2020\nDerivative assets:\t\t\t\nForeign currency forward contracts designated as cash flow hedges\tPrepaid expenses and other current assets\t14830\t20944\nForeign currency forward contracts designated as cash flow hedges\tOther assets\t5024\t9529\nForeign currency forward contracts not designated as hedges\tPrepaid expenses and other current assets\t611\t2801\nForeign currency forward contracts not designated as hedges\tOther assets\t13\t0\nTotal derivative assets\t\t20478\t33274\nDerivative liabilities:\t\t\t\nForeign currency forward contracts designated as cash flow hedges\tAccrued expenses and other current liabilities\t6072\t1211\nForeign currency forward contracts designated as cash flow hedges\tOther liabilities\t7049\t1809\nForeign currency forward contracts not designated as hedges\tAccrued expenses and other current liabilities\t643\t976\nForeign currency forward contracts not designated as hedges\tOther liabilities\t23\t0\nTotal derivative liabilities\t\t13787\t3996\n", "q10k_tbl_24": "\tCondensed Consolidated Statements of Operations Location\t\tThree Months Ended October 31\t\t\t\tNine Months Ended October 31\t\t\n\t\t2020\t\t2019\t\t2020\t\t2019\nTotal revenues\tRevenues\t\t1105960\t\t938100\t\t3186312\t\t2650907\nAmount of gains (losses) related to foreign currency forward contracts designated as cash flow hedges\tRevenues\t\t5568\t\t1914\t\t15332\t\t2826\n", "q10k_tbl_25": "\tCondensed Consolidated Statements of Operations and Statements of Comprehensive Loss Locations\t\tThree Months Ended October 31\t\t\t\tNine Months Ended October 31\t\t\n\t\t2020\t\t2019\t\t2020\t\t2019\nGains (losses) recognized in OCI\tNet change in market value of effective foreign currency forward exchange contracts\t\t8612\t\t(8607)\t\t(7153)\t\t29183\nGains (losses) reclassified from AOCI into income (effective portion)\tRevenues\t\t5568\t\t1914\t\t15332\t\t2826\n", "q10k_tbl_26": "\tCondensed Consolidated Statements of Operations Location\t\tThree Months Ended October 31\t\t\t\tNine Months Ended October 31\t\t\n\t\t2020\t\t2019\t\t2020\t\t2019\nForeign currency forward contracts not designated as hedges\tOther income (expense) net\t\t151\t\t(1727)\t\t1524\t\t2900\n", "q10k_tbl_27": "\tGross Amounts of Recognized Assets\tGross Amounts Offset on the Condensed Consolidated Balance Sheets\t\tNet Amounts of Assets Presented on the Condensed Consolidated Balance Sheets\t\tGross Amounts Not Offset on the Condensed Consolidated Balance Sheets\t\tNet Assets Exposed\n\t\t\tFinancial Instruments\t\tCash Collateral Received\t\nDerivative assets:\t\t\t\t\t\t\t\t\nCounterparty A\t553\t0\t\t553\t\t(1785)\t0\t(1232)\nCounterparty B\t17975\t0\t\t17975\t\t(4732)\t0\t13243\nCounterparty C\t1950\t0\t\t1950\t\t(7270)\t0\t(5320)\nTotal\t20478\t0\t\t20478\t\t(13787)\t0\t6691\n", "q10k_tbl_28": "\tGross Amounts of Recognized Liabilities\tGross Amounts Offset on the Condensed Consolidated Balance Sheets\t\tNet Amounts of Liabilities Presented on the Condensed Consolidated Balance Sheets\t\tGross Amounts Not Offset on the Condensed Consolidated Balance Sheets\t\tNet Liabilities Exposed\n\t\t\tFinancial Instruments\t\tCash Collateral Pledged\t\nDerivative liabilities:\t\t\t\t\t\t\t\t\nCounterparty A\t1785\t0\t\t1785\t\t(1785)\t0\t0\nCounterparty B\t4732\t0\t\t4732\t\t(4732)\t0\t0\nCounterparty C\t7270\t0\t\t7270\t\t(7270)\t0\t0\nTotal\t13787\t0\t\t13787\t\t(13787)\t0\t0\n", "q10k_tbl_29": "\tOctober 31 2020\tJanuary 31 2020\n2020 Notes net of unamortized debt discounts of $0 and $5319 respectively and unamortized debt issuance costs of $0 and $307 respectively\t0\t244319\n2022 Notes net of unamortized debt discounts of $90964 and $124403 respectively and unamortized debt issuance costs of $5486 and $7630 respectively\t1053550\t1017967\nTerm Loan net of unamortized debt discounts of $1783 and $0 respectively and unamortized debt issuance costs of $164 and $0 respectively\t738678\t0\nTotal debt\t1792228\t1262286\nLess: current debt\t(1091050)\t(244319)\nTotal debt noncurrent\t701178\t1017967\n", "q10k_tbl_30": "Fiscal Period:\t\nRemainder of 2021\t9375\n2022\t37500\n2023\t1225000\n2024\t75000\n2025\t75000\nThereafter\t468750\nTotal\t1890625\n", "q10k_tbl_31": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nContractual interest expense\t4245\t1657\t11675\t4969\nInterest cost related to amortization of debt discount\t11374\t13584\t38993\t40256\nInterest cost related to amortization of debt issuance costs\t724\t882\t2473\t2648\nTotal interest expense\t16343\t16123\t53141\t47873\n", "q10k_tbl_32": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nOperating lease cost\t24638\t19735\t67873\t57210\nShort-term lease cost\t3443\t4135\t11875\t11980\nVariable lease cost\t4563\t4042\t13899\t12606\nTotal operating lease cost\t32644\t27912\t93647\t81796\n", "q10k_tbl_33": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCash paid for operating lease liabilities\t22765\t19089\t64930\t54597\nOperating lease right-of-use assets obtained in exchange for new operating lease liabilities (1)\t113219\t10633\t183722\t337654\n", "q10k_tbl_34": "\tOctober 31 2020\tJanuary 31 2020\nWeighted average remaining lease term (in years)\t6\t6\nWeighted average discount rate\t1.81%\t3.36%\n", "q10k_tbl_35": "Fiscal Period:\t\nRemainder of 2021\t21398\n2022\t94858\n2023\t83040\n2024\t76189\n2025\t65123\nThereafter\t139056\nTotal lease payments\t479664\nLess imputed interest\t(42212)\nTotal\t437452\n", "q10k_tbl_36": "\tNumber of Shares\tWeighted-Average Grant Date Fair Value\nBalance as of January 31 2020\t11914064\t147.96\nRSUs granted\t7963747\t150.76\nRSUs vested\t(4630623)\t138.81\nRSUs forfeited\t(828949)\t147.34\nBalance as of October 31 2020\t14418239\t152.48\n", "q10k_tbl_37": "\tOutstanding Stock Options\tWeighted-Average Exercise Price\tAggregate Intrinsic Value\nBalance as of January 31 2020\t3435577\t9.78\t601\nStock options exercised\t(1709799)\t6.32\t\nStock options canceled\t(41363)\t39.22\t\nBalance as of October 31 2020\t1684415\t12.57\t333\nVested and expected to vest as of October 31 2020\t1679303\t12.50\t332\nExercisable as of October 31 2020\t1521062\t10.33\t304\n", "q10k_tbl_38": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nInterest income\t3610\t10803\t16455\t32392\nInterest expense (1)\t(16370)\t(16205)\t(53211)\t(42279)\nOther (2)\t3914\t1266\t5484\t12786\nOther income (expense) net\t(8846)\t(4136)\t(31272)\t2899\n", "q10k_tbl_39": "\tThree Months Ended October 31\t\t\t\tNine Months Ended October 31\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\n\tClass A\tClass B\tClass A\tClass B\tClass A\tClass B\tClass A\tClass B\nNet loss per share basic and diluted:\t\t\t\t\t\t\t\t\nNumerator:\t\t\t\t\t\t\t\t\nAllocation of distributed net loss\t(18199)\t(6141)\t(83529)\t(32200)\t(156526)\t(54198)\t(252634)\t(100082)\nDenominator:\t\t\t\t\t\t\t\t\nWeighted-average common shares outstanding\t178004\t60055\t164896\t63565\t175071\t60614\t161924\t64147\nBasic and diluted net loss per share\t(0.10)\t(0.10)\t(0.51)\t(0.51)\t(0.89)\t(0.89)\t(1.56)\t(1.56)\n", "q10k_tbl_40": "\tAs of October 31\t\n\t2020\t2019\nOutstanding common stock options\t1685\t4009\nUnvested RSUs and PRSUs\t15062\t13329\nShares related to the convertible senior notes\t7818\t10876\nShares subject to warrants related to the issuance of convertible senior notes\t10520\t10876\nShares issuable pursuant to the ESPP\t463\t394\nTotal\t35548\t39484\n", "q10k_tbl_41": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nUnited States\t833544\t704263\t2400940\t2009360\nOther countries\t272416\t233837\t785372\t641547\nTotal\t1105960\t938100\t3186312\t2650907\n", "q10k_tbl_42": "\tOctober 31 2020\tJanuary 31 2020\nUnited States\t1185510\t1064292\nIreland\t133923\t122619\nOther countries\t72724\t40170\nTotal\t1392157\t1227081\n", "q10k_tbl_43": "\tThree Months Ended October 31\t\t\tNine Months Ended October 31\t\t\n\t2020\t2019\t% Change\t2020\t2019\t% Change\nSubscription services\t968547\t798516\t21%\t2782201\t2256695\t23%\nProfessional services\t137413\t139584\t(2)%\t404111\t394212\t3%\nTotal revenues\t1105960\t938100\t18%\t3186312\t2650907\t20%\n", "q10k_tbl_44": "\tThree Months Ended October 31 2020\t\t\t\n\tGAAP Operating Expenses\tShare-Based Compensation Expenses (1)\tOther Operating Expenses (2)\tNon-GAAP Operating Expenses (3)\nCosts of subscription services\t152396\t(16767)\t(7811)\t127818\nCosts of professional services\t142785\t(27349)\t(824)\t114612\nProduct development\t419962\t(128423)\t(4006)\t287533\nSales and marketing\t302870\t(54077)\t(8352)\t240441\nGeneral and administrative\t102024\t(33216)\t(1355)\t67453\nTotal costs and expenses\t1120037\t(259832)\t(22348)\t837857\n", "q10k_tbl_45": "\tThree Months Ended October 31 2019\t\t\t\n\tGAAP Operating Expenses\tShare-Based Compensation Expenses (1)\tOther Operating Expenses (2)\tNon-GAAP Operating Expenses (3)\nCosts of subscription services\t122305\t(13634)\t(7593)\t101078\nCosts of professional services\t148625\t(22249)\t(569)\t125807\nProduct development\t401742\t(118215)\t(4420)\t279107\nSales and marketing\t286794\t(47142)\t(7820)\t231832\nGeneral and administrative\t88884\t(29762)\t(1453)\t57669\nTotal costs and expenses\t1048350\t(231002)\t(21855)\t795493\n", "q10k_tbl_46": "\tNine Months Ended October 31 2020\t\t\t\n\tGAAP Operating Expenses\tShare-Based Compensation Expenses (1)\tOther Operating Expenses (2)\tNon-GAAP Operating Expenses (3)\nCosts of subscription services\t442666\t(45484)\t(26298)\t370884\nCosts of professional services\t442422\t(74467)\t(4843)\t363112\nProduct development\t1282127\t(378950)\t(20710)\t882467\nSales and marketing\t897924\t(150881)\t(26841)\t720202\nGeneral and administrative\t296461\t(97958)\t(5111)\t193392\nTotal costs and expenses\t3361600\t(747740)\t(83803)\t2530057\n", "q10k_tbl_47": "\tNine Months Ended October 31 2019\t\t\t\n\tGAAP Operating Expenses\tShare-Based Compensation Expenses (1)\tOther Operating Expenses (2)\tNon-GAAP Operating Expenses (3)\nCosts of subscription services\t355935\t(36050)\t(31992)\t287893\nCosts of professional services\t424548\t(57390)\t(5261)\t361897\nProduct development\t1127695\t(315210)\t(23431)\t789054\nSales and marketing\t839930\t(128686)\t(31103)\t680141\nGeneral and administrative\t258932\t(88122)\t(6772)\t164038\nTotal costs and expenses\t3007040\t(625458)\t(98559)\t2283023\n", "q10k_tbl_48": "\tThree Months Ended October 31\t\tNine Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nNet cash provided by (used in):\t\t\t\t\nOperating activities\t293802\t258002\t714695\t567484\nInvesting activities\t(462666)\t32559\t(942651)\t(355541)\nFinancing activities\t(5906)\t1602\t564205\t62915\nEffect of exchange rate changes\t40\t48\t546\t(204)\nNet increase (decrease) in cash cash equivalents and restricted cash\t(174730)\t292211\t336795\t274654\n", "q10k_tbl_49": "\tPayments Due by Period\t\t\t\t\n\t(in thousands)\t\t\t\t\n\tTotal\tRemainder of Fiscal 2021\tFiscal 2022 - Fiscal 2023\tFiscal 2024 - Fiscal 2025\tThereafter\nTerm Loan\t740625\t9375\t112500\t150000\t468750\nInterest obligation on Term Loan\t40047\t3486\t19410\t15546\t1605\nTotal\t780672\t12861\t131910\t165546\t470355\n", "q10k_tbl_50": "\t\tIncorporation by Reference\t\t\t\t\nExhibit Number\t\tForm\tFile Number\tFiling Date\tExhibit Number\tFiled Herewith\n10.1†\tWorkday Inc. Change in Control Policy\t\t\t\t\tX\n31.1\tCertification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 as amended\t\t\t\t\tX\n31.2\tCertification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 as amended\t\t\t\t\tX\n31.3\tCertification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 as amended\t\t\t\t\tX\n32.1\tCertification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\t\t\t\t\tX\n32.2\tCertification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\t\t\t\t\tX\n32.3\tCertification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\t\t\t\t\tX\n101.INS\tInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)\t\t\t\t\tX\n101.SCH\tInline XBRL Taxonomy Schema Linkbase Document\t\t\t\t\tX\n101.CAL\tInline XBRL Taxonomy Calculation Linkbase Document\t\t\t\t\tX\n101.DEF\tInline XBRL Taxonomy Definition Linkbase Document\t\t\t\t\tX\n101.LAB\tInline XBRL Taxonomy Labels Linkbase Document\t\t\t\t\tX\n101.PRE\tInline XBRL Taxonomy Presentation Linkbase Document\t\t\t\t\tX\n104\tCover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)\t\t\t\t\tX\n†\tIndicates a management contract or compensatory plan.\t\t\t\t\t\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_8"}None
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended October 31, 2020
OR
☐
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For transition period from to
Commission File Number: 001-35680
WORKDAY, INC.
(Exact name of registrant as specified in its charter)
Delaware
20-2480422
(State or other jurisdiction of incorporation or organization)
(I.R.S Employer Identification No.)
6110 Stoneridge Mall Road
Pleasanton, California94588
(Address of principal executive offices)
(925) 951-9000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, par value $0.001
WDAY
The Nasdaq Stock Market LLC
(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 Securities Exchange Act of 1934 (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 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 filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller 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 ☒
As of November 18, 2020, there were approximately 180 million shares of the registrant’s Class A common stock, net of treasury stock, and 60 million shares of the registrant's Class B common stock outstanding.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
Three Months Ended October 31,
Nine Months Ended October 31,
2020
2019
2020
2019
Net loss
$
(24,340)
$
(115,729)
$
(210,724)
$
(352,716)
Other comprehensive (loss) income, net of tax:
Net change in foreign currency translation adjustment
(2)
173
435
(420)
Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision of $0, $444, $0, and $875, respectively
(2,578)
1,194
(332)
2,786
Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $0, $(1,315), $0, and $3,295, respectively
3,044
(9,206)
(22,485)
23,062
Other comprehensive (loss) income, net of tax
464
(7,839)
(22,382)
25,428
Comprehensive loss
$
(23,876)
$
(123,568)
$
(233,106)
$
(327,288)
See Notes to Condensed Consolidated Financial Statements
Notes to Condensed Consolidated Financial Statements
Note 1. Overview and Basis of Presentation
Company and Background
Workday delivers financial management, human resources, planning, spend management, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies. We offer innovative and adaptable technology focused on the consumer internet experience and cloud delivery model. Our applications are designed for global enterprises to manage complex and dynamic operating environments. We provide our customers highly adaptable, accessible, and reliable applications to manage critical business functions that help enable them to optimize their financial and human resources. We were originally incorporated in March 2005 in Nevada, and in June 2012, we reincorporated in Delaware. As used in this report, the terms “Workday,” “registrant,” “we,” “us,” and “our” mean Workday, Inc. and its subsidiaries unless the context indicates otherwise.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Workday, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the information contained herein reflects all adjustments necessary for a fair presentation of Workday’s financial position, results of operations, stockholders’ equity, and cash flows. All such adjustments are of a normal, recurring nature. The results of operations for the quarter ended October 31, 2020, shown in this report are not necessarily indicative of the results to be expected for the full year ending January 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the SEC on March 3, 2020.
There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended January 31, 2020, other than the adoption of accounting pronouncements as described in Note 2, Accounting Standards. Certain prior period amounts reported in our condensed consolidated financial statements have been reclassified to conform to current period presentation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates, judgments, and assumptions include, but are not limited to the fair value of assets acquired and liabilities assumed through business combinations, the determination of the period of benefit for deferred commissions, certain assumptions used in the valuation of equity awards, and assumptions used in the valuation of non-marketable equity investments. Actual results could differ from those estimates and such differences could be material to our condensed consolidated financial statements.
Segment Information
We operate in one operating segment, cloud applications. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by chief operating decision makers, who are our co-chief executive officers, in deciding how to allocate resources and assessing performance. Our chief operating decision makers allocate resources and assess performance based upon discrete financial information at the consolidated level.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. We adopted this standard effective February 1, 2020, using a modified retrospective approach, which resulted in a cumulative-effect adjustment of $0.2 million to Accumulated deficit.
Under the new standard, we assess our allowance for credit losses on trade receivables by taking into consideration forecasts of future economic conditions, information about past events, such as our historical trend of write-offs, and customer-specific circumstances, such as bankruptcies and disputes. The allowance for credit losses on trade receivables is recorded in operating expenses on our condensed consolidated statements of operations.
With respect to available-for-sale debt securities, when the fair value of the security is below its amortized cost, the amortized cost should be written down to its fair value if i) it is more likely than not that management is required to sell the impaired security before recovery of its amortized basis or ii) management has the intention to sell the security. If neither of the conditions are met, we must determine whether the impairment is due to credit losses. To determine the amount of credit losses, we compare the present value of the expected cash flows of the security, derived by taking into account the issuers’ credit ratings and remaining payment terms, with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in Other income (expense), net on our condensed consolidated statements of operations. Non-credit related impairment losses are recorded in Other comprehensive income (loss) (“OCI”).
ASU No. 2018-15
In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, 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. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements.
We adopted this standard effective February 1, 2020, using a prospective approach. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. Subsequent impact on our condensed consolidated financial statements will depend on the magnitude of implementation costs to be incurred. Implementation costs capitalized subsequent to adoption will be recognized in operating expenses on our condensed consolidated statements of operations over the noncancelable period of the hosting arrangement plus any renewal periods reasonably certain to be taken.
ASU No. 2019-12
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies accounting guidance for certain tax matters including franchise taxes, certain transactions that result in a step-up in tax basis of goodwill, and enacted changes in tax laws in interim periods. In addition, it eliminates a company’s need to evaluate certain exceptions relating to the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments, and interim period income tax accounting for year-to-date losses that exceed anticipated losses.
We adopted this standard effective February 1, 2020. We adopted the amendments in this update on a retrospective basis for the provision related to franchise taxes and prospectively for all other applicable amendments. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to GAAP guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. We may elect to apply the amendments prospectively through December 31, 2022. The impact on our condensed consolidated financial statements from the adoption of this standard is expected to be immaterial.
ASU No. 2020-06
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for our interim and annual periods beginning February 1, 2022, and earlier adoption is permitted. We are currently evaluating the impact of the adoption of this standard on our condensed consolidated financial statements.
Note 3. Investments
Debt Securities
As of October 31, 2020, debt securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
U.S. treasury securities
$
930,774
$
274
$
(26)
$
931,022
U.S. agency obligations
542,942
144
(136)
542,950
Corporate bonds
355,847
2,442
(12)
358,277
Commercial paper
367,413
—
—
367,413
$
2,196,976
$
2,860
$
(174)
$
2,199,662
Included in Cash and cash equivalents
$
329,586
$
1
$
(1)
$
329,586
Included in Marketable securities
$
1,867,390
$
2,859
$
(173)
$
1,870,076
As of January 31, 2020, debt securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
U.S. treasury securities
$
312,183
$
492
$
(5)
$
312,670
U.S. agency obligations
169,613
99
(44)
169,668
Corporate bonds
504,434
2,476
—
506,910
Commercial paper
364,701
—
—
364,701
$
1,350,931
$
3,067
$
(49)
$
1,353,949
Included in Cash and cash equivalents
$
140,517
$
—
$
—
$
140,517
Included in Marketable securities
$
1,210,414
$
3,067
$
(49)
$
1,213,432
We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets on the condensed consolidated balance sheets. Debt securities included in Marketable securities on the condensed consolidated balance sheets consist of securities with original maturities at the time of purchase greater than three months, and the remainder of the securities is included in Cash and cash equivalents.
The unrealized losses associated with our debt securities were immaterial as of October 31, 2020, and January 31, 2020, and we did not recognize any credit losses related to our debt securities during the three and nine months ended October 31, 2020.
There were no sales of debt securities during the three months ended October 31, 2020, and 2019. We sold $5 million of debt securities during the nine months ended October 31, 2020, and 2019. The realized gains and losses from the sales were immaterial.
Equity Investments
Equity investments consisted of the following (in thousands):
Condensed Consolidated Balance Sheets Location
October 31, 2020
January 31, 2020
Money market funds (1)
Cash and cash equivalents
$
517,031
$
386,909
Marketable equity investments (1)
Marketable securities
10,696
—
Equity investments accounted for under the equity method
Other assets
48,181
—
Non-marketable equity investments measured using the measurement alternative (2)
Other assets
62,741
59,026
$
638,649
$
445,935
(1)Investments with readily determinable fair values.
(2)Investments in privately held companies without readily determinable fair values.
Total realized and unrealized gains and losses associated with our equity investments consisted of the following (in thousands):
Three Months Ended October 31,
Nine Months Ended October 31,
2020
2019
2020
2019
Net realized gains (losses) recognized on equity investments sold
$
—
$
102
$
1,591
$
6,946
Net unrealized gains (losses) recognized on equity investments held
3,830
—
1,643
2,169
Total net gains (losses) recognized in Other income (expense), net
$
3,830
$
102
$
3,234
$
9,115
We determine at the inception of each arrangement whether an investment or other interest is considered a variable interest entity (“VIE”). If the investment or other interest is determined to be a VIE, we must evaluate whether we are considered the primary beneficiary. For investments in VIEs in which we are considered the primary beneficiary, the assets, liabilities, and results of operations of the VIE are consolidated in our condensed consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to direct the activities that most significantly impact the VIE’s economic performance; and (2) has the obligation to absorb losses or the right to receive benefits from the VIE. As of October 31, 2020, there were no VIEs for which we were the primary beneficiary.
Equity Investments Accounted for Under the Equity Method
Investments in VIEs for which we are not the primary beneficiary or do not own a controlling interest but can exercise significant influence over the investee are accounted for under the equity method of accounting. These investments are measured at cost, less any impairment, plus or minus our share of earnings and losses and are included in Other assets on the condensed consolidated balance sheets. Our share of earnings and losses are recorded in Other income (expense), net, on the condensed consolidated statements of operations.
During the first quarter of fiscal 2021, we made an equity investment of $50 million in a limited partnership, which represents an ownership in