RECLASSIFICATIONS

The Company reclassified certain expenses on its Consolidated Statement of Operations effective for the fourth quarter of fiscal 2019. These expenses are related to servicing our customers, and include customer deployment, technical support, professional services and other costs, which have been reclassified from Sales & Marketing expense to Cost of Revenues, Research & Development expenses or General & Administrative expenses.

The Company believes these classifications provide additional clarity and insights into the Company’s go-to-market, demand generation and sales execution activities, and how the total Sales & Marketing spend drives revenue generation, in light of the recent strategic and organizational changes impacting the Company’s channel, marketing and support activities.

The reclassifications did not have any impact to the consolidated operating income (loss), net income (loss) or cash flows.

The revised Consolidated Statements of Operations three month periods ended June 30, 2016, 2017 and 2018, September 30, 2016, 2017 and 2018, December 31, 2016, 2017, and 2018, and March 31, 2017, 2018, and 2019 and for the twelve month periods ended March 31, 2017, 2018, and 2019 are as follows (in thousands):



													Twelve Months
	Three Months Ended (unaudited)												Ended
	June 30,			September 30,			December 31,			March 31,			March 31,
	2016			2016			2016			2017			2017
Pre-Reclassification
Total revenues	$	60,041		$	63,183		$	63,676		$	66,489		$	253,388
Cost of service revenue	10,235			10,837			10,526			10,803			42,400
Cost of product revenue	5,505			5,782			4,240			4,187			19,714
Research and development	6,710			6,505			7,094			7,142			27,452
Sales and marketing	31,691			33,691			35,667			38,228			139,277
General and administrative	6,801			6,747			7,852			9,814			31,214
Loss from operations	$	(901	)	$	(379	)	$	(1,703	)	$	(3,685	)	$	(6,669	)

Reclassifications
Total revenues	$	—		$	—		$	—		$	—		$	—
Cost of service revenue	7,466			6,675			6,759			7,276			28,176
Cost of product revenue	—			—			—			—			—
Research and development	471			330			368			378			1,547
Sales and marketing	(10,247		)	(9,363		)	(9,897		)	(10,877		)	(40,384		)
General and administrative	2,310			2,358			2,770			3,223			10,661
Loss from operations	$	—		$	—		$	—		$	—		$	—

Post-Reclassification
Total revenues	$	60,041		$	63,183		$	63,676		$	66,489		$	253,388
Cost of service revenue	17,701			17,512			17,285			18,079			70,576
Cost of product revenue	5,505			5,782			4,240			4,187			19,714
Research and development	7,181			6,835			7,462			7,520			28,999
Sales and marketing	21,444			24,328			25,770			27,351			98,893
General and administrative	9,111			9,105			10,622			13,037			41,875
Loss from operations	$	(901	)	$	(379	)	$	(1,703	)	$	(3,685	)	$	(6,669	)



													Twelve Months
	Three Months Ended (unaudited)												Ended
	June 30,			September 30,			December 31,			March 31,			March 31,
	2017			2017			2017			2018			2018
Pre-Reclassification
Total revenues	$	69,098		$	72,483		$	75,575		$	79,344		$	296,500
Cost of service revenue	11,662			12,757			12,318			13,952			50,689
Cost of product revenue	4,884			5,098			4,675			5,826			20,482
Research and development	7,943			8,311			8,527			10,016			34,797
Sales and marketing	41,110			41,163			48,830			52,940			184,044
General and administrative	8,956			9,616			10,003			10,340			38,915
Impairment of goodwill, intangible assets, and equipment	—			—			9,469			—			9,469
Loss from operations	$	(5,457	)	$	(4,462	)	$	(18,247	)	$	(13,730	)	$	(41,896	)

Reclassifications
Total revenues	$	—		$	—		$	—		$	—		$	—
Cost of service revenue	8,497			8,591			8,586			9,881			35,555
Cost of product revenue	—			—			—			—			—
Research and development	418			403			376			411			1,608
Sales and marketing	(12,650		)	(12,483		)	(12,448		)	(12,518		)	(50,099		)
General and administrative	3,735			3,489			3,486			2,226			12,936
Loss from operations	$	—		$	—		$	—		$	—		$	—

Post-Reclassification
Total revenues	$	69,098		$	72,483		$	75,575		$	79,344		$	296,500
Cost of service revenue	20,159			21,348			20,904			23,833			86,244
Cost of product revenue	4,884			5,098			4,675			5,826			20,482
Research and development	8,361			8,714			8,903			10,427			36,405
Sales and marketing	28,460			28,680			36,382			40,422			133,945
General and administrative	12,691			13,105			13,489			12,566			51,851
Impairment of goodwill, intangible assets, and equipment	—			—			9,469			—			9,469
Loss from operations	$	(5,457	)	$	(4,462	)	$	(18,247	)	$	(13,730	)	$	(41,896	)




	Three Months Ended (unaudited)												Twelve Months
	As Previously Reported												Ended
	June 30,			September 30,			December 31,			March 31,			March 31,
	2018			2018			2018			2019			2019
Pre-Reclassification
Total revenues	$	83,225		$	85,682		$	89,912		$	93,767		$	352,586
Cost of service revenue	15,079			15,866			17,043			17,672			65,660
Cost of product revenue	6,281			5,397			5,318			5,784			22,780
Research and development	13,110			13,933			16,876			17,815			61,734
Sales and marketing	53,305			55,930			60,717			64,610			234,562
General and administrative	11,433			16,543			14,196			16,666			58,838
Loss from operations	$	(15,983	)	$	(21,987	)	$	(24,238	)	$	(28,780	)	$	(90,988	)

Reclassifications
Total revenues	$	—		$	—		$	—		$	—		$	—
Cost of service revenue	9,470			10,336			10,589			11,137			41,532
Cost of product revenue	—			—			—			—			—
Research and development	(60		)	131			10			249			330
Sales and marketing	(12,810		)	(14,250		)	(14,441		)	(15,085		)	(56,586		)
General and administrative	3,400			3,783			3,842			3,699			14,724
Loss from operations	$	—		$	—		$	—		$	—		$	—

Post-Reclassification
Total revenues	$	83,225		$	85,682		$	89,912		$	93,767		$	352,586
Cost of service revenue	24,549			26,202			27,632			28,809			107,192
Cost of product revenue	6,281			5,397			5,318			5,784			22,780
Research and development	13,050			14,064			16,886			18,064			62,063
Sales and marketing	40,495			41,680			46,276			49,525			177,976
General and administrative	14,833			20,326			18,038			20,365			73,563
Loss from operations	$	(15,983	)	$	(21,987	)	$	(24,238	)	$	(28,780	)	$	(90,988	)