10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-35598

E2open, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	94-3366487
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

4100 East Third Avenue, Suite 400 Foster City, California 94404

(Address of Principal Executive Offices, including Zip Code)

(650) 645-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of each class)	(Name of each exchange on which registered)
Common Stock, $0.001 par value	NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or in any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  x

The aggregate market value of common stock held by non-affiliates of the registrant, computed by reference to the closing price at which the common stock was sold on August 31, 2013, the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the NASDAQ Global Market, was approximately $256.5 million. Shares of common stock held by each executive officer, director and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

On February 28, 2014, the registrant had 28,825,098 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement relating to its 2014 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

E2open, Inc.

Form 10-K

For the Fiscal Year Ended February 28, 2014

Table of Contents

Part I
Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	30
Item 4.	Mine Safety Disclosures	30
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31
Item 6.	Selected Financial Data	33
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 8.	Financial Statements and Supplementary Data	65
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	99
Item 9A.	Controls and Procedures	99
Item 9B.	Other Information	99
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	100
Item 11.	Executive Compensation	100
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	100
Item 13.	Certain Relationships and Related Transactions, and Director Independence	100
Item 14.	Principal Accounting Fees and Services	100
Part IV
Item 15.	Exhibits and Financial Statement Schedules	101
Signatures		102

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Annual Report on Form 10-K contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts”, “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements include, but are not limited to, statements about:

• Our growth strategy;

• Our plans for future products;

• Our operating results;

• Our ability to anticipate future market demands and future needs of our customers;

• Our customer concentration;

• Our ability to effectively manage our growth;

• Our expectations regarding our expenses, sales and operations;

• Our anticipated trends and challenges in the markets in which we operate;

• Our competition;

• Our ability to successfully enter new markets and manage our international expansion; and

• Our intellectual property.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report on Form 10-K. You should read this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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PART I

ITEM 1. BUSINESS

Company Overview

We are a leading provider of cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to manage demand they cannot predict with supply they do not control. Our customers depend on outsourced manufacturing strategies and complex supply chains and trading networks to compete in today’s global economy. They use our solutions to gain visibility into and control over their supply chains and trading networks through the real-time information, integrated planning, business processes, and advanced analytics that we provide. Our solutions enable our customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which our customers rely on as the single version of the truth. Our solutions empower our customers to commit with confidence to customer demand.

We refer to the combination of our software applications delivered on our cloud-based platform, the content contributed by our network participants and our enabling services as the E2open Business Network. The E2open Business Network has grown to over 38,000 unique registered trading partners and approximately 126,000 unique registered users. It allows our network participants to access and share data, plan, and execute business processes in a secure, real-time manner, while providing them with collaboration tools, analytics, and what-if scenario planning so our customers can make more informed, timely, and efficient decisions. Our customer base includes companies that represent six out of the top ten supply chains in the world, according to Gartner, Inc. , and spans several industries including many large multinational companies such as Boeing, Cisco, Dell, the GAP, GE, HP, IBM, Amazon.com, Lenovo, L’Oreal, Motorola Solutions and Vodafone. To date, our target markets have been Technology, Telecommunications, Aerospace and Defense, Industrial, and Consumer Products.

E2open transcends traditional supply chain software categories, which include business-to-business, or B2B, integration, procurement, forecasting, planning and execution, by enabling coordination, collaboration and real-time decision-making among enterprises, a core competency called “collaborative planning and execution.” By providing our solutions in an integrated cloud-based environment, our customers and their trading partners can easily share detailed and relevant content and data to gain the visibility they need for collaborative planning and execution across their extended trading network.

Our customers benefit from the following key differentiating features of the E2open Business Network:

• Cross-network analytics. We provide cross-network analytics for real-time monitoring and control of large volumes of data to sense and respond quickly and collaboratively to changes, opportunities or disruptions in the supply chain.

• Network planning and response. We enable optimization of inventory and capacity, with event-driven response planning across global trading networks. These network planning capabilities are complemented by scenario planning, traditionally referred to as a “what-if” analysis. What-if analyses can be based on profitability, revenue, segmentation and/or customer fulfillment.

• Multi-enterprise, multi-tier supply and demand process management. We support key operational processes, such as forecast, order and inventory management, for our customers and their multi-tiered supply and demand trading networks.

• Scalable, secure cloud-based connectivity trading platform. Our solutions combine B2B connectivity and integration capabilities that allow our customers to securely connect, share and act on information across their trading networks that can include thousands of partners.

• Integration with existing systems. Our highly-configurable solutions integrate with many Enterprise Resource Planning, or ERP, systems to efficiently manage complex networks and facilitate the interchange of transactions.

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We believe that the E2open Business Network is strategic to our customers in that it enables them to increase revenue and productivity, and to reduce operating expenditures, working capital and cost of goods sold. Our solutions seamlessly integrate with and enhance our customers’ mission critical business systems and processes across their trading network.

Our operations are headquartered in Foster City, California, and we have several operating locations in the U.S. as well as various international office locations in Asia and Europe. We were incorporated in Delaware in September 2003 and completed our initial public offering (“IPO”) in July 2012. Our common stock is listed on the NASDAQ Global Market under the symbol “EOPN.” As of February 28, 2014, we had 444 full-time employees.

Our Opportunity

The accelerating trends of supply chain globalization and outsourced manufacturing and distribution have combined to increase complexity and risk for brand owners while decreasing visibility into their expanding and evolving supply chains and distribution networks. These trends have created a fundamental shift in the way companies source and distribute goods and services. They have led to complex product and service delivery paradigm which increasingly relies on specialized, globally distributed trading partners to reduce costs. Cloud-based delivery of Supply Chain Management (SCM) solutions continues to specialize to the point where we believe it will ultimately separate from a centralized Enterprise Resource Planning (ERP) suite, as Customer Relationship Management (CRM) and Human Capital Management (HCM) have done over the last decade.

As trading networks become more complex, companies are increasingly demanding integrated solutions that facilitate not only collaborative inventory management, but also the demand and supply forecasts, network planning, procurement systems, order management and analytics required to efficiently coordinate a company’s entire business ecosystem. We believe a significant opportunity exists to help companies improve their competitive advantage by delivering the visibility and control once characteristic of vertically integrated companies while retaining the advantages of outsourcing. The ability to navigate modern supply chain complexities and to resolve problems in a timely and collaborative manner, combined with enhanced knowledge of end customer demand, is critical to enabling businesses to commit with confidence to customer demand.

Our Solutions

We develop, operate and market an integrated cloud-based platform that addresses supply chain management challenges by providing cross-network analytics, multi-enterprise supply and demand process management, network planning and response and B2B integration solutions for companies seeking visibility across and control over their trading networks.

We deliver our solutions in a highly secure, cloud-based computing environment. Our customers subscribe to our on-demand SaaS solutions with multi-year contract terms that are typically three to five years in length.

The E2open Business Network enables integrated planning and execution across trading partner networks. Our cloud-based technology stack is purpose-built for managing trading partner networks and enables our customers and their partners to increase their revenues while reducing costs by minimizing errors and maximizing efficiency. The key characteristics of the E2open Business Network that drive customer adoption include:

• Large global business network.

• Demand-driven model.

• Multi-tier functionality.

• Big data, fast data analytics and business intelligence.

• Cloud-based platform.

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Enterprises can leverage our enabling expertise and services when they need to deploy a new or changed process capability or add a trading partner. By creating a single, unified source of information within the trading network, we enable enterprises to operate and make decisions based on reliable and trustworthy information in real time. By implementing the E2open Business Network and adopting collaborative execution, our customers and their trading partners improve communication, multi-enterprise process performance, and tactical and strategic decision making. Our customers use our solutions to:

• Increase sales by optimizing inventory levels;

• Achieve greater revenue assurance and customer satisfaction through timely order fulfillment;

• Reduce costs and working capital requirements through automation of operations, inventory reduction and enhanced procurement efficiency;

• Achieve faster and easier on-boarding of trading partners to our platform by utilizing each partner’s existing technological infrastructure; and

• Reduce deployment risk, streamline operations and lower maintenance costs, without a significant upfront investment in on-premise software or ongoing investments in software maintenance.

Our Strategy for Growth

Our objective is to be the leading provider of multi-enterprise, cloud-based, on-demand software enabling businesses to more efficiently and profitably plan, procure, manufacture, sell and distribute products through collaborative planning and execution. The key elements of our strategy include:

• Leverage our existing network to add customers. The E2open Business Network creates a network effect by attracting the largest suppliers and customers in a particular industry vertical to establish and grow our presence. We intend to leverage our customers’ expanding ecosystems to attract new customers and convert trading partners from within our network into direct customers.

• Retain and upsell additional solutions to our existing customers. Once our customers begin to rely on the real-time data and visibility provided by our platform and solutions, they typically purchase additional solutions from us. We intend to continue to deliver best-in-class solutions and leverage our knowledge of and familiarity with our existing customers to deliver additional solutions to them.

• Expand into new verticals. We believe our experience with our customers in our initial target markets provides a successful model for future growth. We have found that the challenges presented by managing inventory, orders and planning are similar across many industries which makes our solutions applicable to a wide array of industry verticals. We intend to leverage our experience, expertise and proven customer success within our current key verticals to accelerate entry into and delivery of our solutions to these new vertical markets.

• Introduce new products. We will continue to expand our portfolio of solutions by leveraging our familiarity with advanced supply chains and approximately 38,000 of our partners in our trading network to develop new applications and introduce new products that are strategic to our customers and their trading networks.

• Expand our international presence. In 2010, we grew our sales team in Europe and we intend to hire additional sales personnel in Germany, France and the Nordic countries. In 2011, we opened an office and established a direct sales force and a sales, hosting and distribution alliance with a local partner in China. In 2013, we opened offices in Paris, France and Scandinavia. We intend to make additional investments outside of the United States in order to expand our geographic reach.

• Expand our target market to include mid-market customers. Historically, we have focused our sales and marketing efforts on the largest companies within specific vertical markets. By leveraging our established trading network and cloud-based subscription model, we can now offer cost effective solutions to expand our target market to include mid-market customers, which will be sold through our indirect sales channels.

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• Make targeted, strategic acquisitions. In 2013, we acquired ICON SCM AG, or ICON, in a transaction valued at $26.6 million in total consideration. ICON is an innovator in network planning and response based in Karlsruhe, Germany. We believe that the acquisition of ICON accelerates our product roadmap and expands our geographic footprint. We intend to continue to complement our organic growth with strategic acquisitions of technologies, solutions and businesses that enhance and expand our existing offerings.

Our Products and Services

E2open Business Network

Our software offers multi-enterprise analytics; flexible demand, supply and multi-tier processes; and B2B integration functionality configurable to the customer’s specific needs. In addition to our software offerings, we provide network content and enabling services to our customers.

E2 Analytics

Our dashboards provide predictive intelligence, based on multi-enterprise data and process input, including key performance indicators, trends, scorecards and event notifications for supply and demand. This solution provides real-time data related to transformation, aggregation and loading of standard business intelligence processes. We also provide integrated business intelligence for reporting and analysis of historical performance.

E2 Planning & Response: Rapid Optimization

Our Rapid Optimizations provide periodic, batch planning capabilities for network requirements planning and for network constrained planning.

E2 Planning & Response: Rapid Resolutions

Our Rapid Resolutions workbenches provide response planning capabilities so when change occurs planners can utilize what-if scenario planning to resolve demand and/or supply exceptions as well as simulate events such as promotions, new product introduction (NPI) and network changes. Demand prioritization enables planners to continuously course correct and commit with confidence to make the plan.

E2 Process Management: Demand

Our multi-enterprise software for demand processes allows enterprises, in their role as suppliers, to reduce the cost and complexity of order fulfillment for their products.

E2 Process Management: Multi-tier

Our multi-enterprise software for multi-tier processes allows enterprises to better manage the demand for materials, products and finished goods. Improved control and visibility is extended not only to first tier trading partners, but also to a customer’s outsourced manufacturing partners and throughout its various distribution channels.

E2 Process Management: Supply

Our multi-enterprise software for supply processes allows enterprises, in their role as customers, to better fulfill their demand for material and products into their own manufacturing and distribution facilities.

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E2 Cloud Connectivity

Our multi-enterprise software for B2B integration allows enterprises to integrate their internal applications and the applications of their trading partners through our E2open Business Network. We offer multiple connectivity options by supporting an extensive set of industry standard B2B protocols for application-to-application connectivity.

In addition, we provide a platform to support the development and leveraging of customer and trading partner communities, including the accumulation and re-use of user-generated information content.

Professional Services

We offer enabling services directly and through our channel partners that include solution consulting services, solution deployment and B2B on-boarding services that help our customers deploy our solutions. Our services are comprised of the necessary methodology, tools and experienced resources to configure and deploy our process management and integration solutions to support customers’ unique business network requirements.

Our Customers

As of February 28, 2014, we had 331 customers located in 69 countries, who use our solutions in 9 languages and trade in 26 different currencies. Our customers included 106 Enterprise Customers who purchase both on-demand software solutions and network connectivity solutions. The remaining 225 customers purchase our network connectivity solutions. For fiscal 2014, Enterprise Customers represented 99.5% of our total revenue. Our customers represent a wide range of industries and include many of the Fortune 500, among them six out of the top ten as designated in the Gartner Supply Chain Top 25.

Our customer base includes companies that have purchased our solutions directly from us as well as through our resellers and integrators. Revenue attributable to sales to customers by us directly was 91.3% of total revenue for fiscal 2014. The E2open Business Network is a community comprised of our customers, over 38,000 unique registered trading partners and approximately 126,000 unique registered users.

The following table illustrates the diversity of our customer base across various industries.

Industry	Representative Customers (1)
Computers & Peripherals, Electronics	Dell, IBM, Hitachi, Amazon.com, Lenovo, NetApp, Radisys, Seagate, Xerox
Contract Manufacturers	Celestica, OnCore
Semiconductors	Avnet (2), Foxconn, Freescale, LSI, Spansion
Telecom/Network	Audience, Alcatel-Lucent, Cisco, Motorola, Nokia Siemens Networks, Blackberry, Vodafone
Aerospace and Defense	Embraer, Exostar (2) (Customers of Exostar include BAE Systems, Boeing, Huntington Ingalls Industries, Raytheon, Rolls-Royce, UK Ministry of Defense)
Industrial Manufacturing	Diebold, Emerson, GE Energy, GE Oil & Gas, Konecranes, Omron, SPX
Consumer Goods	Avon, Coca-Cola, The GAP, GE Lighting, Guthy Renker, Land O’ Lakes, L’Oreal, Levi Strauss, Studio Moderna, Unilever, YanFeng Visteon
Medical Equipment	Bio-Rad, GE Healthcare, ELO Touch
Logistics/Wholesale Distribution	Averitt, Brightstar, Kuehne + Nagel, MavenWire, Tieto Finland, Scoular, Univar

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(1) These customers represent current Enterprise Customers that have consented to the inclusion of their names in this Annual Report on Form 10-K and represent over 99% of our total revenue for the year ended February 28, 2014.

(2) Exostar and Avnet are resellers and operating partners of ours that deliver software applications and services to companies in the United States and United Kingdom.

For fiscal 2014, no customer accounted for more than 10% of total revenue. For fiscal 2013 and 2012, two customers each accounted for more than 10% of total revenue. For fiscal 2013, BlackBerry (formerly “RIM”) and Vodafone accounted for 14.9% and 12.1% of our total revenue. For fiscal 2012, BlackBerry and Vodafone accounted for 16.8% and 14.8% of our total revenue.

Research and Development

We have over 13 years of experience defining, designing and implementing high value and robust multi-enterprise software that operates in a cloud-computing model. We also have extensive practical experience designing multi-enterprise, business process management and B2B integration systems for the industries on which we have focused to date, in particular the Technology, Aerospace and Defense, Consumer Products, Industrials, and Oil & Gas industries. We draw from our extensive experience and our ability to work closely with key customers to define new products and services that provide business solutions that are simple to use and understand.

For the years ended February 28, 2014, February 28, 2013, and February 29, 2012, we spent $18.5 million, $15.0 million, and $13.2 million on research and development expenses.

Sales and Marketing

Our products and services are sold to businesses through our worldwide sales force and channel partners.

Direct Sales. Our senior sales executives seek to establish and maintain executive-level relationships with Fortune 2,000 companies. The focus of our sales team is identifying business network-related challenges and initiatives and then engaging with these customers to develop a solution roadmap and business case. Within our direct sales channel, we use a highly interactive sales approach to grow our enterprise-level, high-revenue client base. We have two distinct sales teams, one focused on new customer acquisition and the other focused on upsell and cross-sell to our current customers.

Joint Marketing and Selling Alliances. We have developed strategic alliances with information technology (“IT”), and business services vendors that serve our targeted end markets. Our alliance strategy is three pronged:

• Resellers. We establish reselling relationships with select partners who are prominent in our target markets, such as Accenture, Avnet, Exostar, MavenWire, SAP and Tieto.

• Consulting and Systems Integrators. We work with consulting and systems integrator partners such as Accenture, Barkawi, Blackstone, Camelot, KPMG, PWC, and Oracle to collaboratively design and implement customer solutions.

• Independent Software Vendors (“ISVs”). We leverage solutions providers with expertise in certain verticals or industries to deliver comprehensive solutions for customers. Oracle is an ISV partner.

Our global headquarters is located in Foster City, California. We have eight sales offices located across the United States, Europe and Asia, including Foster City and San Jose, California, Austin and Dallas, Texas, Reading, United Kingdom, Paris, France, Karlsruhe, Germany, Helsinki, Finland, Shanghai, China and Taipei City, Taiwan.

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Operations

Certified Operators. We work with partner operators to deliver our solutions in certain vertical markets and geographies. Exostar is a certified operator and has provided E2open solutions to the Aerospace and Defense industry since 2005. We have an agreement with Camelot Information Systems Inc. to augment our delivery capabilities in China.

Data Centers. In North America, we host our development, quality assurance, configuration and staging environments at an Equinix co-location facility in Sunnyvale, California. Production environments are hosted at Equinix co-location facilities in San Jose, California and a suburb of Chicago, Illinois. In China, we host our solutions in a data center in Shanghai operated by Shanghai Telecom.

Competition

While we do not believe that any specific competitor offers the breadth of business network solutions and collaborative capabilities that we do, the distinct markets that make up the business network space are each rapidly evolving and highly competitive. We face competition from the following types of companies:

• ERP vendors. Companies such as Infor, Oracle and SAP offer ERP extension solutions that provide features similar to a limited subset of our offerings in the area of trading partner portals.

• Multi-enterprise B2B infrastructure vendors. Companies like GXS Corporation, IBM/Sterling Commerce and SPS Commerce provide point solutions in the B2B integration space.

• Niche applications vendors. Companies like JDA Software Group, Inc. have specialized functionality for specific process areas such as transportation management, demand planning or network design.

• Internally developed solutions. Potential customers with large in-house IT departments have developed applications customized for their businesses.

Technology

Our technology platform is based on a service-oriented architecture and uses J2EE technologies designed to run in a cloud-computing environment. Our technology platform addresses the requirements for multi-enterprise, business process management, management-by-exception, B2B integration and tactical and strategic decision support, while the cloud-based model provides flexibility and scalability to our customers without large up front hardware and software deployment costs.

Intellectual Property

Our success and ability to compete depends, in part, upon our ability to establish and adequately protect our core technology and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including, patents, copyrights and trademarks, as well as customary contractual protections such as non-disclosure agreements and additional contractual restrictions on disclosure and use. We also protect our intellectual property through the terms of our license agreements with customers and by confidentiality agreements and intellectual property assignment agreements with our employees, consultants, business partners and advisors where appropriate.

As of February 28, 2014, we had eight U.S. patents and one foreign issued patent and we had one U.S. and one foreign patent application pending. We do not know whether our current or future pending patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. Even if granted, there can be no assurance that these pending patent applications will provide us with protection. The issued and allowed patents begin expiring in 2021 through 2024. The name E2open and the E2open logo are registered trademarks in the United States and several foreign countries.

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Employees

As of February 28, 2014, we employed 444 people, including 90 in sales and marketing, 225 in operations and professional services, 72 in product development and 57 in general and administrative functions. We also engage a number of temporary employees and consultants to support our operations.

None of our employees are represented by a labor union. We have not experienced any work stoppages and we consider our relations with our employees to be good. Our continued success will depend upon our ability to attract and retain qualified personnel. Currently, there are no existing vacancies within our management team. All members of the current management team have been employed by us for approximately two years or more. We maintain a succession plan for key management positions to proactively manage the impact of the loss of key personnel on the operations of the business.

Executive Officers of the Registrant

The following table sets forth the names, ages and positions of our executive officers as of February 28, 2014:

Name	Age		Position
Mark E. Woodward		55	President, Chief Executive Officer and Director
Peter J. Maloney		51	Chief Financial Officer
David W. Packer		48	Chief Sales Officer
Robert Schoenthaler		44	Chief Customer Officer

Mark E. Woodward has served as our President and Chief Executive Officer and a member of our board of directors since June 2008. Prior to joining E2open, Mr. Woodward was a Senior Advisor with The Blackstone Group, an investment and advisory firm from June 2007 to June 2008. Prior to joining The Blackstone Group, Mr. Woodward consulted for several private equity firms from January to June 2007. Mr. Woodward served as President and Chief Executive Officer of Serena Software, an application lifecycle management vendor, from November 1998 to December 2006. He joined Serena in November 1998 as the Vice President of Americas Sales, was promoted to Vice President Worldwide Operations in February 2000, and then promoted to President and Chief Executive Officer in May 2000. He served on Serena’s board of directors from June 2000 to December 2006. In February 2014, he joined the board of directors of Nintex, an independent software and workflow company. Mr. Woodward attended the University of California, Los Angeles.

Peter J. Maloney has served as our Chief Financial Officer since January 2008. Mr. Maloney served as the Chief Financial Officer at SNOCAP, Inc., a digital licensing and copyright management service for online music distribution, from January 2006 to April 2008. Prior to SNOCAP, Mr. Maloney was employed by Keynote Systems, Inc., a mobile and internet performance management company, from October 2001 to January 2006 where he held senior management positions including Chief Financial Officer and Vice President of Finance. Mr. Maloney holds a Master of Business Administration degree in Corporate Finance from University of Southern California’s Marshall School of Business and a Bachelor of Business Administration degree in Economics from Temple University’s Fox School of Business. Mr. Maloney is an inactive Certified Public Accountant.

David W. Packer has served as our Chief Sales Officer since November 2013 and was previously our Senior Vice President, Worldwide Field Operations from September 2008 to October 2013. From March 2005 to September 2008, Mr. Packer was employed by Borland Software, an open application lifecycle management solutions company, where he served as Senior Vice President, Worldwide Field Operations from January 2007 to August 2008 and as Vice President, Americas from March 2005 to January 2007. Mr. Packer earned his Bachelor of Arts degree in Economics & Political Science from Claremont McKenna College and his Master of Science degree from the Massachusetts Institute of Technology.

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Robert Schoenthaler has served as our Chief Customer Officer since November 2013 and was previously our Chief Solutions Officer from July 2013 to October 2013. From April 2012 to June 2013, he served as our Senior Vice President, Customer Solutions, and from July 2007 to April 2012, he was our Senior Vice President, Deployment. From June 2006 to July 2007, Mr. Schoenthaler was the Managing Vice President of the High Tech industry segment at Hitachi Consulting, a business and consulting company. From January 1995 to February 2006, Mr. Schoenthaler worked at BearingPoint (formerly KPMG Consulting Inc.), a professional services firm offering management and consulting capabilities, where he helped lead their Consumer, Industrial and Technology practice. Mr. Schoenthaler earned his Bachelor of Science degree in Mechanical Engineering from Northwestern University.

There are no family relationships among any of our executive officers.

Available Information

Our website is located at www.e2open.com, and our investor relations website is located at http://investor.e2open.com/. The following filings are available through our investor relations website after we file them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Our Proxy Statements for our annual meetings of stockholders will be available after they are filed with the SEC. These filings are also available for download free of charge on our investor relations website. Further, a copy of this Annual Report on Form 10-K is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts and RSS feeds. Further corporate governance information, including board committee charters and our code of business conduct, is also available on our investor relations website under the heading “Corporate Governance.” The contents of our websites are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our financial statements and related notes, before deciding whether to purchase shares of our common stock. If any of the following risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Industry

We have incurred operating losses in the past and may incur operating losses in the future.

We began our operations in 2000. Throughout most of our history, we have experienced net losses and negative cash flows from operations. As of February 28, 2014 and February 28, 2013, we had accumulated deficits of $366.3 million and $341.2 million. We expect our operating expenses to increase in the future as we expand our operations. Furthermore, as a public company, we incur legal, accounting and other expenses that we did not incur as a private company. If our revenue does not grow to offset these increased expenses, we will not be profitable. We cannot assure you that we will be able to achieve or maintain profitability. You should not consider recent revenue growth as indicative of our future performance.

If we are unable to attract new customers or sell additional products to our existing customers, our revenue growth and profitability will be adversely affected.

To increase our revenue and achieve and maintain profitability, we must regularly add new customers or sell additional solutions to our existing customers, which we plan to do. Numerous factors, however, may impede our ability to add new customers and sell additional solutions to our existing customers, including our inability to convert companies that have been referred to us by our existing network into paying customers, failure to attract and effectively train new sales and marketing personnel, failure to retain and motivate our current sales and marketing personnel, failure to develop relationships with resellers or failure to ensure the effectiveness of our marketing programs. In addition, if prospective customers do not perceive our solutions to be of sufficiently high value and quality, we will not be able to attract the number and types of new customers that we are seeking.

If we are unable to attract and enable third-party service providers, our revenue and margin growth will be adversely affected.

To enable anticipated growth of product subscriptions, E2open intends to utilize partners to provide integration and deployment services. This strategy depends upon successful marketing to and recruitment of partners. It also assumes successful training and transfer of the knowledge and skills required to deploy system integration and software functionality. We cannot assure the recruitment of sufficient partners to meet anticipated demand or that those partners who are recruited can be made effective substitutes for internal professional services resources.

We derive a significant portion of our revenue from a relatively small number of customers, and our growth depends on our ability to retain existing customers and add new customers.

We derive a significant percentage of our revenue from a relatively small number of customers, and the loss of any one or more of those customers for any reason, including without limitation, early termination of our contract with them could decrease our revenue and harm our current and future results of operations. For fiscal 2014, our top ten customers accounted for 53.5% of our total revenue. For fiscal 2013, our top ten customers accounted for 68.4% of our total revenue, and two customers each accounted for at least 10% of our total revenue; BlackBerry accounted for 14.9% and Vodafone accounted for 12.1% of our total revenue. Although our largest customers may vary from period to period, we anticipate that we will continue to depend on revenue from a relatively small number of customers.

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We encounter long sales cycles, particularly with our larger customers, and seasonality in sales, which could have an adverse effect on the amount, timing and predictability of our revenue.

Our products have lengthy sales cycles, which typically extend from four to 12 months and may, in some instances, take longer than one year. Potential and existing customers, particularly larger enterprises, often commit significant resources to an evaluation of available solutions and services and require us to expend substantial time and resources in connection with our sales efforts. The length of our sales cycles also varies depending on the type of customer to which we are selling, the product being sold and customer requirements. We may incur substantial sales and marketing expenses and expend significant management effort during this time, regardless of whether we make a sale. Many of the risks relating to sales processes are beyond our control, including:

• Our customers’ budgetary and scheduling constraints;

• The timing of our customers’ budget cycles and approval processes;

• Our customers’ willingness to augment or replace their currently deployed software products; and

• General economic conditions.

As a result of the lengthy and uncertain sales cycles of our products and services, it is difficult for us to predict when customers may purchase products or services from us, thereby affecting when we can recognize the associated revenue, and our results of operations may vary significantly and may be adversely affected. The length of our sales cycle makes us susceptible to having pending transactions delayed or terminated by our customers if they decide to delay or withdraw funding for information technology, projects. Our customers may decide to delay or withdraw funding for various reasons, including global economic cycles and capital market fluctuations.

In addition, we may experience seasonality in the sales of our solutions. For instance, historically, the agreements we have signed in our fiscal first quarter have had an aggregate value less than that of the agreements signed in our preceding fiscal fourth quarter. Seasonal variations in our sales may lead to significant fluctuations in our cash flows and deferred revenue on a quarterly basis. If we fail to sign a significant customer agreement in any particular quarter, then our results of operations for such quarter and for subsequent quarters may be below the expectations of securities analysts or investors, which may result in a decline in our stock price.

Our quarterly results of operations may fluctuate. As a result, we may fail to meet or exceed the expectations of investors or securities analysts which could cause our stock price to decline.

Our quarterly revenue and results of operations may fluctuate as a result of a variety of factors, many of which are outside of our control. If our quarterly revenue or results of operations fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Fluctuations in our results of operations may be due to a number of factors, including, but not limited to, those listed below:

• Demand for and market acceptance of our products;

• Our ability to retain and increase sales to customers and attract new customers;

• The timing of product deployment which determines when we can recognize the associated revenue;

• The timing and success of introductions of new solutions or upgrades by us or our competitors;

• The strength of the economy;

• Changes in our pricing policies or those of our competitors;

• Competition, including entry into the industry by new competitors and new offerings by existing competitors;

• The impact of seasonality on our business;

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• The amount and timing of expenditures related to expanding our operations, research and development or introducing new solutions; and

• Changes in the payment terms for our solutions.

Due to the foregoing factors, and the other risks discussed in this report, you should not rely on quarter-to-quarter comparisons of our results of operations as an indication of our future performance.

We operate in an emerging and evolving market, which may make it difficult to evaluate our business and future prospects. If this market does not develop or develops more slowly than we expect, our revenue may decline or fail to grow, and we may incur additional operating losses.

The market for trading network solutions, including our integrated platform, is in an early stage of development, and it is uncertain how rapidly this market will develop, and even if it does develop, whether our software and solutions will achieve and sustain high levels of demand and market acceptance.

Some companies may be reluctant or unwilling to use our solutions for a number of reasons, including existing investments in demand and supply network management technology. For example, supply chain management functions traditionally have been performed using purchased or licensed hardware and software implemented by each company in the supply chain. Because this traditional approach often requires significant initial investments to purchase the necessary technology and to establish systems that comply with customers’ unique requirements, suppliers may be unwilling to abandon their current options for our integrated, multi-enterprise solution.

Other factors that may limit market acceptance of our solutions include:

• Our ability to maintain high levels of customer satisfaction;

• Our ability to maintain availability of service across all users of our products;

• The price, performance and availability of competing products; and

• Our ability to address confidentiality concerns about information stored outside of our customers’ controlled computing environments.

• Concerns about data protection and confidentiality of data stored in the United States, for customers with headquarters outside of the US.

If companies do not perceive or value the benefits of our solutions, or if companies are unwilling to accept our platform as an alternative to the traditional approach, the market for our products might not continue to develop or might develop more slowly than we expect, either of which would significantly adversely affect our revenue and growth prospects.

Downturns in general economic and market conditions and reductions in IT spending may reduce demand for our solutions, which could negatively affect our revenue, results of operations and cash flows.

Our revenue, results of operations and cash flows depend on the overall demand for our solutions. Concerns about the systemic impact of a potential widespread recession, energy costs, geopolitical issues, and the availability of credit have contributed to increased market volatility, decreased consumer confidence and diminished growth expectations in the U.S. economy and abroad. This in turn has resulted in reductions in IT spending by some of our customers.

Further worsening, broadening or protracted extension of the economic downturn could have a significant negative impact on our business, revenue, results of operations and cash flows. Prolonged economic slowdowns may result in customers requiring us to renegotiate existing contracts on less advantageous terms to us than those currently in place or defaulting on payments due on existing contracts.

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Furthermore, during weak economic times, there is an increased risk that one or more of our customers will file for bankruptcy protection, which may adversely affect our revenue, profitability and results of operations. If a customer files for bankruptcy, we may be required to forego collection of pre-petition amounts owed and to repay amounts remitted to us during the 90-day preference period preceding the filing, which may be significant due to extended payment terms for software contract fees, and significant billings for professional services on large projects. We also face risk from international customers that file for bankruptcy protection in foreign jurisdictions, in that the outcome of the application of foreign bankruptcy laws may be more difficult to predict. In addition, we may determine that the cost of pursuing any claim may outweigh the recovery potential of such claim.

If we are unable to develop new products and services, sell our solutions into new markets or further penetrate our existing markets, our revenue will not grow as expected.

Our ability to attract new customers and increase revenue from existing customers will depend in large part on our ability to enhance and improve our solutions, to introduce new products and services in a timely manner, to sell into new markets and to further penetrate our existing markets. The success of any enhancement or new product or service depends on several factors, including the timely completion, introduction and market acceptance of the enhancement or new product or service. Any new product or service we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve the broad market acceptance necessary to generate significant revenue. Any new markets into which we attempt to sell our solutions, including new vertical markets and new countries or regions, may not be receptive. If we are unable to successfully develop or acquire new products or services, enhance our existing products or services to meet customer requirements, sell products and services into new markets or sell our products and services to additional customers in our existing markets, our revenue will not grow as expected. Moreover, we are frequently required to enhance and update our products and services as a result of changing standards and technological developments, which makes it difficult to recover the cost of development and forces us to continually qualify new products with our customers.

If we do not maintain the compatibility of our solutions with third-party applications that our customers use in their business processes, demand for our solutions could decline.

Our solutions can be used alongside a wide range of other systems, such as enterprise software systems and business software applications used by our customers in their businesses. If we do not support the continued integration of our solutions with third-party applications, including through the provision of application programming interfaces that enable data to be transferred readily between our solutions and third-party applications, demand for our solutions could decline, and we could lose sales. We will also be required to make our solutions compatible with new or additional third-party applications that are introduced into the markets that we serve. We may not be successful in making our solutions compatible with these third-party applications, which could reduce demand for our solutions. In addition, prospective customers, especially large enterprise customers, may require heavily customized features and functions unique to their business processes. If prospective customers require customized features or functions that we do not offer, then the market for our solutions will be adversely affected.

Our inability to adapt to rapid technological change could impair our ability to remain competitive.

The industry in which we compete is characterized by rapid technological change, frequent introductions of new products and evolving industry standards. Our ability to attract new customers and increase revenue from customers will depend in significant part on our ability to anticipate industry standards and to continue to enhance existing solutions or introduce or acquire new solutions on a timely basis to keep pace with technological developments. The success of any enhancement or new solution depends on several factors, including the timely completion and market acceptance of the enhancement or new solution. Any new solution we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue. If any of our competitors implements new

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technologies before we are able to implement them, those competitors may be able to provide more effective solutions than ours at lower prices. Any delay or failure in the introduction of new or enhanced solutions could adversely affect our business, results of operations and financial condition.

Our solutions are complex and customers may experience difficulty in implementing or upgrading our products successfully or otherwise achieving the benefits attributable to our products.

Due to the scope and complexity of the solutions that we provide, our implementation cycle can be lengthy and unpredictable. Our products may require modification or customization and must integrate with many existing computer systems and software programs of our customers and their trading partners. This can be time-consuming and expensive for our customers and can result in delays in the implementation and deployment of our products. As a result, some customers have had, and may in the future have, difficulty implementing our products successfully or otherwise achieving the expected benefits of our products. Delayed or ineffective implementation or upgrades of our software may limit our future sales opportunities, impact revenue, delay deployment of security patches, result in customer dissatisfaction and harm our reputation.

The markets in which we participate are highly competitive, and our failure to compete successfully would make it difficult for us to add and retain customers and would reduce or impede the growth of our business.

The markets for supply chain management solutions are increasingly competitive and global. We expect competition to increase in the future both from existing competitors and new companies that may enter our markets. Increased competition could result in pricing pressure, reduced sales, lower margins or the failure of our solutions to achieve or maintain broad market acceptance. We currently face, or may face in the future, competition from:

• SaaS providers that deliver B2B information systems;

• Traditional on-premise software providers; and

• Managed service providers that combine traditional on-premise software with professional information technology services.

To remain competitive, we will need to invest continuously in software development, marketing, customer service and support and product delivery infrastructure. However, we cannot assure you that new or established competitors will not offer solutions that are superior to or lower in price than ours. We may not have sufficient resources to continue the investments in all areas of software development and marketing needed to maintain our competitive position. In addition, some of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than us, which may provide them with an advantage in developing, marketing or servicing new solutions. Increased competition could reduce our market share, revenue and operating margins, increase our operating costs and otherwise adversely affect our business.

If we are unable to manage our diverse and complex operations, our reputation in the market and our ability to generate revenue from new or existing customers may be adversely affected.

Because our operations are geographically diverse and complex, our personnel resources and infrastructure could become strained and our reputation in the market and our ability to successfully implement our business plan may be adversely affected. We have experienced a period of rapid growth in our headcount and operations. From February 28, 2013 to February 28, 2014, our employee headcount grew from 379 to 444. The growth in the size, complexity and diverse nature of our business and the expansion of our product lines and customer base have placed increased demands on our management and operations, and further growth, if any, may place additional strains on our resources in the future. Our ability to effectively compete and to manage our planned future growth will depend on, among other things, the following:

• Maintaining continuity in our senior management and key personnel;

• Increasing the productivity of our existing employees;

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• Attracting, retaining, training and motivating our employees, particularly our technical and management personnel;

• Deploying our solutions using third-party systems integrators, which will require changes to our applications, documentation and operational processes;

• Improving our operational, financial and management controls; and

• Improving our information reporting systems and procedures.

If we do not manage the size, complexity and diverse nature of our business effectively, we could experience delayed software releases and longer response times for assisting our customers with implementation of our products and services, and could lack adequate resources to support our customers on an ongoing basis, any of which could adversely affect our reputation in the market, our ability to successfully implement our business plan and our ability to generate revenue from new or existing customers.

If we fail to retain our key employees, our business would be harmed and we might not be able to implement our business plan successfully.

Given the complex nature of the technology on which our business is based and the speed with which such technology advances, our future success is dependent, in large part, upon our ability to attract and retain highly qualified managerial, technical and sales personnel. In particular, Mark E. Woodward, our Chief Executive Officer, is critical to the management of our business and operations. Competition for talented personnel is intense, and we cannot be certain that we can retain our managerial, technical and sales personnel or that we can attract, assimilate or retain such personnel in the future. Our inability to attract and retain such personnel could have an adverse effect on our business, results of operations and financial condition.

Our growth is dependent upon the continued development of our direct sales force.

We believe that our future growth will depend on the continued development of our direct sales force and their ability to obtain new customers, particularly large enterprise customers, and to manage our existing customer base. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in recruiting, training and retaining a sufficient number of direct sales personnel. New sales personnel require significant training and may, in some cases, take more than a year before becoming productive, if at all. If we are unable to hire and develop sufficient numbers of productive direct sales personnel, sales of our software and services will suffer and our growth will be impeded.

If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts, our results could be harmed.

Due to our evolving business model and the unpredictability of future general economic and financial market conditions, we may not be able to accurately forecast our rate of growth. We plan our expense levels and investment on estimates of future revenue and future anticipated rate of growth. We may not be able to adjust our spending quickly enough if the addition of new subscriptions or the renewal rate for existing subscriptions falls short of our expectations. As a result, we expect that our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis. We believe that period-to-period comparisons of our revenues, operating results and cash flows may not be meaningful and should not be relied upon as an indication of future performance.

Interruptions or delays in the services provided by third-party data centers and/or internet service providers could impair the delivery of our solutions and our business could suffer.

In North America, we host our solutions at Equinix co-location facilities in Sunnyvale and San Jose, California and a suburb of Chicago, Illinois. Exostar hosts our solutions for the aerospace and defense industry at

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third-party data centers and with third-party internet service providers outside of Washington, D.C. All of our solutions reside on hardware owned or leased and operated by us and Exostar at these locations. In China, we host our solutions at a data center in Shanghai operated by Shanghai Telecom. Our operations depend on the protection of the equipment and information we store in these third-party data centers and which third-party internet service providers transmit against damage or service interruptions that may be caused by fire, flood, severe storm, earthquake, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters, war, criminal act, military action, terrorist attack and other similar events beyond our control. A prolonged service disruption affecting our solutions for any of the foregoing reasons could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers from whom we receive recurring revenue or otherwise adversely affect our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers we use.

Our solutions are accessed by a large number of customers often at the same time. As we continue to expand the number of our customers and solutions available to our customers, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service. In addition, the failure of our third-party data centers or third-party internet service providers to meet our capacity requirements could result in interruptions or delays in access to our solutions or impede our ability to scale our operations. In the event that our data center or third-party internet service provider arrangements are terminated, or there is a lapse of service, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our solutions as well as delays and additional expense in arranging new facilities and services.

We may experience service failures or interruptions due to defects in the software, infrastructure, third-party components or processes that comprise our existing or new solutions, any of which could adversely affect our business.

Our products may contain undetected defects in the software, infrastructure, third-party components or processes that are part of the solutions we provide. If these defects lead to service failures after introduction of a solution or an upgrade to the solution, we could experience delays or lost revenue during the period required to correct the cause of the defects. We cannot be certain that defects will not be found in new solutions or upgraded solutions, resulting in loss of, or delay in, market acceptance, which could have an adverse effect on our business, results of operations and financial condition.

Because customers use our solutions for critical business processes, any defect in our solutions, any disruption to our solutions or any error in execution could cause recurring revenue customers to cancel their contracts with us, prevent potential customers from purchasing our solutions and harm our reputation. Although our contracts with our customers limit our liability to our customers for these defects, disruptions or errors, we nonetheless could be subject to litigation for actual or alleged losses to our customers’ businesses, which may require us to spend significant time and money in litigation or arbitration or to pay significant settlements or damages. We do not currently maintain any warranty reserves. Defending a lawsuit, regardless of its merit, could be costly and divert management’s attention and could cause our business to suffer.

The insurers under our existing liability insurance policy could deny coverage of a future claim that results from an error or defect in our technology or a resulting disruption in our solutions, or our existing liability insurance might not be adequate to cover all of the damages and other costs of such a claim. Moreover, we cannot assure you that our current liability insurance coverage will continue to be available to us on acceptable terms or at all. The successful assertion against us of one or more large claims that exceeds our insurance coverage, or the occurrence of changes in our liability insurance policy, including an increase in premiums or imposition of large deductible or co-insurance requirements, could have an adverse effect on our business, financial condition and results of operations. Even if we succeed in litigation with respect to a claim, we are likely to incur substantial costs and our management’s attention will be diverted from our operations.

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We may be required to defer recognition of some of our revenue, which may adversely affect our financial results in any given period.

We may be required to defer recognition of revenue for a significant period of time after entering into an agreement due to a variety of factors, including whether:

• The transaction involves both current on-demand software solutions and on-demand software solutions that are under development;

• The customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our solutions;

• The transaction involves extended payment terms;

• The transaction involves acceptance criteria or other terms that may delay revenue recognition; or

• The transaction involves performance milestones or payment terms that depend upon contingencies.

Because of these factors and other specific revenue recognition requirements under generally accepted accounting principles in the United States (“GAAP”), we must have very precise terms in our contracts in order to recognize revenue when we initially provide access to our software solutions or perform services. Although we strive to enter into agreements that meet the criteria under GAAP for current revenue recognition on delivered elements, our agreements are often subject to negotiation and revision based on the demands of our customers. The final terms of our agreements sometimes result in deferred revenue recognition well after the time of delivery, which may adversely affect our financial results in any given period. In addition, because of prevailing economic conditions, more customers may require extended payment terms, shorter term contracts or alternative licensing arrangements that could reduce the amount of revenue we recognize upon delivery of our solutions and could adversely affect our short-term profitability.

Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition. In some instances, we could reasonably use different estimates and assumptions, and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.

If we are unable to substantially utilize our net operating loss carryforward, our future cash tax liability may increase .

As of February 28, 2014, our net operating loss (“NOL”), carryforward amounts for U.S. federal income and state tax purposes were approximately $340.9 million and $69.2 million. Under Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders (generally 5% stockholders, applying certain look-through and aggregation rules) increases by more than 50% over such stockholders’ lowest percentage ownership during the testing period (generally three years). We believe that there was an ownership change in a prior year, which resulted in an annual NOL limitation. In addition, new issuances of our common stock, which is within our control, and purchases of our common stock in amounts greater than specified levels, which will be beyond our control, could create an additional limitation on our ability to utilize our NOLs for tax purposes in the future. Limitations imposed on our ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. Furthermore, we may not be able to generate sufficient taxable income to utilize our NOLs before they expire. If any of these events occur, we may not derive some or all of the benefits from our NOLs. In addition, at the state level there may be periods during which the use of NOLs is suspended or otherwise limited, which would accelerate or may permanently increase state taxes owed.

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If our goodwill or amortizable intangible assets become impaired we may be required to record a significant charge to earnings.

We acquire other companies and intangible assets and may not realize all the economic benefit from those acquisitions, which could result in an impairment of goodwill or intangibles. Under GAAP, we review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment at least annually. Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill or amortizable intangible assets may not be recoverable, include a decline in stock price and market capitalization, reduced future cash flow estimates, and slower growth rates in our industry. We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively impacting our results of operations.

A failure to protect the integrity and security of our customers’ information could expose us to litigation, materially damage our reputation and harm our business. Furthermore, the unanticipated costs of protecting against such a failure could adversely affect our results of operations.

Our business involves the collection and use of confidential information of our customers and their trading partners. We cannot assure you that our efforts to protect this confidential information will be successful. If any compromise of this information security were to occur, we could be subject to legal claims and government action, experience an adverse effect on our reputation and need to incur significant additional costs to protect against similar information security breaches in the future, each of which could adversely affect our financial condition, results of operations and growth prospects. In addition, because of the critical nature of data security, any perceived breach of our security measures could cause existing or potential customers not to use our solutions and could harm our reputation.

Evolving regulation of the Internet may increase our expenditures related to compliance efforts, which may adversely affect our financial condition.

As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. We are particularly sensitive to these risks because the Internet and cloud computing are critical components of our business model. For example, we believe that increased regulation is likely in the area of data privacy on the Internet, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for solutions accessed via the Internet and restricting our ability to store, process and share data with our clients via the Internet. In addition, taxation of services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.

If we fail to protect our intellectual property and proprietary rights adequately, our business could be adversely affected.

We believe that proprietary technology is essential to establishing and maintaining our leadership position. We seek to protect our intellectual property through trade secrets, copyrights, confidentiality, non-compete and nondisclosure agreements, patents, trademarks, domain names and other measures, some of which afford only limited protection. We also rely on patent, trademark, trade secret and copyright laws to protect our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology or to obtain and use information that we regard as proprietary. We cannot assure you that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar or superior technology or design around our intellectual property. In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the United States. Intellectual property protections may also be unavailable, limited or difficult to enforce in some countries, which

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could make it easier for competitors to capture market share. Our failure to adequately protect our intellectual property and proprietary rights could adversely affect our business, financial condition and results of operations.

An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses which could harm our business.

The industries in which we compete are characterized by the existence of a large number of patents, copyrights, trademarks and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. As we seek to extend our solutions, we could be constrained by the intellectual property rights of others. In addition, our customer contracts require us to indemnify our customers against certain liabilities they may incur as a result of our infringement of any third-party intellectual property.

We might not prevail in any intellectual property infringement litigation given the complex technical issues and inherent uncertainties in such litigation. Defending such claims, regardless of their merit, could be time-consuming and distracting to management, result in costly litigation or settlement, cause development delays or require us to enter into royalty or licensing agreements. Furthermore, if our solutions exceed the scope of in-bound licenses or violate any third-party proprietary rights, we could be required to withdraw those solutions from the market, re-develop those solutions or seek to obtain licenses from third parties, which might not be available on reasonable terms or at all. Any efforts to re-develop our solutions, obtain licenses from third parties on favorable terms or license a substitute technology might not be successful and, in any case, might substantially increase our costs and harm our business, financial condition and results of operations. If we were compelled to withdraw any of our solutions from the market, our business, financial condition and results of operations could be harmed.

The use of open source software in our products may expose us to additional risks and harm our intellectual property.

We incorporate open source software into our platform. Given the nature of open source software, third parties might assert copyright and other intellectual property infringement claims against us based on our use of certain open source software programs. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our solutions, to re-develop our solutions, to discontinue sales of our solutions or to release our proprietary software code under the terms of an open source license, any of which could adversely affect our business.

Some of our products use or incorporate software that is subject to one or more open source licenses. Open source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends to distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license terms.

While we monitor the use of all open source software in our products, processes and technology and try to ensure that no open source software is used in such a way as to require us to disclose the source code to the related product or solution when we do not wish to do so, such use may have inadvertently occurred in deploying our proprietary solutions. Additionally, if a third-party software provider has incorporated certain types of open source software into software we license from such third party for our products and solutions, we could, under certain circumstances, be required to disclose the source code to our products and solutions. This could harm our intellectual property position and have a material adverse effect on our business, results of operations and financial condition.

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Our strategy includes pursuing acquisitions and our potential inability to successfully integrate newly-acquired companies or businesses may adversely affect our financial results.

We believe part of our growth will be driven by acquisitions of other companies or their businesses. Any acquisitions we complete will give rise to risks, including:

• Incurring significantly higher than anticipated capital expenditures and operating expenses;

• Failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business;

• Failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our solutions;

• Disrupting our ongoing business;

• Incurring significant accounting charges;

• Dissipating our management resources;

• Failing to maintain uniform standards, controls and policies;

• Impairing relationships with employees and customers as a result of changes in management;

• Finding that the acquired company, asset or technology does not further our business strategy, that we overpaid for the company, asset or technology or that we may be required to write off acquired assets or investments partially or entirely;

• Not realizing the expected synergies of the transaction;

• Facing delays in customer purchases due to difficulty in retaining customers of acquired businesses;

• Exposure to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and

• An inability to generate sufficient revenue from acquisitions to offset the associated acquisition costs.

Fully integrating an acquired company or business into our operations may take a significant amount of time. We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with acquisitions. To the extent we do not successfully avoid or overcome the risks or problems related to any acquisitions, our results of operations and financial condition could be adversely affected. Acquisitions also could impact our financial position and capital needs, and could cause substantial fluctuations in our quarterly and annual results of operations. Acquisitions could include significant goodwill and intangible assets, which may result in future impairment charges that would reduce our stated earnings. We may incur significant costs in our efforts to engage in strategic transactions and these expenditures may not result in successful acquisitions.

Future acquisitions of technologies or companies, which are paid for partially or entirely through the issuance of stock or stock rights, could dilute the ownership of our existing stockholders.

We expect that the consideration we might pay for any future acquisitions of companies or technologies could include stock, rights to purchase stock, cash or some combination of the foregoing. In July 2013, we issued 451,593 shares of our common stock as partial consideration in connection with the acquisition of ICON. If we issue stock or rights to purchase stock in connection with future acquisitions, net income (loss) per share will be reduced and then-existing holders of our common stock may experience dilution.

Mergers or other strategic transactions involving our competitors could weaken our competitive position, which could harm our results of operations.

Our industry is highly fragmented, and we believe it is likely that some of our existing competitors will consolidate or will be acquired. In addition, some of our competitors may enter into new alliances with each

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other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could have a material adverse effect on our business, results of operations and financial condition.

We may not receive significant revenue as a result of our current research and development efforts.

We have made and expect to continue to make significant investments in research and development and related product opportunities. For the years ended February 28, 2014 and February 28, 2013, we spent $18.5 million and $15.0 million on research and development expenses. High levels of expenditures for research and development could adversely affect our results of operations if not offset by corresponding future revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, it is difficult to estimate when, if ever, we will receive significant revenue as a result of these investments.

We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our results of operations and our ability to attract and retain qualified executives and board members.

As a public company, we incur legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), as well as rules implemented by the Securities and Exchange Commission (“SEC”), The NASDAQ Stock Market (“NASDAQ”), and other applicable securities or exchange-related rules and regulations. In addition, our management team also has to adapt to the requirements of being a public company. We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, our results of operations could be adversely effected.

However, for as long as we remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” prior to such time if we have more than $1.0 billion in annual revenue, more than $700 million in market value of our common stock is held by non-affiliates or we issue more than $1.0 billion of non-convertible debt over a three-year period.

As a public company, we also expect that it may be more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

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We rely significantly on recurring revenue, which may decline or fail to be renewed, and our future results of operations could be harmed.

Our revenue from subscriptions to our software and software-related support services accounted for approximately 79.2% and 58.4% of our total revenue for the years ended February 28, 2014 and February 28, 2013. Revenue from our subscriptions is recognized over the contractual term of the license, which is typically three to five years, and is generally recurring in nature. Sales of new or recurring subscriptions and software-related support service contracts and renewals after expiration of the initial term may decline or fluctuate as a result of a number of factors, including end customers’ level of satisfaction with our software solutions, the prices of our software solutions, the prices of products and services offered by our competitors or reductions in our customers’ spending levels. A software industry-wide movement towards shorter contractual license terms led by other SaaS providers, which competitive pressures may compel us to follow, could lead to increased volatility and diminished visibility into future recurring revenue. If our sales of new or recurring subscriptions and software-related support service contracts decline, our revenue and revenue growth may decline, and our business will suffer.

Because we recognize revenue from subscriptions and support services over the term of the relevant service period, downturns or upturns in sales are not immediately fully reflected in our results of operations.

We recognize recurring subscriptions and software-related support services revenue monthly over the term of the relevant service period, which is typically three to five years. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from recurring subscriptions and software-related support service contracts entered into during previous quarters. Consequently, a decline in new or renewed recurring subscriptions and software-related support service contracts in any one quarter will not be fully reflected in revenue in that quarter, but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our recurring subscriptions and software-related support services are not reflected in full in our results of operations until future periods. Revenue from our recurring subscriptions and software-related support services also makes it difficult for us to rapidly increase our revenue through additional service sales in any period, as revenue from new and renewal software-related service contracts must be recognized over the applicable service period.

Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies in the future could reduce our ability to compete successfully and adversely affect our results of operations.

We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our security holders may experience significant dilution of their ownership interests and the value of shares of our common stock could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. If we need additional capital and cannot raise it on acceptable terms, if at all, we may not be able to, among other things:

• Develop and enhance our solutions;

• Continue to expand our technology development, sales and marketing organizations;

• Hire, train and retain employees;

• Respond to competitive pressures or unanticipated working capital requirements; or

• Pursue acquisition opportunities.

Our inability to do any of the foregoing could reduce our ability to compete successfully and adversely affect our results of operations.

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Because our long-term success depends, in part, on our ability to expand the sales of our solutions to customers located outside of the United States, our business will be susceptible to risks associated with international operations.

We have limited experience operating in foreign jurisdictions. Conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. Customers in countries outside of the United States accounted for 25.2% of our revenue for the fiscal year ended February 28, 2014 and 36.0% of our revenue for the fiscal year ended February 28, 2013. Our limited experience in operating our business outside of the United States increases the risk that our current and any future international expansion efforts will not be successful. Conducting international operations subjects us to new risks that, generally, we have not faced in the United States, including:

• Fluctuations in currency exchange rates;

• Unexpected changes in foreign regulatory requirements;

• Longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

• Difficulties in managing and staffing international operations, including differences in labor laws;

• Potentially adverse tax consequences, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;

• Localization of our solutions, including translation into foreign languages and associated expenses;

• The burdens of complying with a wide variety of foreign laws and different legal standards, including laws and regulations related to privacy and data security;

• Requirements for regional hosting of customer solutions and data, which may require additional capital expenditures necessary to set up new data centers;

• Increased financial accounting and reporting burdens and complexities;

• Political, social and economic instability abroad, terrorist attacks and security concerns in general; and

• Reduced or varied protection for intellectual property rights in some countries.

The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations generally. Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing, acquiring or integrating operations in other countries will produce desired levels of revenue or profitability.

From time to time, we may become defendants in legal proceedings as to which we are unable to assess our exposure and which could become significant liabilities in the event of an adverse judgment.

We may become defendants in legal proceedings from time to time. Companies in our industry have been subject to claims related to patent infringement and product liability, as well as contract and employment-related claims. We may not be able to accurately assess the risk related to these suits, and we may be unable to accurately assess our level of exposure.

We are required to comply with U.S. export control laws and regulations. Noncompliance with those laws and regulations could have a material adverse effect on our business.

Our solutions are subject to U.S. export controls and we incorporate encryption technology into certain of our solutions. These encrypted solutions and the underlying technology may be exported outside the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations, including the filing of an encryption registration. U.S. export control laws and

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economic sanctions prohibit the shipment of certain solutions and services to U.S. embargoed or sanctioned countries, governments and persons and complying with export control and sanctions regulations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Penalties for violations of the U.S. export control laws include fines of up to $250,000 or twice the value of the transaction, whichever is greater, per violation, the possible loss of export or import privileges and criminal action for knowing or willful violations.

Further, if our operating partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, become the subject of government investigations or penalties, and incur reputational harm.

In addition, various countries regulate the import of certain encryption technology, including import permitting and licensing requirements, and have enacted laws that could limit our ability to sell our solutions or could limit our customers’ ability to implement our solutions in those countries. Changes in our solutions or changes in export and import regulations may create delays in the introduction of our solutions in international markets, prevent our customers with international operations from deploying our solutions globally or, in some cases, prevent the export or import of our solutions to certain countries, governments or persons altogether. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our solutions by, or in our decreased ability to export or sell our solutions to, existing or potential customers with international operations. Any decreased use of our solutions or limitation on our ability to export or sell our solutions would likely adversely affect our business, financial condition and results of operations.

Our facilities in California are located near known earthquake faults, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facilities and equipment, which could negatively impact our operations.

Our facilities in the San Francisco Bay Area are located near known earthquake fault zones and are vulnerable to damage from earthquakes. We are also vulnerable to damage from other types of disasters, including fire, floods, power loss, communications failures and similar events. If any disaster were to occur, our ability to operate our business at our facilities would be seriously, or potentially completely, impaired. The insurance we maintain may not be adequate to cover our losses resulting from disasters or other business interruptions. Accordingly, an earthquake or other disaster could materially and adversely harm our ability to conduct business.

We may be subject to additional tax liabilities.

We are subject to income, sales, use, value added and other taxes in the United States and other countries in which we conduct business, which such laws and rates vary greatly by jurisdiction. Certain jurisdictions in which we do not collect sales, use, value added or other taxes on our sales may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future. Significant judgment is required in determining our worldwide provision for income taxes. These determinations are highly complex and require detailed analysis of the available information and applicable statutes and regulatory materials. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals. If we receive an adverse ruling as a result of an audit, or we unilaterally determine that we have misinterpreted provisions of the tax regulations to which we are subject, there could be a material effect on our tax provision, net income or cash flows in the period or periods for which that determination is made. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time.

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Risks Relating to Owning Our Common Stock

Our share price may be volatile.

The market price of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

• Actual or anticipated fluctuations in our financial condition and results of operations;

• Overall conditions in our industry and market;

• Addition or loss of significant customers;

• Changes in laws or regulations applicable to our products;

• Actual or anticipated changes in our growth rate relative to our competitors;

• Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

• Additions or departures of key personnel;

• Competition from existing products or new products that may emerge;

• Issuance of new or updated research or reports by securities analysts;

• Fluctuations in the valuation of companies perceived by investors to be comparable to us;

• Disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies;

• Sales of our common stock by us or our stockholders;

• Share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

• The expiration of contractual lock-up agreements with our executive officers, directors and stockholders; and

• General economic and market conditions.

Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common stock will depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Future sales of our common stock in the public market could cause our share price to fall.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise

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capital through the sale of additional equity securities. In addition, certain holders of our shares of common stock will be entitled to rights with respect to registration of such shares under the Securities Act pursuant to a registration rights agreement between such holders and us. If such holders, by exercising their registration rights, sell a large number of shares, the market price for our common stock could be adversely affected. If we file a registration statement for the purpose of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may be impaired.

All of the common stock sold in our IPO in July 2012 is freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act. All of the common stock sold in our secondary offering in January 2014 is freely tradable without restrictions or further registration under the Securities Act except for any shares held by our affiliates as defined in Rule 144 under the Securities Act. As of February 28, 2014, 6,447,117 shares of common stock is restricted as a result of lock-up agreements or other contractual restrictions that restrict transfers for at least 60 days after the date of the secondary offering.

We filed a registration statement on Form S-8 under the Securities Act to register shares for issuance under our 2003 Stock Plan and 2012 Equity Compensation Plan. Our 2012 Equity Compensation Plan provides for automatic increases in the shares reserved for issuance under the plan which could result in additional dilution to our stockholders. These shares can be freely sold in the public market upon issuance and vesting.

We may also issue shares of our common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

As a result of becoming a public company, we are obligated to develop and maintain a system of effective internal controls over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report we file with the SEC. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our auditors have issued an attestation report on effectiveness of our internal controls. However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions available to us through the JOBS Act.

We are in the very early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to remediate future material weaknesses, or to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our common stock.

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We are an “emerging growth company” and we cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual non-binding advisory vote on executive compensation and nonbinding stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may become more volatile.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Our directors, executive officers and principal stockholders have substantial control over us and could delay or prevent a change in corporate control.

As of February 28, 2014, our executive officers and directors, and entities that are affiliated with them, beneficially owned (as determined in accordance with the rules of the SEC) an aggregate of 22.4% of our outstanding common stock. As a result, these stockholders, acting together, have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, acting together, would have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

• Delaying, deferring or preventing a change in corporate control;

• Impeding a merger, consolidation, takeover or other business combination involving us; or

• Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

• Authorize our board of directors to issue, without further action by the stockholders up to 10,000,000 shares of undesignated preferred stock;

• Require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

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• Specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of the Board, the Chief Executive Officer or the President;

• Establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

• Provide that directors may be removed only for cause;

• Provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

• Establish that our board of directors is divided into three classes — Class I, Class II and Class III — with each class serving staggered terms; and

• Require a super-majority of votes to amend certain of the above-mentioned provisions.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control. These provisions may also frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock.

Any provision of our amended and restated certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

Our corporate headquarters are located in Foster City, California and consist of approximately 24,606 square feet of office space under a lease that expires in July 2018. Our headquarters accommodates our principal sales, marketing, professional services and administrative activities. We occupy space in Austin, Texas, consisting of 14,796 square feet under a lease that expires in December 2014 and space in Dallas, Texas, consisting of 12,211 square feet under a lease that expires in August 2014. We also occupy space in Kuala Lumpur, Malaysia consisting of 10,269 square feet under a lease that expires in May 2015, space in Karlsruhe, Germany consisting of 11,410 square feet under a lease that expires in November 2017 and space in Reading, United Kingdom, consisting of 3,300 square feet under a lease that expires in January 2015.

We use all of these facilities primarily for sales, professional services, customer support and software engineering. We also maintain sales offices in Taipei City, Taiwan, Paris, France, Dusseldorf, Germany, Helsinki, Finland, and Shanghai, China. We do not own any real property.

We believe that our current facilities are suitable and adequate to meet our current needs and that suitable additional or substitute space will be available as needed in the future to accommodate our operations.

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ITEM 3. LEGAL PROCEEDINGS

We may be subject from time to time to various legal proceedings and claims which arise in the ordinary course of our business. Although the outcome of these and other claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, cash flows or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Securities

Our common stock has been listed on the NASDAQ Global Market under the symbol “EOPN” since July 26, 2012. Prior to that date, there was no public trading market for our common stock. The following table sets forth for the periods indicated the high and low sales prices per share of our common stock as reported on the NASDAQ Global Market:

	High		Low
Year Ended February 28, 2013:
Second Quarter (from July 26, 2012 through August 31, 2012)	$	13.60	$	11.90
Third Quarter	$	17.82	$	12.85
Fourth Quarter	$	20.24	$	13.18
Year Ended February 28, 2014:
First Quarter	$	22.00	$	12.27
Second Quarter	$	21.15	$	13.91
Third Quarter	$	26.00	$	18.54
Fourth Quarter	$	29.82	$	19.94

On May 1, 2014, the last reported sale price of our common stock on the NASDAQ Global Market was $17.51 per share.

As of February 28, 2014, we had 223 holders of record of our common stock. The actual number of stockholders is greater than these numbers of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

Issuer Purchases of Equity Securities

There were no repurchases of our common stock in fiscal 2014.

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Performance Graph

This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the company under the Securities Act of 1933, as amended (“Securities Act”) or the Exchange Act.

The following graph shows a comparison from July 26, 2012 (the date our common stock commenced trading on the NASDAQ) through February 28, 2014 of the cumulative total return for our common stock, the Nasdaq Composite Index (COMP) and the Nasdaq Internet Index (QNET), assuming an initial investment of $100. Such returns are based on historical results and are not intended to suggest future performance. Data for the NASDAQ Composite Index and the Nasdaq Internet Index assume reinvestment of dividends, if any.

	June 26, 2012		August 31, 2012		November 30, 2012		February 28, 2013		May 31, 2013		August 30, 2013		November 29, 2013		February 28, 2014
E2open, Inc.	$	100	$	94	$	104	$	145	$	107	$	149	$	164	$	204
NASDAQ Composite	$	100	$	106	$	104	$	109	$	119	$	124	$	140	$	149
NASDAQ Internet	$	100	$	106	$	106	$	118	$	129	$	148	$	172	$	194

Unregistered Sales of Equity Securities and Use of Proceeds

On July 30, 2013, we issued 451,593 shares of common stock in connection with the acquisition of ICON, in a private transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) and/or Regulation S under the Securities Act. See Note 5, “Acquisition,” of Notes to Consolidated Financial Statements for further details on the transaction.

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ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results to be expected for any future period and the results for any interim period are not necessarily indicative of the results to be expected in the future. We have derived the selected consolidated statements of operations data for the fiscal years ended February 28, 2014, February 28, 2013 and February 29, 2012 and selected consolidated balance sheet data as of February 28, 2014 and February 28, 2013 from our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. We have derived the statements of operations data for the fiscal year ended February 28, 2011 and 2010 and the balance sheet data as of February 28, 2010 from our audited consolidated financial statements not included in this Annual Report on Form 10-K.

	Year Ended February 28 or 29,
	2014			2013			2012			2011			2010
	(In thousands, except per share, users and trading partners data)
Consolidated Statements of Operations Data
Revenue
Subscriptions and support	$	56,438		$	43,793		$	35,816		$	39,419		$	29,976
Professional services and other		14,803			31,145			23,871			16,104			14,401
Total revenue		71,241			74,938			59,687			55,523			44,377
Cost of revenue
Subscriptions and support		10,981			8,275			7,514			7,531			9,269
Professional services and other		16,996			15,037			14,116			11,774			11,493
Amortization of acquired intangibles		816			—			—			—			—
Total cost of revenue		28,793			23,312			21,630			19,305			20,762
Gross profit
Subscriptions and support		44,641			35,518			28,302			31,888			20,707
Professional services and other (4)		(2,193	)		16,108			9,755			4,330			2,908
Total gross profit		42,448			51,626			38,057			36,218			23,615
Operating expenses:
Research and development		18,491			14,999			13,240			11,463			13,077
Sales and marketing		36,238			28,222			18,590			12,756			11,421
General and administrative		10,660			8,413			5,963			5,064			4,754
Acquisition-related expenses (5)		1,182			—			—			—			—
Amortization of acquired intangibles		688			—			—			—			—
Total operating expenses		67,259			51,634			37,793			29,283			29,252
Income (loss) from operations		(24,811	)		(8	)		264			6,935			(5,637	)
Interest and other expense, net		(762	)		(437	)		(411	)		(259	)		(532	)
Income (loss) before income taxes		(25,573	)		(445	)		(147	)		6,676			(6,169	)
Benefit from (provision for) income taxes		501			(264	)		(78	)		(33	)		(349	)
Net income (loss)		(25,072	)		(709	)		(225	)		6,643			(6,518	)
Undistributed earnings allocated to preferred stockholders		—			—			—			(6,643	)		—
Net loss attributable to common stockholders:	$	(25,072	)	$	(709	)	$	(225	)	$	—		$	(6,518	)
Net loss per share attributable to common stockholders
Basic and diluted	$	(0.95	)	$	(0.04	)	$	(0.04	)	$	—		$	(1.55	)
Weighted average shares used to compute net loss per share attributable to common stockholders:
Basic and diluted		26,415			17,490			5,918			5,788			4,210
Other Financial and Operational Data:
Adjusted EBITDA (1)	$	(14,585	)	$	3,853		$	2,517		$	9,371		$	(2,869	)
Free cash flow (2)	$	(10,835	)	$	(2,095	)	$	(2,495	)	$	(697	)	$	(5,325	)
Number of unique registered trading partners (3)		38,548			35,302			30,772			26,440			22,529
Number of unique registered users (3)		125,960			108,846			88,012			73,377			62,528

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(1) We define Adjusted EBITDA as net income (loss) adjusted for interest and other income (expense), net, benefit from (provision for) income taxes, depreciation and amortization, stock-based compensation expense, and acquisition-related expenses. See “Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).

(2) We define free cash flow as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses. See “Free Cash Flow” below for more information and for a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP.

(3) We define unique registered trading partners and unique registered users as entities and individuals, respectively, that are connected to our network as of the balance sheet dates. We view the number of unique registered trading partners and unique registered users as key indicators of the reach of our network and the value our enterprise customers are deriving from out solutions.

(4) See Gross Profit and Gross Margin discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.

(5) See Acquisition-related expenses discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.

Stock-based compensation included in the consolidated statements of operations data above was as follows:

	Year Ended February 28 or 29,
	2014		2013		2012		2011		2010
	(Dollars in thousands)
Cost of revenue	$	1,641	$	621	$	203	$	223	$	106
Research and development		460		184		84		108		82
Sales and marketing		2,035		749		259		154		155
General and administrative		1,375		691		181		92		102
Total stock-based compensation	$	5,511	$	2,245	$	727	$	577	$	445

The following table sets forth our selected consolidated balance sheet data as of the dates presented:

	As of February 28 or 29,
	2014		2013		2012			2011			2010
	(Dollars in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	42,723	$	20,262	$	10,219		$	10,060		$	9,530
Investments in debt securities		22,915		26,981		—			—			—
Property and equipment, net		3,431		2,438		2,249			1,889			2,720
Working capital, excluding deferred revenue		62,638		46,815		10,069			10,417			7,808
Total assets		130,711		73,468		32,693			26,418			24,474
Non-current portion of notes payable and capital lease obligations		2,599		562		668			1,667			166
Convertible preferred stock		—		—		83,491			83,346			83,346
Total stockholders’ equity (deficit)		59,824		19,093		(33,204	)		(34,027	)		(41,697	)

Key Financial Performance Metrics

We monitor the key financial metrics set forth below as well as revenue, gross profit, gross margin, cash and cash equivalents and investments and available debt capacity, which are discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

Adjusted EBITDA

We have included Adjusted EBITDA in this report because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans.

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Adjusted EBITDA is defined as net income (loss) adjusted for interest and other income (expense), net, benefit from (provision for) income taxes, depreciation and amortization, stock-based compensation expense, and acquisition-related expenses. Management believes that the use of Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of results of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Management believes that it is useful to exclude certain non-cash charges, such as depreciation and amortization, and stock-based compensation, and non-core operational charges, such as acquisition-related expenses, interest and other expense, net from Adjusted EBITDA because (1) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (2) such expenses can vary significantly between periods as a result of the timing and pricing of new stock-based awards, acquisitions or restructurings, as the case may be.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;

• Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect the future need to augment or replace such assets; and

• Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results. The following table presents a reconciliation of Adjusted EBITDA for each of the periods indicated:

	Year Ended February 28 or 29,
	2014			2013			2012			2011		2010
	(Dollars in thousands)
Reconciliation of Adjusted EBITDA:
Net income (loss)	$	(25,072	)	$	(709	)	$	(225	)	$	6,643	$	(6,518	)
Interest and other expense, net		762			437			411			259		532
Provision for (benefit from) income taxes		(501	)		264			78			33		349
Depreciation and amortization		3,533			1,616			1,526			1,859		2,323
Stock-based compensation		5,511			2,245			727			577		445
Acquisition-related expenses		1,182			—			—			—		—
Adjusted EBITDA	$	(14,585	)	$	3,853		$	2,517		$	9,371	$	(2,869	)

Free Cash Flow

Free cash flow is a key measure used in our internal operating reports and allows us to manage the cash available to fund our debt obligations and potential strategic initiatives. Management believes that free cash flow is useful to investors as a supplemental measure to evaluate our business over time.

Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses. Capital expenditures consist of purchases of property,

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equipment and software. Management believes that the presentation of free cash flow provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operating performance and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Free cash flow should not be considered a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do. Management compensates for the inherent limitations associated with measuring free cash flow through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of free cash flow to the most directly comparable GAAP measure, net cash provided by (used in) operating activities. A reconciliation of net cash provided by (used in) operating activities to free cash flow is presented below:

	Year Ended February 28 or 29,
	2014			2013			2012			2011			2010
	(Dollars in thousands)
Free Cash Flow Data:
Net cash provided by (used in) operating activities	$	(11,688	)	$	(957	)	$	(826	)	$	88		$	(4,401	)
Capital expenditures		(213	)		(1,138	)		(1,669	)		(785	)		(924	)
Acquisition-related expenses		1,066			—			—			—			—
Free cash flow	$	(10,835	)	$	(2,095	)	$	(2,495	)	$	(697	)	$	(5,325	)

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes that are included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report on Form 10-K. Our fiscal year end is the last day of February. We refer to our fiscal years ended February 28, 2014, February 28, 2013 and February 29, 2012 as fiscal 2014, fiscal 2013 and fiscal 2012.

Overview

We are a leading provider of cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to manage demand they cannot predict with supply they do not control. Our software applications allow network participants to input, access and share data and execute business processes across internal operating units and external entities in a secure, real-time and cost-effective manner. We refer to the combination of our software applications delivered on our cloud-based platform, the content contributed by our network participants and our enabling services as the E2open Business Network. The E2open Business Network supports key operational business processes of our customers and their trading partners, including supply chain management, procurement, sales and finance functions. These functions enable our customers to share product information, forecasts, inventory positions, sales orders, purchase orders, manufacturing work orders, quality and environmental data, shipments, invoices and payments with their trading partners.

The accelerating trends of supply chain globalization and outsourced manufacturing and distribution have combined to increase complexity and risk for brand owners while decreasing visibility into their expanding and evolving supply chains and distribution networks. These trends have created a fundamental shift in the way companies plan, source and distribute goods and services. They have led to an ever more complex product and service delivery paradigm which increasingly relies on specialized, globally distributed trading partners to reduce costs.

As trading networks become more complex, companies are increasingly demanding integrated solutions that facilitate not only collaborative inventory management, but also the demand and supply forecasts, procurement systems, order management and analytics required to efficiently coordinate a company’s entire business ecosystem. We believe a significant opportunity exists to help companies improve their competitive advantage by delivering the visibility and control once characteristic of vertically integrated companies while retaining the advantages of outsourcing. The ability to navigate modern supply chain complexities and to resolve problems in a timely and collaborative manner, combined with enhanced knowledge of end customer demand, is critical to enabling businesses to better match supply and demand.

On July 30, 2013, we acquired ICON-SCM AG (“ICON”), a market leader in supply chain planning and collaboration, in a transaction valued at $26.6 million in total consideration. We acquired assets of $16.9 million, including $12.9 million of intangible assets, and assumed $12.8 million of liabilities. We recorded goodwill of $22.6 million. The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with our Business Network, we expand our market opportunity and solution portfolio, accelerate our product roadmap, and extend our position as the leader in the collaborative planning and execution space. As of the date of acquisition, the identifiable intangibles comprise developed technology valued at $7.0 million and customer relationships valued at $5.9 million.

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Our agreements with customers are typically three to five years in length with billings in advance for annual use of our software solutions. The annual contract value for each customer agreement is largely related to the size of the customer, the number of solutions the customer has purchased, the number of the customer’s unique registered users, and the maturity of our relationship with the customer. Average annual contract value can therefore fluctuate period to period depending upon the size of new customers and the pace at which we upsell additional solutions and services to existing customers. Additionally, these new and upsell customer agreements can create significant variability in the aggregate annual contract value of agreements signed in any given fiscal quarter.

As of February 28, 2014, we had 331 customers, of which 106 are what we refer to as Enterprise Customers who purchase both on-demand software solutions and network connectivity solutions. The remaining 225 customers purchase our network connectivity solutions directly. For the year ended February 28, 2014, Enterprise Customers represented 99.5% of total revenue. During the year ended February 28, 2014, we retained 97.4% of our Enterprise Customers and the total dollars billed to these customers was over 100% of the dollars billed to the same customers for the prior year. This reflects our ability to both retain and increase the revenue generated from our existing customers. We believe we have yet to significantly penetrate our customer base and have a significant opportunity to upsell additional solutions to our existing customers. The total number of Enterprise Customers was 56 as of February 29, 2012 and increased 35.7% to 76 as of February 28, 2013 and increased 39.5% to 106 as of February 28, 2014. Our customers represent a wide range of industries and include many of the Fortune 500, among them six out of the top ten supply chains in the world according to Gartner. The E2open Business Network is a community comprising our customers, approximately 38,500 unique registered trading partners and approximately 126,000 unique registered users.

On January 24, 2014, we sold 4,660,557 shares of common stock to the public (inclusive of 2,553,519 shares of common stock sold by selling stockholders). The public offering price of the shares sold in the offering was $25.0 per share. After deducting underwriting discounts and commissions and offering expenses paid by us, the aggregate net proceeds received by us totaled approximately $49.2 million.

We are headquartered in Foster City, California. We continue to expand our operations internationally. We currently generate a portion of our revenue outside the United States, including through our offices in the United Kingdom, Germany, China, France, Finland, Malaysia and Taiwan. For fiscal 2014, fiscal 2013 and fiscal 2012, the percentage of our revenue generated from customers outside the United States was 25.2%, 36.0% and 38.2%. For fiscal 2014, revenue from customers headquartered in the United States grew faster than revenue generated from international customers. As part of our growth strategy, we expect the percentage of our revenue generated outside of the United States to increase as we invest in and enter new and emerging markets. In fiscal 2011, we grew our sales team in Europe. In fiscal 2012, we opened an office and established a direct sales force and a sales, hosting and distribution alliance with a local partner in China. In fiscal 2013, we opened offices in France and Scandinavia. In fiscal 2014, we acquired ICON, and continued to hire sales personnel in the United States, Europe and China. Our financial objective is to create sustainable revenue, earnings and cash flow growth over the long term. Consistent with this objective, we intend to continue to invest in the development of our solutions and network. We expect to continue the aggressive expansion of our field sales organization and alliances to market our solutions both in the United States and internationally. We intend to continue making focused investments to upgrade our network infrastructure in order to improve our ability to profitably scale the business. We intend to further enable partners to deploy E2open solutions. This will allow E2open to grow deployment service capabilities for customers while maintaining focus as a cloud-based software products company and may mitigate potential constraints on company growth caused by challenges in scaling our own professional services organization. We may also evaluate acquisitions to further augment our strategies and objectives and will base our evaluation on a number of factors which may include strategic fit, stage of company, price, geography and industry.

We face challenges and risks related to the growth of our business, similar to other software companies, including the general economic environment, aggressive competition and prospective customers electing to

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postpone purchase decisions or maintain the status quo. We also face challenges and risks that may be unique to our own growth initiatives. We mitigate those risks, in part, by creating a balanced portfolio of growth initiatives while managing such risks to the best of our ability based on our prior experience and operating history. For example, one of our strategies relies upon our entrance into new vertical markets. Through our experience of entering into new markets, such as the Telecommunications, Technology and Consumer Products sectors, we believe we are better prepared to enter into adjacent markets. Another strategy involves expanding our target market to include mid-market customers. We believe our understanding of the complexities surrounding our existing customers has prepared us for evaluating and transitioning our solutions to be applicable to mid-market customers. Historically, we have collaborated, and will continue to interact, with our existing customers to define our product roadmap and specific functionalities. Many of our products resulted from such collaboration. For a more detailed analysis of the risks we face, see “Risk Factors.”

Sources of Revenue

We generate our revenue primarily from selling access to our cloud-based platform of on-demand software solutions, which we refer to as subscriptions and support, through our field sales organization and alliance partners. We also generate revenue from professional services by helping our customers deploy our software applications. Our customer contracts typically have terms of three to five years in length and we invoice our customers for subscriptions and support in advance for annual use of our software solutions.

	Year Ended February 28 or 29,
	2014			2013			2012
	(Dollars in thousands)
Revenue by type:
Subscriptions and support	$	56,438		$	43,793		$	35,816
Professional services and other		14,803			31,145			23,871
Total	$	71,241		$	74,938		$	59,687
Percentage of revenue by type:
Subscriptions and support		79.2	%		58.4	%		60.0	%
Professional services and other		20.8			41.6			40.0
Total		100.0	%		100.0	%		100.0	%

Subscriptions and Support. We offer on-demand software solutions, which enable our customers to have constant access to our solutions without the need to manage and support the software and associated hardware themselves. We house the hardware and software in third-party facilities, and provide our customers with access to the software applications, along with data security and storage, backup, and recovery services. We invoice our customers for subscriptions and support in advance for annual use of our software solutions.

Professional Services and Other. Professional services and other revenue is derived primarily from fees for enabling services, such as solution consulting, solution deployment and B2B on-boarding, that help our customers deploy our solutions. These services are sold in conjunction with the sale of our on-demand software solutions or on a standalone basis. We provide professional services both on a fixed-fee and a time-and-materials basis, and invoice our customers in advance, monthly, or upon reaching project milestones.

Our future revenue growth will depend on our ability to increase sales of our existing and new on-demand software solutions and services to new and existing customers. Our revenue generally fluctuates, and we expect it to continue to fluctuate, between periods due primarily to timing of sales of our software solutions, revenue recognition requirements and seasonality, among other factors. As a result, transactions that are expected to be recognized in one period may be recognized in a subsequent period, which may materially affect our financial performance in a reporting period.

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Key Operating Performance Measures

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Bookings, Billings and Backlog. We generally recognize subscription and support revenue from our customer agreements over the terms of those agreements. For this reason, a significant portion of our revenue in any period will be from customer agreements signed in prior periods rather than new business activity signed during such period. In order to assess our business performance with metrics that more fully reflect current period business activity, we track bookings, billings and backlog. Bookings represent the full value of customer orders or contracts signed during a reporting period. The value of our bookings is impacted by new contracts, renewals, amendments and terminations. New and upsell bookings represent orders from new customers and add-on sales to existing customers. Renewal bookings represent the extension of the term of a contract with an existing customer. Billings represent invoices issued to customers during the period. Backlog represents the cumulative value of bookings existing at the end of the period less the cumulative amount billed to customers. Due to the seasonality of our sales, bookings and backlog fluctuate from quarter to quarter throughout the fiscal year. Total bookings for fiscal 2014 were $98.2 million compared to $125.1 million for fiscal 2013. New and upsell bookings were up 16.8% to $82.1 million for fiscal 2014 from $70.3 million for fiscal 2013. New and upsell subscriptions and support bookings were up 79.0% to $70.8 million for fiscal 2014 from $39.6 million for fiscal 2013.

Number of Unique Registered Trading Partners. We define the number of unique registered trading partners as the number of distinct trading partner entities currently connected to the E2open Business Network as of the balance sheet date. We believe the number of unique registered trading partners is a key indicator of the growth of our network and both our and our customers’ ability to receive the benefits of the network effects resulting from such growth. Growth in the number of unique registered trading partners depends, in part, on our ability to successfully develop and market our solutions to our existing customers and companies that have not yet become part of our network. In addition to the growth in number of these entities, we view a large, existing network as providing greater incentive and ease for new customers seeking to join if they share existing trading partners already operating on our system.

The number of unique registered trading partners in the E2open Business Network increased to 38,548 as of February 28, 2014 from 35,302 as of February 28, 2013, or by 9.2%. While growth in the number of unique registered trading partners is an important indicator of expected revenue growth, it also informs our management of areas of our business that will require further investment to support such growth.

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Number of Unique Registered Users . We define the number of unique registered users as individuals within our customers’ organizations and their trading partners who are currently authorized to use and access our software applications as of a balance sheet date. We view unique registered users as a key indicator of growth and whether we are providing our customers with useful tools and applications, thereby increasing user engagement. Growth in unique registered users will be driven by our business expansion, growth in the number of unique registered trading partners and improvements to features and products available to our customers. The number of unique registered users increased to 125,960 as of February 28, 2014 from 108,846 as of February 28, 2013, or by 15.7%.

Key Financial Performance Measures

We monitor the key financial metrics set forth below as well as cash and cash equivalents and available debt capacity, which are discussed in “Liquidity and Capital Resources,” to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

	Year Ended February 28 or 29,
	2014			2013			2012
	(Dollars in thousands)
Revenue	$	71,241		$	74,938		$	59,687
Gross profit	$	42,448		$	51,626		$	38,057
Gross margin		59.6	%		68.9	%		63.8	%
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Adjusted EBITDA (1)	$	(14,585	)	$	3,853		$	2,517
Operating cash flow	$	(11,688	)	$	(957	)	$	(826	)
Free cash flow (2)	$	(10,835	)	$	(2,095	)	$	(2,495	)

(1) We define Adjusted EBITDA as net income (loss) adjusted for interest and other income (expense), net, benefit from (provision for) income taxes, depreciation and amortization, stock-based compensation expense, and acquisition-related expenses. See “Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).

(2) Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses. See “Free Cash Flow” below for more information and for a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Gross Profit and Gross Margin. Gross profit and gross margin have been and will continue to be affected by a variety of factors, including the average sales price of our products, the mix of solutions sold, the mix of revenue between subscriptions and support and professional services, and our level of investment in operating infrastructure. Our gross profit and gross margin were $42.4 million, or 59.6%, for fiscal 2014, $51.6 million, or 68.9%, for fiscal 2013 and, $38.1 million, or 63.8%, for fiscal 2012. We expected gross profit and gross margin to decline for fiscal 2014 compared to fiscal 2013 as we invested in the enablement of partners to deploy our solutions.

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Gross margin on subscriptions and support revenue and professional services revenue was 79.1% and (14.8)% for fiscal 2014. Gross margin on subscriptions and support revenue and professional services revenue was 81.1% and 51.7% for fiscal 2013. Gross margin on subscriptions and support revenue and professional services revenue was 79.0% and 40.9% for fiscal 2012.

An increase in the proportion of our total revenue generated by sales of subscriptions and support for our on-demand software applications would increase our overall margins, due to the higher margins on subscriptions and support compared to professional services. Our gross margin may also fluctuate due to the timing of revenue recognition for our on-demand solutions and services, since our cost of revenue is recognized as incurred whereas revenue on certain arrangements with customers is recognized over the contract term. Additionally, while we invest in the growth of our deployment service capabilities through partner enablement, our professional services revenues and margins may decrease.

Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) adjusted for interest and other income (expense), net, benefit from or provision for income taxes, depreciation and amortization, stock-based compensation expense, and acquisition-related expenses. Management believes that the use of Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their reported GAAP results.

Management believes that it is useful to exclude certain non-cash charges, such as depreciation and amortization and stock-based compensation, and non-core operational charges, such as interest and other income (expense), net and acquisition-related expenses from Adjusted EBITDA because (1) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (2) such expenses can vary significantly between periods as a result of the timing and pricing of new stock-based awards, acquisitions or restructurings, as the case may be.

Our Adjusted EBITDA was $(14.6) million for fiscal 2014 compared to $3.9 million for fiscal 2013 and $2.5 million for fiscal 2012. The fluctuation in Adjusted EBITDA resulted primarily from our continued investment in research and development and sales and marketing, fluctuations in revenue as described in the Results of Operations section, and executing our strategy to grow deployment service capabilities through partner enablement.

The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:

	Year Ended February 28 or 29,
	2014			2013			2012
	(Dollars in thousands)
Reconciliation of Adjusted EBITDA:
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Interest and other expense, net		762			437			411
Provision for (benefit from) income taxes		(501	)		264			78
Depreciation and amortization		3,533			1,616			1,526
Stock-based compensation		5,511			2,245			727
Acquisition-related expenses		1,182			—			—
Adjusted EBITDA	$	(14,585	)	$	3,853		$	2,517

Free Cash Flow. Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses. Capital expenditures consist of purchases of property, equipment and software. Acquisition-related expenses consist of third-party accounting and legal

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services, travel expenses and other personnel-related expenses incurred solely to prepare for and execute an acquisition. The following table details our calculation (and reconciliation to net cash provided by (used in) operating activities) of free cash flow. Free cash flow is a key measure used in our internal operating reports and allows us to manage the cash available to fund our debt obligations and potential strategic initiatives. Management believes that free cash flow is useful to investors as a supplemental measure to evaluate our business over time. Further, the presentation of free cash flow provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Our free cash flow was $(10.8) million for fiscal 2014, compared to $(2.1) million for fiscal 2013. The decrease in free cash flow was due primarily to increased investment in research and development, sales and marketing and deployment capacity. This is consistent with our strategy to expand our product offerings and customer base to help drive future revenue growth. Our free cash flow for fiscal 2013 was $(2.1) million compared to $(2.5) million for fiscal 2012 due to increased sales, improved management of our spending and working capital management.

	Year Ended February 28 or 29,
	2014			2013			2012
	(Dollars in thousands)
Free Cash Flow Data:
Net cash used operating activities	$	(11,688	)	$	(957	)	$	(826	)
Capital expenditures		(213	)		(1,138	)		(1,669	)
Acquisition-related expenses		1,066			—			—
Free cash flow	$	(10,835	)	$	(2,095	)	$	(2,495	)

We expect to continue to incur negative free cash flow for fiscal 2015 as we continue to invest in the development and implementation of new solutions and software applications, expand our sales and marketing resources in order to further penetrate our market both in the United States and internationally, and invest in the enablement of partners to deploy and sell our solutions.

Costs and Expenses

Cost of Revenue

Cost of Subscriptions and Support Revenue

Cost of subscriptions and support revenue consists of costs related to third-party hosting of our equipment, software license fees, amortization of acquired developed technology, salaries, benefits and other personnel-related expenses included in our operations and customer support departments, as well as an allocation of facilities, information technology and overhead costs. We expect the absolute cost of revenue to increase as we continue to invest in our business.

Cost of Professional Services and Other Revenue

Cost of professional services and other revenue consists of costs related to delivery of our software solutions, software license fees, salaries, benefits and other personnel-related expenses included in our professional services department, as well as an allocation of facilities, information technology and overhead costs. The cost associated with providing professional services is significantly higher as a percentage of professional services and other revenue than the cost associated with delivering our on-demand software applications due to the labor-intensive nature of providing professional services. We expect the absolute cost of professional services and other revenue to increase as we continue to invest in our business.

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Operating Expenses

Operating expenses consist of research and development, sales and marketing, general and administrative, acquisition-related expenses and amortization of acquired intangibles.

Research and Development

Research and development expense consists of salaries, benefits and other personnel-related expenses, software development tools, as well as an allocation of facilities, information technology and overhead costs. We expect to continue to invest in research and development to enhance and expand our existing solutions and develop new solutions and tools for improved deployment and customer support and, consequently, we expect research and development expense to increase in absolute dollars in future periods.

Sales and Marketing

Sales and marketing expense consists of salaries, benefits and other personnel-related expenses, including sales commissions, advertising and marketing materials, trade shows and other marketing events, travel and entertainment expenses, as well as an allocation of facilities, information technology and overhead costs. We intend to continue to invest in sales and marketing to pursue new customers and expand relationships with existing customers and to develop indirect sales channels. Accordingly, we expect sales and marketing expense to increase in absolute dollars in future periods.

General and Administrative

General and administrative expense consists of salaries, benefits and other personnel-related expenses for our finance, accounting, legal, and human resources departments, third-party professional fees, communication expenses, other administrative expenses, as well as an allocation of facilities, information technology and overhead costs. We expect that the costs of being a public company, including the costs of compliance with the Sarbanes-Oxley Act of 2002 and other regulations governing public companies, increased directors and officers insurance, and professional and other services, will increase our general and administrative expense in absolute dollars in future periods.

Acquisition-related expenses

Acquisition-related expenses consist of third-party accounting and legal services, travel expenses and other personnel-related expenses incurred solely to prepare for and execute an acquisition.

Amortization of acquired intangibles

Amortization of acquired intangibles consists of amortization of acquired customer relationships.

Interest and Other Expense, Net

Interest and other income (expense), net, consists primarily of interest income on our cash and cash equivalents, and investments, interest expense on our credit facilities, notes payable and capital leases, financing fees, and foreign exchange currency transaction and translation gains and losses.

Benefit from (Provision for) Income Taxes

We are subject to income taxes in the United States as well as other jurisdictions or countries in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax. Our effective tax rates differ from the statutory rate due primarily to valuation allowances on our deferred taxes, state taxes, foreign taxes, research and development tax credits and tax contingencies.

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Results of Operations

Fiscal Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Revenue, Cost of Revenue, Gross Profit and Gross Margin

	Year Ended February 28 or 29,									2013 to 2014 Change						2012 to 2013 Change
	2014			2013			2012			$			%			$		%
	(Dollars in thousands)
Revenue
Subscriptions and support	$	56,438		$	43,793		$	35,816		$	12,645			28.9	%	$	7,977		22.3	%
Professional services and other		14,803			31,145			23,871			(16,342	)		(52.5	)		7,274		30.5
Total revenue		71,241			74,938			59,687			(3,697	)		(4.9	)		15,251		25.6
Cost of Revenue
Subscriptions and support		10,981			8,275			7,514			2,706			32.7			761		10.1
Professional services and other		16,996			15,037			14,116			1,959			13.0			921		6.5
Amortization of acquired intangibles		816			—			—			816			100.0			—		100.0
Total cost of revenue		28,793			23,312			21,630			5,481			23.5			1,682		7.8
Gross profit
Subscriptions and support		44,641			35,518			28,302			9,123			25.7			7,216		25.5
Professional services and other		(2,193	)		16,108			9,755			(18,301	)		(113.6	)		6,353		65.1
Total gross profit	$	42,448		$	51,626		$	38,057		$	(9,178	)	$	(17.8	)%	$	13,569	$	35.7	%
Gross margin
Subscriptions and support (1)		79.1	%		81.1	%		79.0	%					(2.0	)%				2.1	%
Professional services and other (1)		(14.8	)		51.7			40.9						(66.5	)				10.8
Total gross margin		59.6	%		68.9	%		63.8	%					(9.1	)%				5.1	%

	Year Ended February 28 or 29,						2013 to 2014 Change						2012 to 2013 Change
	2014		2013		2012		$			%			$		%
	(Dollars in thousands)
Total bookings	$	98,233	$	125,139	$	72,615	$	(26,906	)		(21.5	)%	$	52,524		72.3	%
New and upsell bookings	$	82,073	$	70,288	$	51,001	$	11,785			16.8	%	$	19,287		37.8	%
Billings	$	73,379	$	72,173	$	60,108	$	1,206			1.7	%	$	12,065		20.1	%
Backlog at end of year	$	161,926	$	131,457	$	78,617	$	30,469			23.2	%	$	52,840		67.2	%

(1) The table presents gross margin as a percentage of each component of revenue.

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Year Ended February 28 or 29,						2013 to 2014 Change					2012 to 2013 Change
	2014		2013		2012		$		%			$		%
	(Dollars in thousands)
Subscriptions and support	$	328	$	179	$	58	$	149		83.2	%	$	121		208.6	%
Professional services and other		1,313		442		145		871		197.1			297		204.8
Total cost of revenue	$	1,641	$	621	$	203	$	1,020		164.3	%	$	418		205.9	%

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Revenue and Bookings

The total number of our Enterprise Customers was 43 as of the beginning of fiscal 2012 and grew 146.5% to 106 as of the end of fiscal 2014. During this period, we increased our investment in sales and marketing, leveraged our customer network and expanded further to adjacent verticals to add new customers and create new markets for our products both domestically and abroad. Following the initial deployment of our solutions to our customers, we have been able to sell additional solutions and services to them. Typically, we sell additional solutions and services to our existing customers when they experience returns on investment from the use of our solutions in one business process or business unit, and they choose to purchase more solutions for additional business processes or business units. With these initiatives, we experienced growth in our subscriptions and support revenue from fiscal 2012 to fiscal 2014 due to both the addition of new customers and the increased volume of sales of additional solutions. We also experienced growth in our professional services revenue from fiscal 2012 to 2013 due to both the addition of new customers the increased volume of sales of additional services to our existing customer base. In fiscal 2014, however, our professional services revenue decreased while we focused in the growth of our deployment service capabilities through partner enablement. Pricing changes have not had a significant impact on our revenue from fiscal 2012 to 2014.

We continue to develop new products and services to introduce to both our existing and new customers. In addition, in July 2013, we acquired ICON, a market leader in supply chain planning and collaboration. We expanded our market opportunity and solution portfolio to our product roadmap, and extended our position as a leader in the collaborative planning and execution space.

2014 compared to 2013. Total revenue for fiscal 2014 was $71.2 million. Subscriptions and support revenue and professional services and other revenue comprised 79.2% and 20.8% of the total revenue. Total revenue decreased by $3.7 million, or 4.9%, from fiscal 2013 to fiscal 2014. Total revenue for fiscal 2013 included $3.5 million of revenue accelerated from future periods associated with a contract amendment which would have been recognized through fiscal 2015, absent the amendment.

Subscriptions and support revenue for fiscal 2014 increased 28.9% to $56.4 million compared to $43.8 million for fiscal 2013. Subscriptions and support revenue increased $5.2 million from new customers and $7.4 million from existing customers. Subscriptions and support revenue for fiscal 2014 included $1.7 million of revenue attributable to the acquisition of ICON.

Professional services revenue for fiscal 2014 decreased 52.4% to $14.8 million compared to $31.1 million for fiscal 2013 consistent with our strategy to enable partners to deploy our solutions. Professional services revenue from new customers was $5.2 million. Professional services revenue from existing customers decreased $21.5 million due primarily to the timing of deployments, and difference in the timing of revenue recognition. Revenue for fiscal 2014 included $2.4 million of professional services revenue attributable to the acquisition of ICON.

For fiscal 2014, no single customer accounted for more than 10% of revenue. For fiscal 2014, revenue attributable to customers headquartered in the United States accounted for more 74.8% of total revenue.

Total bookings for fiscal 2014 were $98.2 million, compared to $125.1 million in fiscal 2013. Total bookings in fiscal 2013 were higher due primarily to the timing of multi-year subscription contracts renewal by several of our customers. Fiscal 2013 benefited from renewals of several of our large customers, including Exostar, Vodafone, Celestica and IBM, from which we recognize revenue in fiscal 2014, and will continue to recognize revenue in future periods through the term of the contracts. In fiscal 2014, we added of 31 new customers and sold additional software solutions to existing customers resulting in an increase in new and upsell bookings of $11.8 million, or 16.8%, over fiscal 2013. Total new and upsell bookings were $82.1 million in fiscal 2014 and $70.3 million in fiscal 2013. Subscriptions and support new and upsell bookings were $70.8 million in fiscal 2014 and $39.6 million in fiscal 2013. The changes in revenue and bookings are not necessarily

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directly correlated with each other in a given year due to multi-year terms of our customer agreements, the recognition in most cases of subscriptions revenue over the term of each customer agreement, and the recognition of professional services revenue either over the period in which the services are performed or upon project completion.

2013 compared to 2012. Total revenue for fiscal 2013 was $74.9 million. Subscriptions and support revenue and professional services revenue comprised 58% and 42% of the total revenue. Total revenue increased by $15.3 million, or 25.6%, from fiscal 2012 to fiscal 2013. Total revenue for fiscal 2013 included $3.5 million of revenue accelerated from future periods associated with a contract amendment which would have been recognized through fiscal 2015, absent the amendment.

Subscriptions and support revenue for fiscal 2013 was $43.8 million compared to $35.8 million for fiscal 2012. Subscriptions and support revenue from new customers increased $1.7 million and increased $6.3 million from existing customers. In addition, there was a $0.5 million increase in subscriptions and support revenue associated with the aforementioned contract amendment

Professional services revenue for fiscal 2013 was $31.1 million compared to $23.9 million for fiscal 2012. Professional services revenue from new customers increased $2.0 million. Professional services revenue from existing customers increased $5.2 million. In addition, there was a $3.0 million increase in professional services revenue associated with the aforementioned contract amendment.

For fiscal 2013, we had two customers, BlackBerry and Vodafone, that each accounted for more than 10% of revenue. For fiscal 2013, revenue attributable to customers headquartered in the United States, Canada and United Kingdom each accounted for more than 10% of total revenue.

Total bookings increased $52.5 million, or 72.3%, from fiscal 2012 to fiscal 2013. New and upsell bookings increased $19.3 million, or 37.8%, from fiscal 2012 to fiscal 2013 due to the addition of new customers and sales of additional software solutions and professional services to existing customers, reflecting the improved productivity from our investment in sales and marketing.

Cost of Revenue

Total cost of revenue fluctuates from period to period depending on the growth of our professional services business and any associated increased costs relating to the delivery of our on-demand software solutions and professional services, as well as the timing of significant expenditures.

2014 compared to 2013. Total cost of revenue increased by $5.5 million, or 23.5%, for fiscal 2014 compared to fiscal 2013. The increase in total cost of revenue was attributable primarily to a $4.6 million increase in personnel-related costs, including personnel absorbed from the ICON acquisition, and full-time contractors, and $0.8 million amortization of intangible assets acquired from ICON.

Total cost of subscriptions and support revenue increased $3.5 million, or 42.6% for fiscal 2014 compared to fiscal 2013. The increase was attributable primarily to a $2.7 million increase in personnel-related costs, including full-time contractors. Increase in personnel costs is a result of expansion of the customer base and network users we serve. In fiscal 2014, we recorded $0.8 million amortization of intangible assets acquired from ICON.

Total cost of professional services and other revenue increased $2.0 million, or 13.0% for fiscal 2014 compared to fiscal 2013. The increase was attributable primarily to a $1.9 million increase in personnel-related costs, including full-time contractors. Increase in personnel costs is a result of expansion of the customer base we deliver our software solutions to and the investment to enable partners to deploy our solutions.

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2013 compared to 2012. Total cost of revenue increased $1.7 million, or 7.8%, for fiscal 2013 compared to fiscal 2012. The increase in total cost of revenue was attributable primarily to a $1.9 million increase in employee-related expenses driven by increased headcount to provide services to our customers.

Gross Profit and Gross Margin

Gross profit and gross margin is impacted by the timing of when we record our revenue and costs related to arrangements with customers. We recognize revenue on certain arrangements over the contract term or upon completion of work performed, whereas we recognize costs as incurred. As such, this may cause our gross margins to fluctuate between periods.

2014 compared to 2013. Total gross profit decreased $9.2 million, or 17.8%, for fiscal 2014 compared to fiscal 2013, and gross margin declined from 68.9% to 59.6%. Gross margin on subscriptions and support revenue and professional services and other revenue was 79.1% and (14.8)% for fiscal 2014 compared to 81.1% and 51.7% for fiscal 2013. The decrease in gross profit and gross margin reflects the impact of our strategy to accelerate the investment in the enablement of partners to deploy our solutions for fiscal 2014.

2013 compared to 2012. Total gross profit increased $13.6 million, or 35.7%, for fiscal 2013 compared to fiscal 2012, and gross margin increased from 63.8% in fiscal 2012 to 68.9% in fiscal 2013. Gross margin on subscriptions and support revenue and professional services revenue was 81.1% and 51.7% for fiscal 2013 compared to 79.0% and 40.9% for fiscal 2012. The increase in gross profit and gross margin is impacted by the timing of when we record our revenue and costs related to arrangements with customers.

Operating Expenses

	Year Ended February 28 or 29,						2013 to 2014 Change					2012 to 2013 Change
	2014		2013		2012		$		%			$		%
	(Dollars in thousands)
Research and development	$	18,491	$	14,999	$	13,240		3,492		23.3	%	$	1,759		13.3	%
Sales and marketing		36,238		28,222		18,590		8,016		28.4			9,632		51.8
General administrative		10,660		8,413		5,963		2,247		26.7			2,450		41.1
Acquisition-related expenses		1,182		—		—		1,182		100.0			—		—
Amortization of acquired intangibles		688		—		—		688		100.0			—		—
Total operating expenses	$	67,259	$	51,634	$	37,793	$	15,625		30.3	%	$	13,841		36.6	%

Research and Development

2014 compared to 2013. Research and development expense increased $3.5 million, or 23.3%, for fiscal 2014 compared to fiscal 2013. The increase was attributable to an increase of $2.7 million in employee-related costs attributable to increasing headcount, including personnel absorbed from the ICON acquisition, and $0.8 million increase in software and hardware costs attributed to increased product development activities, including work done on integrating ICON products into our solution. As a percentage of revenue, research and development expense was 26.0% for fiscal 2014 and 20.0% for fiscal 2013.

2013 compared to 2012. Research and development expense increased $1.8 million, or 13.3%, for fiscal 2013 compared to fiscal 2012. The increase was attributable to an increase of $1.0 million in employee-related costs, $0.6 million increase in software and hardware maintenance costs, and $0.2 million in fees paid to third-party contract developers attributed to increased product development activities. As a percentage of revenue, research and development expense was 20.0% for fiscal 2013 and 22.2% for fiscal 2012.

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Sales and Marketing

2014 compared to 2013. Sales and marketing expense increased $8.0 million, or 28.4%, for fiscal 2014 compared to fiscal 2013. The increase was attributable primarily to $7.3 million increase in personnel-related costs as we continue to expand our field sales organization globally. Marketing costs increased $0.6 million in fiscal 2014 compared to fiscal 2013, in line with our strategy to introduce the capabilities of our products to new and prospective customers and increase our investment in indirect channels. As a percentage of revenue, sales and marketing expense increased from 37.7% for fiscal 2013 to 50.9% for fiscal 2014 reflecting our investment in sales and marketing to drive business growth.

2013 compared to 2012. Sales and marketing expense increased $9.6 million, or 51.8%, for fiscal 2013 compared to fiscal 2012. The increase was attributable to an increase in employee-related costs as we continue to expand our field sales organization globally. Average headcount in sales and marketing increased 55.4%, from 51 for fiscal 2012 to 80 for fiscal 2013. As a percentage of revenue, sales and marketing expense increased from 31.1% for fiscal 2012 to 37.7% for fiscal 2013 reflecting our investment in sales and marketing to drive business growth.

General and Administrative

2014 compared to 2013. General and administrative expense increased $2.2 million, or 26.7%, for fiscal 2014 compared to fiscal 2013. In fiscal 2014, we increased our headcount and improved our infrastructure to support the growth of the business, becoming a public company, and the increased number of physical locations managed. The increase was attributable to a $1.3 million increase in employee-related expenses, $0.2 million increase in fees paid to contractors for administrative services, and $0.7 million increase in facility costs. As a percentage of revenue, general and administrative expenses were 15.0% for fiscal 2014 and 11.2% for fiscal 2013.

2013 compared to 2012. General and administrative expense increased $2.5 million, or 41.1%, for fiscal 2013 compared to fiscal 2012. The increase was attributable to a $1.5 million increase in employee-related expense resulting from increased headcount to support the growth of the business and the infrastructure required to support a public company, $0.3 million higher legal and accounting fees, $0.2 million increase in fees paid to contractors for administrative services, $0.1 million increase in software and hardware, and $0.1 million increase in facility costs. As a percentage of revenue, general and administrative expenses were 11.2% for fiscal 2013 and 10.0% for fiscal 2012.

Acquisition-related Expenses

Acquisition-related expenses were $1.2 million for fiscal 2014. These expenses comprised third-party accounting and legal services, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of ICON. As a percentage of revenue, acquisition-related expenses were 1.7% for fiscal 2014. There were no such acquisitions in 2013 and 2012.

Amortization of Acquired Intangibles

Amortization of developed technology acquired from ICON was $0.8 million for fiscal 2014, and is recorded as part of cost of revenues. As a percentage of revenue, amortization of acquired developed technology intangibles was 1.1% for fiscal 2014.

Amortization of customer relationships acquired from ICON was $0.7 million for fiscal 2014, and is recorded as part of operating expenses. As a percentage of revenue, amortization of acquired customer relationships intangibles was 1.0% for fiscal 2014.

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Interest and Other Expense, Net

	Year Ended February 28 or 29,									2013 to 2014 Change						2012 to 2013 Change
	2014			2013			2012			$			%			$			%
	(Dollars in thousands)
Interest income	$	114		$	97		$	2		$	17			17.5	%	$	95			4,750.0	%
Interest expense		(253	)		(247	)		(185	)		(6	)		2.4			(62	)		33.5
Other expense, net		(623	)		(287	)		(228	)		(336	)		117.1			(59	)		25.9
Total interest and other expense, net	$	(762	)	$	(437	)	$	(411	)	$	(325	)		74.4	%	$	(26	)		6.3	%

2014 compared to 2013. Interest and other expense, net was $0.8 million in fiscal 2014 compared to $0.4 million in 2013. In fiscal 2014, we incurred net foreign exchange losses primarily on Euro-denominated transactions.

2013 compared to 2012. For fiscal 2013, interest income increased from investments in available-for-sale securities. This increase was offset by higher interest expense from capital leases and notes payable, and net transaction losses on foreign exchange.

Provision for (benefit from) income taxes

	Year Ended February 28 or 29,							2013 to 2014 Change						2012 to 2013 Change
	2014			2013		2012		$			%			$		%
	(Dollars in thousands)
Provision for (benefit from) income taxes	$	(501	)	$	264	$	78	$	(765	)		289.8	%	$	186		238.5	%

2014 compared to 2013. We recognized an income tax benefit of $0.5 million for fiscal 2014 compared to an income tax provision of $0.3 million for fiscal 2013. The income tax benefit in fiscal 2014 resulted primarily from the tax effect of the amortization of acquired intangible assets from ICON, offset by the effect of foreign income taxes.

2013 compared to 2012. We recognized an income tax provision of $0.3 million for fiscal 2013 compared to $0.1 million for fiscal 2012. The increase resulted from additional foreign income taxes for fiscal 2013.

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Quarterly Results of Operations

The following tables present our unaudited consolidated quarterly results of operations data in dollars and as a percentage of revenue for each of the eight most recent quarters commencing with the quarter ended May 31, 2012 and ending with the quarter ended February 28, 2014. We have prepared this information on a basis consistent with our audited consolidated financial statements and have included all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to fairly present our operating results for the quarters presented. You should read the following tables in conjunction with our audited and unaudited consolidated financial statements and related notes appearing elsewhere in this report. Our quarterly results of operations have varied in the past and are likely to do so again in the future. As such, we believe that comparisons of our quarterly results of operations should not be relied upon as an indication of our future performance. The items discussed below highlight unusual events and circumstances that make comparability between quarters difficult.

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012			May 31, 2012
	(In thousands, except per share data)
Revenue
Subscriptions and support	$	16,313		$	14,400		$	13,433		$	12,292		$	11,633		$	11,215		$	11,131		$	9,814
Professional services and other		3,057			3,860			4,579			3,307			5,978			7,748			11,760			5,659
Total revenue		19,370			18,260			18,012			15,599			17,611			18,963			22,891			15,473
Cost of revenue
Subscriptions and support		3,039			2,769			2,645			2,528			2,063			2,175			1,998			2,039
Professional services and other		4,144			4,309			4,486			4,057			4,029			3,691			3,664			3,653
Amortization of acquired intangibles		350			408			58			—			—			—			—			—
Total cost of revenue		7,533			7,486			7,189			6,585			6,092			5,866			5,662			5,692
Gross profit
Subscriptions and support		12,924			11,223			10,730			9,764			9,570			9,040			9,133			7,775
Professional services and other		(1,087	)		(499	)		93			(750	)		1,949			4,057			8,096			2,006
Total gross profit		11,837			10,774			10,823			9,014			11,519			13,097			17,229			9,781
Operating expenses:
Research and development		4,786			5,099			4,533			4,073			3,729			3,621			3,557			4,092
Sales and marketing		9,904			9,683			8,752			7,899			8,054			7,393			6,628			6,147
General and administrative		3,158			2,413			2,641			2,448			2,304			2,050			2,277			1,782
Acquisition-related expenses		51			340			791			—			—			—			—			—
Amortization of acquired intangibles		294			369			25			—			—			—			—			—
Total operating expenses		18,193			17,904			16,742			14,420			14,087			13,064			12,462			12,021
Income (loss) from operations		(6,356	)		(7,130	)		(5,919	)		(5,406	)		(2,568	)		33			4,767			(2,240	)
Interest and other income (expense), net		(383	)		(461	)		31			51			(120	)		(53	)		(169	)		(95	)
Income (loss) before income taxes		(6,739	)		(7,591	)		(5,888	)		(5,355	)		(2,688	)		(20	)		4,598			(2,335	)
Benefit from (provision for) income taxes		366			209			(35	)		(39	)		(127	)		(62	)		(32	)		(43	)
Net income (loss)		(6,373	)		(7,382	)		(5,923	)		(5,394	)		(2,815	)		(82	)		4,566			(2,378	)
Net income (loss) per share
Basic	$	(0.23	)	$	(0.28	)	$	(0.23	)	$	(0.21	)	$	(0.11	)	$	—		$	0.33		$	(0.38	)
Diluted	$	(0.23	)	$	(0.28	)	$	(0.23	)	$	(0.21	)	$	(0.11	)	$	—		$	0.19		$	(0.38	)
Weighted average shares used to compute net income (loss) per share:
Basic		27,497			26,545			26,018			25,615			25,178			25,021			13,875			6,190
Diluted		27,497			26,545			26,018			25,615			25,178			25,021			24,421			6,190

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	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012			May 31, 2012
Revenue
Subscriptions and support		84.2	%		78.9	%		74.6	%		78.8			66.1	%		59.1	%		48.6			63.4	%
Professional services and other		15.8			21.1			25.4			21.2			33.9			40.9			51.4			36.6
Total revenue		100.0			100.0			100.0			100.0			100.0			100.0			100.0			100.0
Cost of revenue (1)
Subscriptions and support		20.8			22.1			20.1			20.6			17.7			19.4			17.9			20.8
Professional services and other		135.6			111.6			98.0			122.7			67.4			47.6			23.1			64.6
Total cost of revenue		38.9			41.0			39.9			42.2			34.6			30.9			24.8			36.8
Gross margin (1)
Subscriptions and support		79.2			77.9			79.9			79.4			82.3			80.6			82.1			79.2
Professional services and other		(35.6	)		(11.6	)		2.0			(22.7	)		32.6			52.4			68.8			35.4
Total gross margin		61.1			59.0			60.1			57.8			65.4			69.1			75.2			63.2
Operating expenses:
Research and development		24.7			27.9			25.2			26.1			21.2			19.1			15.5			26.4
Sales and marketing		51.1			53.0			48.6			50.6			45.7			39.0			29.0			39.7
General and administrative		16.3			13.2			14.7			15.7			13.1			10.8			9.9			11.5
Acquisition-related expenses		0.3			1.9			4.4			—			—			—			—			—
Amortization of acquired intangibles		1.5			2.0			0.1			—			—			—			—			—
Total operating expenses		93.9			98.1			92.9			92.4			80.0			68.9			54.4			77.7
Income (loss) from operations		(32.8	)		(39.0	)		(32.9	)		(34.7	)		(14.6	)		0.2			20.8			(14.5	)
Interest and other income (expense), net		(2.0	)		(2.5	)		0.2			0.3			(0.7	)		(0.3	)		(0.7	)		(0.6	)
Income (loss) before income taxes		(34.8	)		(41.5	)		(32.7	)		(34.3	)		(15.3	)		(0.1	)		20.1			(15.1	)
Provision for (benefit from) income taxes		1.9			1.1			(0.2	)		(0.3	)		(0.7	)		(0.3	)		(0.1	)		(0.3	)
Net income (loss)		(32.9	)%		(40.4	)%		(32.9	)%		(34.6	)%		(16.0	)%		(0.4	)%		19.9	%		(15.4	)%

(1) The table above shows cost of revenue and gross margin as a percentage of each component of revenue.

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012		Aug 31, 2012			May 31, 2012
	(Dollars in thousands)
Other Financial and Operational Data:
Adjusted EBITDA (1)	$	(3,582	)	$	(4,015	)	$	(2,831	)	$	(4,157	)	$	(1,474	)	$	1,044	$	5,635			(1,352	)
Free cash flow (2)	$	4,027		$	(7,588	)	$	(3,939	)	$	(3,335	)	$	4,117		$	1,242	$	(5,977	)	$	(1,477	)
Number of unique registered trading partner (3)		38,548			37,931			37,048			36,238			35,302			34,740		33,371			32,390
Number of unique registered users (3)		125,960			122,739			117,212			112,903			108,846			105,060		99,292			94,708

(1) We define Adjusted EBITDA as net income (loss) adjusted for interest and other income (expense), net, benefit from or provision for income taxes, depreciation and amortization, stock-based compensation expense, and acquisition-related expenses. See “Adjusted EBITDA” in the “Key Financial Performance Measures” of this section for more information and for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.

(2) We define free cash flow as net cash provided by (used in) operating activities less capital expenditures, adjusted for payment of acquisition-related expenses. See “Free Cash Flow” in the “Key Financial Performance Measures” of this section for more information and for a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP.

(3) We define unique registered trading partners and unique registered users as current entities and individuals that are connected to our network as of the balance sheet date. We view the number of unique registered trading partners and unique registered users as key indicators of the reach of our network and the value our enterprise customers are deriving from our solutions.

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Stock-based compensation included in the consolidated statements of operations data above was as follows:

	Three Months Ended
	Feb 28, 2014		Nov 30, 2013		Aug 31, 2013		May 31, 2013		Feb 28, 2013		Nov 30, 2012		Aug 31, 2012		May 31, 2012
	(Dollars in thousands)
Cost of revenue	$	509	$	403	$	497	$	232	$	177	$	181	$	142	$	121
Research and development		111		133		148		68		54		52		25		53
Sales and marketing		569		559		617		290		261		206		137		145
General and administrative		313		351		456		255		182		171		178		160
Total stock-based compensation	$	1,502	$	1,446	$	1,718	$	845	$	674	$	610	$	482	$	479

Adjusted EBITDA

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated:

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012		May 31, 2012
	(Dollars in thousands)
Reconciliation of Adjusted EBITDA:
Net income (loss)	$	(6,373	)	$	(7,382	)	$	(5,923	)	$	(5,394	)	$	(2,815	)	$	(82	)	$	4,566	$	(2,378	)
Interest and other income (expense), net		383			461			(31	)		(51	)		120			53			169		95
Benefit from (provision for) income taxes		(366	)		(209	)		35			39			127			62			32		43
Depreciation and amortization		1,221			1,329			579			404			420			401			386		409
Stock-based compensation		1,502			1,446			1,718			845			674			610			482		479
Acquisition-related expenses		51			340			791			—			—			—			—		—
Adjusted EBITDA	$	(3,582	)	$	(4,015	)	$	(2,831	)	$	(4,157	)	$	(1,474	)	$	1,044		$	5,635	$	(1,352	)

Free Cash Flow

A reconciliation of net cash provided by (used in) operating activities to free cash flow is presented below:

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012			May 31, 2012
	(Dollars in thousands)
Free Cash Flow Data:
Net cash provided by (used in) operating activities	$	3,718		$	(8,023	)	$	(4,087	)	$	(3,296	)	$	4,138		$	1,312		$	(5,584	)	$	(823	)
Capital expenditures		(48	)		(68	)		(58	)		(39	)		(21	)		(70	)		(393	)		(654	)
Acquisition-related expenses		357			503			206			—			—			—			—			—
Free cash flow	$	4,027		$	(7,588	)	$	(3,939	)	$	(3,335	)	$	4,117		$	1,242		$	(5,977	)	$	(1,477	)

Revenue and Gross Margin

Our quarterly revenue fluctuates, due primarily to the timing of revenue recognition, which depends primarily on revenue recognition requirements and seasonality. We believe that this seasonality is due to customer buying patterns typical in this industry and is likely to continue in the future. In the future, we expect our revenue to also reflect such seasonality as a result of our adoption of the new revenue accounting guidance.

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Over the past eight quarters, our gross margins have ranged from 57.8% to 75.2%. As reflected in the table above, we have experienced quarter to quarter volatility in gross margin. We believe that this volatility was largely the result of our revenue mix in a particular period and the timing of revenue recognition. The amount of subscriptions and support in a period is a significant driver of our overall gross margin because of the high margins our software solutions generally produce. Gross margins in professional services may be affected by the nature and scope of work required in our contracts with customers.

Gross margin for the quarter ended August 31, 2012 was 75.2%. Total revenue for the three months ended August 31, 2012 included $4.5 million of revenue accelerated from future periods associated with a contract amendment, of which $0.5 million would have been recognized in the quarter ended November 30, 2012 and the quarter ended February 28, 2013, and $3.5 million would have been recognized subsequent to fiscal 2013.

The negative gross margin for professional services and other revenue in fiscal 2014 reflects the impact of our strategy to accelerate the investment in the enablement of partners to deploy our solutions during the fiscal year.

Liquidity and Capital Resources

	Year Ended February 28 or 29,
	2014			2013			2012
	(Dollars in thousands)
Cash and cash equivalents at the end of the year	$	42,723		$	20,262		$	10,219
Net cash used in operating activities		(11,688	)		(957	)		(826	)
Net cash used in investing activities		(7,373	)		(28,132	)		(1,764	)
Net cash provided by financing activities		41,498			39,171			2,750

As of February 28, 2014, we had total cash, cash equivalents, short-term and long-term investments of $65.6 million, including cash and cash equivalents of $42.7 million, and short-term investments in available-for-sale debt securities of $14.4 million. As of February 28, 2014, we also had $8.5 million long-term investments in available-for-sale debt securities. As of February 28, 2013, we had total cash, cash equivalents, short-term and long-term investments of $47.2 million, including cash and cash equivalents of $20.2 million, and short-term investments in available-for-sale debt securities of $15.3 million.

As of February 28, 2014 and 2013, $1.5 million and $0.6 million of our cash, cash equivalents and investments in available-for-sale securities were held by foreign subsidiaries. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S.

On January 24, 2014, we received proceeds of $50.0 million from our secondary public stock offering, net of underwriting discounts and commissions, but before deducting payments for offering expenses of $0.4 million.

Operating Cash Flows

Our cash flow from operating activities is significantly influenced by the amount and timing of customer payments and the amount of cash we invest in personnel and infrastructure to support the anticipated future growth of our business. Net cash used in operating activities has historically resulted from losses from operations and changes in working capital.

Net cash used in operating activities was $11.7 million for fiscal 2014. The timing of our billings and collections relating to our sales and the timing of the payment of our liabilities have a significant impact on our cash flows. The use of cash in operating activities reflects our $25.1 million net loss adjusted by non-cash stock-based compensation of $5.5 million and depreciation and amortization of $3.5 million. This was offset by $4.2 million from the net change in our operating assets and liabilities. The net change in our operating assets and liabilities resulted primarily from an increase in deferred revenue of $2.4 million resulting from increased sales

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and billings, increase in accounts payable and accrued liabilities of $3.5 million due to growth in business activities, and a $0.7 million increase in non-current liabilities. These were offset by an increase of $2.1 million in prepaid expenses for software and hardware maintenance expense, marketing costs, services and benefits, and increase in accounts receivable of $0.4 million due to increased billings, and timing of collections from customers.

Net cash used in operating activities was $1.0 million for fiscal 2013. The timing of our billings and collections relating to our sales and the timing of the payment of our liabilities have a significant impact on our cash flows. The use of cash in operating activities reflects our $0.7 million net loss adjusted by non-cash stock-based compensation of $2.2 million and depreciation and amortization of $1.6 million. Additionally, we used $4.5 million from the net change in our operating assets and liabilities. The net change in our operating assets and liabilities resulted primarily from a decrease in deferred revenue of $3.4 million as a consequence of the recognition of revenue for the year ended February 28, 2013 associated with cash collected in previous periods, an increase in accounts receivable of $4.4 million due to the timing of collections from customers, offset by an increase in accounts payable and accrued liabilities of $2.1 million due to growth in business activities, and a decrease of $1.1 million in prepaid expenses for software and hardware maintenance expense, and marketing costs.

Net cash used in operating activities was $0.8 million for fiscal 2012. The timing of our billings and collections relating to our sales and the timing of the payment of our liabilities have a significant impact on our cash flows. The use of cash in operating activities was attributable primarily to the net change in our operating assets and liabilities of $2.7 million resulting from an increase in accounts receivable of $4.0 million due to growth in our billings and an increase of $1.0 million in prepaid expenses for software and hardware maintenance expense, and marketing costs. This was offset by an increase in accounts payable and accrued expenses of $1.9 million reflecting the timing of payments to our suppliers and growth in business activities and a $0.4 million increase in deferred revenue resulting from increased sales and billings. Net cash used in operating activities for fiscal 2012 also reflects our $0.2 million net loss adjusted for non-cash depreciation and amortization of $1.5 million, stock-based compensation of $0.7 million and other non-cash items of $0.2 million.

Investing Cash Flows

Historically, our primary investing activities have comprised capital expenditures associated with expanding our cloud-based, on-demand software solutions infrastructure and growing our workforce. For fiscal 2014 and 2013, we invested a portion of the proceeds from our public stock offering in available-for-sale securities.

Net cash used in investing activities for fiscal 2014 was $7.4 million, which comprised primarily $11.5 million in net payments for the acquisition of ICON, $4.3 million of net purchases of investments in available-for-sale securities, and $0.2 million of capital expenditures.

Net cash used in investing activities for fiscal 2013 was $28.1 million, which was comprised primarily 27.0 million in net purchases of investments in available-for-sale securities, and $1.1 million of capital expenditures.

Net cash used in investing activities for fiscal 2012 was $1.8 million, which comprised primarily capital expenditures.

Financing Cash Flows

Net cash provided by financing activities for fiscal 2014 was $41.5 million, which comprised primarily $50.0 million in net proceeds from our secondary stock offering after deducting underwriting discounts and commissions. For fiscal 2014, we also paid $0.4 million of expenses in connection with our stock offering. For fiscal 2014, we repaid $7.1 million of debt assumed in the ICON acquisition. We also made net payments of $1.3 million under our bank overdraft facilities and $2.2 million on our notes payable and capital lease obligations. In fiscal 2014, we received $2.5 million proceeds from the exercise of stock options.

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Net cash provided by financing activities for fiscal 2013 was $39.2 million, which was comprised primarily $52.3 million in proceeds from our IPO after deducting underwriting discounts and commissions. For fiscal 2013, we also paid $2.4 million of expenses in connection with our stock offering. We also made net payments of $9.7 million under our credit facility and $2.5 million on our notes payable and capital lease obligations. For fiscal 2013, we received $0.7 million from the issuance of Series BB preferred stock upon the exercise of warrants and $0.7 million in proceeds from the exercise of stock options.

Net cash provided by financing activities for fiscal 2012 was $2.8 million. For fiscal 2012, we received $0.1 million from the issuance of Series CC preferred stock upon the exercise of warrants. For fiscal 2012, our net borrowings under our credit facility amounted to $4.2 million. We also made payments of $1.1 million on notes payable for fixed asset purchases and $0.6 million for costs associated with preparing for our initial public offering.

Adequacy of Capital Resources

Our future capital requirements may vary materially from those now planned and will depend on many factors. These may include the costs to develop and implement new solutions and applications, the sales and marketing resources needed to further penetrate our target markets, the expansion of our operations in the United States and internationally and the response of competitors to our solutions and applications.

We believe our existing cash, cash equivalents and investment balances, together with anticipated cash flow from operations, will be sufficient to meet our working capital and operating resource requirements for at least the next 12 months.

From time to time, we may consider additional financing sources and means to lower our cost of capital, which could include the sale of equity, equity-linked and debt financing. In fiscal 2014, we received $50.0 million in proceeds from our secondary stock offering after deducting underwriting discounts and commissions, but before deducting offering expenses.

In addition, in connection with any future acquisitions, we may require additional funding which may be provided in the form of additional debt, equity or equity-linked financing or a combination thereof. There can be no assurance that any additional financing will be available to us on acceptable terms or at all. In fiscal 2014, we paid $11.5 million for the acquisition of ICON, and repaid $7.1 million of debt assumed in the ICON acquisition.

Our Indebtedness

On October 7, 2013, we entered into an agreement with a bank for a revolving loan facility with a borrowing capacity of up to $20 million. Funds available are subject to a borrowing formula which is secured by our accounts receivable and contracted backlog. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal “prime rate” minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is our general obligation secured by our tangible and intangible assets, as well as a negative pledge whereby we agree not to give any creditor a security interest on our intellectual property. In fiscal 2014, we did not draw on this loan facility.

During fiscal 2014, ICON maintained bank overdraft facilities with three local banks used primarily to fund working capital. The original amount available under the bank overdraft facilities was approximately $2.1 million (€1.6 million). As of February 28, 2014, ICON closed two of the accounts, leaving approximately $0.7 million (€0.5 million) of overdraft capacity. As of February 28, 2014, there were no overdraft amounts outstanding.

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Contractual Obligations, Commitments and Contingencies

We generally do not enter into long-term minimum purchase commitments. Our principal commitments, in addition to those related to our line of credit discussed above, consist of obligations under capital leases and notes payable for equipment, software and related support and maintenance, and operating leases for equipment and office space. The following table summarizes our outstanding contractual obligations as of February 28, 2014:

	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(Dollars in thousands)
Notes payable and capital leases (1)	$	5,594	$	2,995	$	2,599	$	—	$	—
Operating lease obligations (2)		7,681		2,431		3,256		1,994		—
Payable to Icon Shareholders (3)		5,473		5,473		—		—		—
Tax contingencies (4)		—		—		—		—		—
Total contractual obligations	$	18,748	$	10,899	$	5,855	$	1,994	$	—

(1) For fiscal 2014 and 2013, we financed the purchase of certain fixed assets, software licenses and related support and maintenance with notes payable and capital lease financing. The interest rates on notes payable and capital lease obligations range from 2.77% to 13.13% per annum.

(2) We lease our primary office space under noncancelable operating leases with various expiration dates through 2018.

(3) In accordance with the share purchase agreement for the acquisition of ICON, we are contractually obligated to place in escrow approximately $5.5 million (€4 million) payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period.

(4) As of February 28, 2014, we had gross unrecognized tax benefits of $8.4 million and an additional $0.1 million of gross interest and penalties classified as other noncurrent liabilities in our consolidated balance sheets. As of the date of this report, we are unable to make a reasonably reliable estimate of the timing of payments in individual years due to uncertainties in the timing of settlement for potential tax audit outcomes. As a result, such amounts are not included in the above contractual obligations table.

Related Party Transactions

One of our directors, Patrick J. O’Malley, III, is the Chief Financial Officer of Seagate Technology Public Limited Company (“Seagate PLC”). Seagate LLC, a wholly owned subsidiary of Seagate PLC, is one of our customers and we earned revenue of $3.3 million, $3.4 million, and $1.8 million for fiscal 2014, 2013, and 2012. We received payments of $4.7 million, $3.1 million, and $2.3 million for fiscal 2014, 2013, and 2012 relating to subscriptions to our solutions. We have outstanding receivables from Seagate of $0.1 million and $1.0 million as of February 28, 2014 and 2013.

Off-Balance Sheet Arrangements

During fiscal 2014 and 2013, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually limited purposes.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets

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and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Accordingly, actual results may differ from these estimates under other assumptions or conditions.

Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include those related to:

• revenue recognition;

• income taxes;

• stock-based compensation;

• valuation of acquired intangibles;

• valuation of acquired goodwill; and

• impairment of goodwill, intangibles and other long-lived assets;

Please refer to the notes to the consolidated financial statements for further discussion of our accounting policies.

Revenue Recognition

We generate revenue from the sale of subscriptions and support and professional services and other.

Subscriptions and Support. We offer on-demand software solutions, which enable our customers to have constant access to our solutions without the need to manage and support the software and associated hardware themselves. We house the hardware and software in third-party facilities, and provide our customers with access to the software solutions, along with data security and storage, backup and recovery services. Customer contracts typically have terms of three to five years. We invoice our customers for subscriptions and support in advance for annual use of the software solutions. Our payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services and Other. Professional services and other revenue is generated primarily from fees for enabling services, including solution consulting and solution deployment. These services are sold in conjunction with the sale of our on-demand software solutions. We provide professional services both on a fixed-fee and a time-and-materials basis, and we invoice customers either in advance, monthly, or upon reaching project milestones.

We enter into arrangements with multiple elements, comprising subscriptions and support and professional services and other. Arrangements with customers typically do not provide the customer with the right to take possession of the software underlying the on-demand solutions. We commence revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, our fee to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

We account for subscriptions and support and professional services revenue as separate units of accounting and allocate revenue to each element of an arrangement based on a selling price hierarchy. As we have been unable to establish vendor-specific objective evidence of selling price (“VSOE”), or third-party evidence of selling price (“TPE”) for the elements of our arrangements, we determine the best estimate of selling price (“BESP”) for each element primarily by considering prices we charge for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed-fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time-and-material basis is recognized as services are delivered.

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Prior to fiscal 2012, we determined that we did not have objective and reliable evidence of fair value for each element of our arrangements, and in accordance with the then-existing accounting standards for multiple-element arrangements, we accounted for subscriptions and support and professional services revenue as a single unit of accounting and recognized the total arrangement fee ratably over the contractual term of the subscription agreement. These arrangements, if materially modified after February 28, 2011, are accounted for under the current accounting standards for multiple-element arrangements.

The accounting related to revenue recognition in the SaaS industry is complex and is affected by interpretations of the rules which are subject to change. We evaluate revenue recognition on a contract-by-contract basis as the terms of each arrangement vary. The evaluation of our contractual arrangements often requires judgments and estimates that affect the timing of revenue recognized in our statements of operations.

Income Taxes

We use the asset and liability method for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards, and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized.

We account for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

As of February 28, 2014, we had net operating loss (“NOL”), carryforwards for federal income tax purposes of $340.9 million, which begin to expire in fiscal 2023, and have NOL carryforwards for state income tax purposes of $69.2 million, which begin to expire in fiscal 2015. In order to utilize the NOLs, we must generate consolidated taxable income which can offset such carryforwards.

Section 382 of the Internal Revenue Code (“Code”), imposes limitations on a corporation’s ability to utilize its NOLs if the corporation experiences an ownership change, as defined in the Code. Based upon currently available information, we believe there was an ownership change in a prior year. As a result, utilization of our U.S. federal NOLs in future periods will likely be subject to an annual limitation under Code Section 382. As of February 28, 2014, federal and state net operating loss carryforwards for income tax purposes, before any Section 382 limitation, were $340.9 million and $69.2 million. Accordingly, we have reduced our deferred tax assets based upon the anticipated federal and state net operating losses that are expected to expire unutilized due to the annual limitation.

Consistent with GAAP requirements, we assessed, as of February 28, 2014, that it is not more likely than not that we will ultimately realize the benefit of our NOLs and have, therefore, recorded a full valuation allowance to reduce the carrying value of our NOLs to zero.

As of February 28, 2014, we had research and development tax credits of $6.0 million and $4.7 million available to reduce future federal and California income taxes. Federal research and development credit carryforwards will begin to expire in fiscal 2023. California research and development credits carry forward indefinitely.

There is $1.1 million of undistributed earnings of our foreign subsidiaries at February 28, 2014. Federal income taxes have not been provided for on the unremitted earnings of foreign corporations because such earnings are intended to be indefinitely reinvested. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be repatriated.

59

Stock-Based Compensation

Determining the fair value of stock-based awards at the grant date requires judgment. We use the Black-Scholes option-pricing model to determine the fair value of stock options awarded. The determination of the fair value of stock-based awards on the date of grant using a pricing model is affected by our common stock fair value as well as by assumptions including our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates, and expected dividends, which are estimated as follows:

• Fair Value of Our Common Stock. Prior to our IPO, given the absence of any active market for our common stock, the fair value of the common stock underlying stock options granted was determined by our board of directors, with input from our management, and based in part on third-party valuations. The valuations were made with the intent to grant options at a price per share not less than the per share fair value of our common stock underlying those options on the date of grant. We considered numerous objective and subjective factors in valuing our common stock at each valuation date in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. For stock-based awards granted subsequent to our IPO, our board of directors determined the fair value based on the closing price of our common stock as reported on the NASDAQ Global Market on the date of the grant.

• Expected Term. The expected term was estimated using the simplified method allowed under SEC guidance giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior as influenced by changes to the terms of our stock-based awards.

• Volatility. As a newly public entity, there is insufficient historical volatility data for our shares. As a result, we estimated volatility based on a peer group of companies, which collectively provide a reasonable basis for estimating volatility. We intend to continue to consistently use the same group of publicly traded peer companies to determine volatility in the future until sufficient information regarding volatility of our share price becomes available or the selected companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

• Risk-free Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group.

• Dividend Yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

We grant stock-based awards subject to certain financial-based performance targets. We are required to evaluate the probability of achieving these targets in determining the compensation expense to be recorded that are associated with these grants.

We are required to estimate forfeitures at the time of grant and revise those estimates in the subsequent periods if actual forfeitures rates differ from what was estimated. If we use different assumptions for estimating stock-based compensation expense in future periods or if actual forfeitures differ materially from our estimated forfeitures, future stock-based compensation expense may differ significantly from what we have recorded in the current period and could materially affect our operating income, net income (loss) and net income (loss) per share.

60

The fair value of employee stock options granted since March 1, 2010 was estimated at the grant date using the Black-Scholes option pricing model by applying the following assumptions:

	Year Ended February 28 or 29,
	2014	2013	2012
Expected term (in years)	5.96	6.01	5.84
Volatility	49.32% - 51.76%	50.0% - 55.0%	49.1% - 54.5%
Risk-free interest rates	0.73% - 1.85%	0.8% - 1.3%	1.1% - 2.6%
Dividend yield	—	—	—

Changes to the underlying assumptions, including increased forfeiture rates, may have a significant impact on the underlying value of the stock options, which could have a material impact on our consolidated financial statements.

The aggregate intrinsic value of vested stock options, unvested stock options and unvested RSUs outstanding as of February 28, 2014, based on the closing price of our common stock of $27.79 on February 28, 2014, was $18.0 million, $22.2 million and $15.8 million. There were no vested RSUs outstanding as of February 28, 2014.

Valuation of Acquired Intangible assets

Our intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, generally 5 years. The straight line method approximates the manner in which cash flows are generated from the intangible assets. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates of our intangible assets are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Valuation of Goodwill

Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. Upon acquisition, the purchase price is first allocated to identifiable assets and liabilities, including intangible assets, based on estimated fair value, with any remaining purchase price recorded as goodwill.

In fiscal 2014, we recorded goodwill of $22.6 million associated with the ICON acquisition. The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with our Business Network, we expand our market opportunity and solution portfolio, accelerate our product roadmap, and extend our position as the leader in the collaborative planning and execution space.

Impairment of Goodwill, Intangibles and Long-Lived Assets

We evaluate the recoverability of our long-lived assets, which consist principally of property and equipment, and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We measure that recoverability of an asset by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset and intangibles is not recoverable, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds its fair value. We did not record any asset impairment charges for fiscal 2014, 2013 and 2012.

61

We perform a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse changes in customer demand or business climate, obsolescence of acquired technology and related competitive considerations. We perform goodwill impairment test in accordance with guidance issued by the FASB. The guidance provides us the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine that this is the case, we are required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. If we determine that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. We did not record any charges related to goodwill impairment for fiscal 2014. We did not record any amounts attributable to goodwill in fiscal 2013 and 2012.

Segment Information

We report information about the segments of our business based on how the information is used by our chief operating decision maker. Since inception, management has evaluated our performance and made operating decisions based on consolidated results. Accordingly, we operate as one reportable segment.

Recently Issued and Adopted Accounting Guidance

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to our condensed consolidated results of operations or financial position.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit (“UTB”), or a portion of a UTB, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the UTB should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective prospectively for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. We do not expect this guidance to have a material impact on our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is a result primarily of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes.

Interest Rate Risk

We had cash, cash equivalents and investments in available-for-sale securities of $65.6 million as of February 28, 2014 and $47.2 million as of February 28, 2013.

Our cash and cash equivalents and investments consist of cash, money market funds and fixed income investments. Our fixed income portfolio is primarily invested in corporate bonds and commercial paper. We use a professional investment management firm to manage a large portion of our invested cash. Because the majority of our portfolio consists of cash and cash equivalents, which have a relatively short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes. However, our fixed income investments carry a degree of interest rate risk. Fixed income investments may have their fair market value adversely impacted by a rise in interest rates. We believe a hypothetical 10% increase in interest rates as of February 28, 2014 would have an immaterial impact on our investment portfolio.

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly the exchange rates for the Euro, the British Pound and the Malaysian Ringgit. For the years ended February 28, 2014 and February 29, 2013, we sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of our contracts outstanding as of February 28, 2014 and February 29, 2013.

	As of February 28, 2014								As of February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value
	(Dollars in thousands except average contract rates)
Foreign currency forward exchange contracts:
Euro	$	7,401			1.4	$	(256	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(2,146	)		3.2		(59	)		(2,255	)		3.1		(8	)
British Pound		(4,317	)		1.6		212
Total	$	938				$	(103	)	$	5,067				$	(154	)

We entered into the foreign exchange contracts with two counterparties. Typically, we have the right of offset for gains earned and losses incurred under contracts with the same counterparty, and we therefore record contracts with the same counterparty on a net basis on our balance sheet.

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The following table presents a sensitivity analysis of our foreign forward exchange contract portfolio using a statistical model to estimate the potential gain or loss in fair value that could arise from hypothetical appreciation or depreciation of foreign currency.

	As of February 28, 2014
Foreign Forward Exchange Contracts	Value of Contracts Given X% Appreciation of Foreign  Currency						Notional Amount Sell (Buy)			Value of Contracts Given X% Depreciation of Foreign  Currency
	10%			5%						-5%			-10%
	(Dollars in thousands)
Euro	$	6,661		$	7,031		$	7,401		$	7,771		$	8,141
Malaysian Ringgit		(1,931	)		(2,039	)		(2,146	)		(2,253	)		(2,361	)
British Pound		(3,885	)		(4,101	)		(4,317	)		(4,533	)		(4,749	)

	As of February 28, 2013
Foreign Forward Exchange Contracts	Value of Contracts Given X% Appreciation of Foreign  Currency						Notional Amount Sell (Buy)			Value of Contracts Given X% Depreciation of Foreign  Currency
	10%			5%						-5%			-10%
	(Dollars in thousands)
Euro	$	6,590		$	6,956		$	7,322		$	7,688		$	8,054
Malaysian Ringgit		(2,029	)		(2,142	)		(2,255	)		(2,367	)		(2,480	)

As our international operations continue to grow, we may choose to utilize more foreign currency forward and option contracts to manage currency exposures.

We do not use derivative financial instruments for speculative or trading purposes; however, this does not mean that we may not adopt specific hedging strategies in the future.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

E2OPEN, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		66
Report of Independent Registered Public Accounting Firm		67
Consolidated Balance Sheets		68
Consolidated Statements of Operations and Comprehensive Income (Loss)		69
Consolidated Statements of Stockholders’ Equity		70
Consolidated Statements of Cash Flows		71
Notes to Consolidated Financial Statements		72
Selected Quarterly Financial Information (Unaudited)		98

65

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

E2open, Inc.

Foster City, California

We have audited the accompanying consolidated balance sheet of E2open, Inc. and subsidiaries (the Company) as of February 28, 2014, and the related consolidated statement of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the year ended February 28, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of E2open, Inc. and subsidiaries as of February 28, 2014, and the results of their operations and their cash flows for each of the year ended February 28, 2014, in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

San Jose, California

May 2, 2014

66

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

E2open, Inc.:

We have audited the accompanying consolidated balance sheet of E2open, Inc. and subsidiaries (the Company) as of February 28, 2013 and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit) and cash flows for the two-year period ended February 28, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of E2open, Inc. and subsidiaries as of February 28, 2013, and the results of their operations and their cash flows for each of the years in the two-year period ended February 28, 2013, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of classifying payments made for deferred initial public offering costs in the consolidated statements of cash flows.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue arrangements with multiple deliverables as of March 1, 2011, resulting from the adoption of new accounting pronouncement.

/s/ KPMG LLP

Santa Clara, CA

April 30, 2013

67

E2OPEN, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except per share data)

	February 28,
	2014			2013
Assets
Current assets:
Cash and cash equivalents	$	42,723		$	20,262
Short-term investments		14,374			15,289
Accounts receivable, net of allowance of $78 and $55		21,995			20,670
Prepaid expenses and other current assets		4,380			2,212
Total current assets		83,472			58,433
Long-term investments		8,541			11,692
Goodwill		22,556			—
Intangible assets, net		11,395			—
Property and equipment, net		3,431			2,438
Other assets		1,316			905
Total Assets	$	130,711		$	73,468
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	12,366		$	10,769
Deferred revenue		43,672			39,789
Payable to ICON shareholders		5,473			—
Current portion of notes payable and capital lease obligations		2,995			849
Total current liabilities		64,506			51,407
Deferred revenue		1,587			1,898
Notes payable and capital lease obligations, net of current portion		2,599			562
Other noncurrent liabilities		2,195			508
Total liabilities		70,887			54,375
Commitments and contingencies (note 10)
Stockholders’ equity
Preferred stock, $0.001 par value. 10,000 authorized shares, no shares issued and outstanding		—			—
Common stock, $0.001 par value. 100,000 shares authorized, 28,825 and 25,424 shares issued and outstanding as of February 28, 2014 and 2013		29			25
Additional paid-in capital		426,031			360,280
Accumulated other comprehensive income (loss)		31			(17	)
Accumulated deficit		(366,267	)		(341,195	)
Total stockholders’ equity		59,824			19,093
Total liabilities and stockholders’ equity	$	130,711		$	73,468

The accompanying notes are an integral part of these consolidated financial statements.

68

E2OPEN, INC. AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except per share data)

	Years Ended February 28 or 29,
	2014			2013			2012
Revenue
Subscriptions and support	$	56,438		$	43,793		$	35,816
Professional services and other		14,803			31,145			23,871
Total revenue		71,241			74,938			59,687
Cost of revenue
Subscriptions and support		10,981			8,275			7,514
Professional services and other		16,996			15,037			14,116
Amortization of acquired intangibles		816			—			—
Total cost of revenue		28,793			23,312			21,630
Gross profit
Subscriptions and support		44,641			35,518			28,302
Professional services and other		(2,193	)		16,108			9,755
Total gross profit		42,448			51,626			38,057
Operating expenses
Research and development		18,491			14,999			13,240
Sales and marketing		36,238			28,222			18,590
General and administrative		10,660			8,413			5,963
Acquisition-related expenses		1,182			—			—
Amortization of acquired intangibles		688			—			—
Total operating expenses		67,259			51,634			37,793
Income (loss) from operations		(24,811	)		(8	)		264
Interest and other expense, net		(762	)		(437	)		(411	)
Loss before income taxes		(25,573	)		(445	)		(147	)
Benefit from (provision for) income taxes		501			(264	)		(78	)
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Net loss per share:
Basic and diluted	$	(0.95	)	$	(0.04	)	$	(0.04	)
Weighted average shares used to compute net loss per share
Basic and diluted		26,415			17,490			5,918
Other comprehensive income (loss), net
Net unrealized gains (losses) on investments during the period		(18	)		14			—
Less: reclassification adjustment for losses included in income		14			—			—
Net unrealized gains (losses) on investments		(4	)		14			—
Net foreign currency translation gains (losses)		52			(40	)		9
Total other comprehensive income (loss), net		48			(26	)		9
Total comprehensive loss	$	(25,024	)	$	(735	)	$	(216	)

The accompanying notes are an integral part of these consolidated financial statements.

69

E2OPEN, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands)

	Preferred stock						Common stock				Additional paid-in capital			Accumulated Other Comprehensive Income (Loss)			Accumulated deficit			Total stockholders’ equity (deficit)
	Shares			Amount			Shares		Amount
Balances, February 28, 2011		13,794		$	83,346			5,739	$	6	$	222,882		$	—		$	(340,261	)	$	(34,027	)
Exercise of stock options		—			—			171		—		89			—			—			89
Issuance of preferred stock upon exercise of warrants		13			145			—		—		—			—			—			145
Vesting of early-exercised stock options		—			—			224		—		78			—			—			78
Share-based compensation expense		—			—			—		—		727			—			—			727
Comprehensive income
Currency translation adjustment		—			—			—		—		—			9			—			9
Net loss		—			—			—		—		—			—			(225	)		(225	)
Balances, February 29, 2012		13,807			83,491			6,134		6		223,776			9			(340,486	)		(33,204	)
Exercise of stock options					—			588		—		723			—			—			723
Vesting of early-exercised stock options		—			—			107		—		37			—			—			37
Issuance of Series BB preferred stock upon exercise of warrants		62			700			—		—		—			—			—			700
Conversion of preferred stock to common stock		(13,869	)		(84,191	)		14,845		15		84,176			—			—			—
Issuance of common stock in connection with initial public offering, net of underwriting discounts, commissions and issuance costs		—			—			3,750		4		49,326						—			49,330
Repurchase of fractional shares resulting from reverse stock split		—			—			—		—		(3	)					—			(3	)
Share-based compensation expense		—			—			—		—		2,245						—			2,245
Comprehensive loss
Other comprehensive loss		—			—			—		—		—			(26	)		—			(26	)
Net loss		—			—			—		—		—			—			(709	)		(709	)
Balances, February 28, 2013		—			—			25,424		25	$	360,280			(17	)		(341,195	)		19,093
Exercise of stock options					—			806		1		2,497			—			—			2,498
Vesting of early-exercised stock options		—			—			19		—		7			—			—			7
Vesting of restricted stock units		—			—			18		—		(199	)		—			—			(199	)
Issuance of common stock in connection with the acquisition of ICON		—			—			451		1		8,848						—			8,849
Issuance of common stock in connection with secondary offering, net of underwriting discounts, commissions and issuance costs		—			—			2,107		2		49,087						—			49,089
Share-based compensation expense		—			—			—		—		5,511						—			5,511
Comprehensive income
Other comprehensive gain		—			—			—		—		—			48			—			48
Net loss		—			—			—		—		—			—			(25,072	)		(25,072	)
Balances, February 28, 2014		—		$	—			28,825	$	29	$	426,031		$	31		$	(366,267	)	$	59,824

The accompanying notes are an integral part of these consolidated financial statements.

70

E2OPEN, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

	Years Ended February 28 or 29,
	2014			2013			2012
Cash flows from operating activities:
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		5,511			2,245			727
Depreciation and amortization		3,533			1,616			1,526
Other		112			374			(158	)
Changes in operating assets and liabilities:
Accounts receivable, net		(408	)		(4,366	)		(4,016	)
Prepaid expenses and other current assets		(2,063	)		1,149			(992	)
Accounts payable and accrued liabilities		3,548			2,079			1,912
Deferred revenue		2,417			(3,372	)		428
Other		734			27			(28	)
Net cash used in operating activities		(11,688	)		(957	)		(826	)
Cash flows from investing activities:
Capital expenditures		(213	)		(1,138	)		(1,669	)
Purchases of marketable securities		(32,992	)		(41,541	)		—
Proceeds from sale and maturities of marketable securities		37,242			14,518			—
Payments for acquisition, net of cash acquired		(11,489	)		—			—
Other assets		79			29			(95	)
Net cash used in investing activities		(7,373	)		(28,132	)		(1,764	)
Cash flows from financing activities:
Proceeds from bank credit facilities		5,481			30,300			46,650
Repayments of bank credit facilities		(6,772	)		(39,950	)		(42,460	)
Repayments of notes payable and capital lease obligations		(2,246	)		(2,502	)		(1,124	)
Proceeds from initial public offering and secondary offering, net of underwriting discounts and commissions		50,042			52,313			—
Proceeds from exercise of common stock options		2,498			723			89
Payments of deferred offering costs		(379	)		(2,410	)		(550	)
Repayment of debt assumed in ICON acquisition		(7,126	)		—			—
Payments for fractional shares in connection with reverse stock split		—			(3	)		—
Proceeds from exercise of warrants		—			700			145
Net cash provided by financing activities		41,498			39,171			2,750
Effect of exchange rate changes on cash and cash equivalents		24			(39	)		(1	)
Net increase in cash and cash equivalents		22,461			10,043			159
Cash and cash equivalents at beginning of year		20,262			10,219			10,060
Cash and cash equivalents at end of year	$	42,723		$	20,262		$	10,219
Supplemental cash flow information:
Cash paid during the year for:
Interest	$	256		$	239		$	185
Income taxes	$	121		$	134		$	102
Non-cash investing and financing activities:
Property and equipment acquired under notes payable and capital leases	$	2,839		$	662		$	—
Prepaid software, maintenance and insurance under notes payable and capital leases	$	3,666		$	1,615		$	—
Conversion of preferred stock to common stock upon initial public offering	$	—		$	84,191		$	—
Vesting of early exercised common stock options	$	7		$	37		$	78
Issuance of common stock in connection with acquisition	$	8,849		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

71

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

(1) Organization and Description of Business

E2open, Inc. and subsidiaries (“Company”), a Delaware corporation, was incorporated in September 2003. The Company provides cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. The Company’s customers depend on outsourced manufacturing strategies and complex trading networks to compete in today’s global economy. They use the Company’s solutions to gain visibility into and control over their trading networks. The Company’s solutions enable its customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which its customers rely on as the single version of the truth. The Company’s solutions empower its customers to manage demand they cannot predict and supply they do not control.

The Company acquired ICON-SCM AG (“ICON”) on July 30, 2013 (see note 5 to the consolidated financial statements).

The Company’s corporate headquarters are located in Foster City, California, with additional offices in Austin and Dallas, Texas, China, Finland, France, Germany, Malaysia, Taiwan and the United Kingdom.

Initial Public Offering

On July 31, 2012, the Company closed its initial public offering (“IPO”) of 4,687,500 shares of its common stock, which included 3,750,000 shares of common stock sold by the Company and 937,500 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $15.00 per share. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-179558), which was declared effective by the SEC on July 25, 2012. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the offering to the Company, net of underwriting discounts and commissions of approximately $3.9 million, were approximately $52.3 million. After deducting offering expenses paid by the Company of approximately $3 million, the Company received approximately $49.3 million. Upon the closing of the IPO, all shares of convertible preferred stock outstanding automatically converted into 14,845,528 shares of common stock.

Secondary Offering

On January 29, 2014, the Company closed its secondary offering of 4,660,557 shares of its common stock, which included 2,107,038 shares of common stock sold by the Company and 2,553,519 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $25.00 per share. The offer and sale of all of the shares in the secondary offering were registered under the Securities Act pursuant to a registration statement on Form S-3 (File No. 333-193346 and 333-193526), which was declared effective by the SEC on January 24, 2014. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the secondary offering to the Company, net of underwriting discounts and commissions of approximately $2.6 million were approximately $50.0 million. After deducting offering expenses paid or payable by the Company of approximately $0.9 million, the Company received approximately $49.1 million.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

72

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Change in Accounting Principle

In fiscal 2013, the Company changed its classification of cash flows related to payments made for deferred IPO costs from cash flows from operating activities to cash flows from financing activities in the consolidated statements of cash flows. The Company believes the new classification is preferable because it better correlates the cash flows from the deferred IPO costs with the cash flows from the proceeds to be received from the IPO. In connection with this change in accounting principle, the Company reclassified $550,000 from operating cash flows to financing cash flows for the year ended February 28, 2012.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Such management estimates include reserve for bad debt, goodwill and other long-lived assets, estimates of value of elements of customer arrangements, stock-based compensation, the accounting for income taxes related to deferred tax asset balances and reserves, and the accounting for business combinations. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments in debt securities, and accounts receivable. The Company deposits cash and cash equivalents with high quality financial institutions. Accounts receivable are typically unsecured and are derived from sales of subscriptions and support and professional services, principally to large credit-worthy technology and industrial companies. Credit risk is concentrated primarily in North America, Europe, and parts of Asia. The Company performs ongoing credit evaluations of its customers’ financial condition and has historically experienced insignificant credit losses. The Company maintains allowances for estimated credit losses based on management’s assessment of the likelihood of collection.

Cash and Cash Equivalents and Investments in debt securities

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

The Company classifies all of its investments in debt securities as available-for-sale. Available-for-sale securities that the Company intends to hold for less than one year are classified as short-term investments on the balance sheet, regardless of whether the stated maturity is greater than one year from the current balance sheet date. Investments that the Company intends to hold for more than one year are classified as long-term assets on the balance sheet. Available-for-sale securities are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). For the years ended February 28, 2014 and 2013, realized and unrealized gains and losses on investments were not material. The Company had no investments in debt securities for the year ended February 29, 2012. An impairment charge is recorded in the consolidated statements of operations for declines in fair value below the cost of an individual

73

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

investment that are deemed to be other than temporary. The Company assesses whether a decline in value is temporary based on the length of time that the fair market value has been below cost, the severity of the decline, as well as the intent and ability to hold, or plans to sell, the investment. For the years ended February 28, 2014 and 2013, there was no investment impairment charge recorded in the consolidated statement of operations.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse changes in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs the goodwill impairment test in accordance with guidance issued by the Financial Accounting Standards Board (“FASB”). The guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company did not record any charges related to goodwill impairment for the fiscal year ended February 28, 2014.

Intangible assets

Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, generally 5 years. The straight line method approximates the manner in which cash flows are generated from the intangible assets. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Acquisition-related Expenses

Acquisition-related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally two to three years. Leasehold improvements are amortized using the straight-line method over the remaining lease term or the estimated lives of the assets, if shorter. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is reflected in the consolidated statement of operations. There were no

74

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

material gains or losses from the sale or retirement of property and equipment recorded in the consolidated statements of operations during the fiscal years ended February 28, 2014 and 2013, and February 29, 2012.

Software Development Costs

The Company capitalizes the costs of software used internally in its operations, primarily for the delivery of its cloud-based on-demand software solutions. Such capitalized costs are included in property and equipment for perpetual licenses with a useful life greater than one year, and in prepaid expenses and other current assets for term licenses. The Company capitalized $2.0 million and $1.5 million of internal use software during the years ended February 28, 2014 and 2013. Amortization expense totaled $1.4 million, $1.0 million, and $0.5 million during the years ended February 28, 2014 and 2013, and February 29, 2012. The net book value of capitalized internal use software was $1.3 million, $1.9 million, and $0.6 million as of February 28, 2014 and 2013, and February 29, 2012.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not record any long-lived asset impairment charges during the fiscal year ended February 28, 2014 and 2013, and February 29, 2012.

Indemnification

The Company includes service-level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of service as a director or officer. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid. The Company’s arrangements include provisions indemnifying customers against liabilities if the Company’s products infringe a third-party’s intellectual property rights. The Company has not incurred any costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services and other.

Subscriptions and Support. The Company offers cloud-based on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and

75

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

provides its customers with access to the software solutions, along with data security and storage, backup, and recovery services. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services and Other. Professional services and other revenue is derived primarily from fees for enabling services such as solution consulting and deployment that help the Company’s customers utilize its cloud-based on-demand software solutions. These services are sold in conjunction with the sale of the Company’s solutions. The Company provides professional services on both a fixed-fee and a time-and-materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprising subscriptions and support and professional services and other. Arrangements with customers typically do not provide the customer with the right to take possession of the software underlying the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement. The Company considers a noncancelable agreement signed by it and the customer, or equivalent binding agreement, to be evidence of an arrangement.

Delivery. The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee. The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due .

Collectability of the Fees Is Reasonably Assured. Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each element of an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (“VSOE”) or third party evidence (“TPE”) for the elements of its arrangements, the Company determines the best estimated selling price (“BESP”) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed-fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time-and-material basis is recognized as services are delivered.

In October 2009, the FASB amended the accounting standards for multiple deliverable revenue arrangements. The Company adopted this accounting guidance March 1, 2011 on a prospective basis for

76

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

applicable transactions originating or materially modified after February 28, 2011. Prior to the adoption of this guidance, the Company determined that it did not have objective and reliable evidence of fair value for each deliverable of its arrangements. As a result, the Company accounted for subscriptions and support and professional services revenue as a single unit of accounting and recognized the total arrangement fee ratably over the contractual term of the subscription agreement.

During the year ended February 29, 2012, total revenue as reported and total revenue that would have been reported, if the transactions entered into or materially modified after February 28, 2011 were subject to previous accounting guidance, are shown in the following table (in thousands):

	As reported		Basis as if previous accounting guidance were in effect		Impact of adoption of the new accounting guidance
Total revenues for the year ended February 29, 2012 Subscriptions and support	$	35,816	$	34,831	$	985
Professional services and other		23,871		13,924		9,947
Total	$	59,687	$	48,755	$	10,932

The $10.9 million impact of the adoption of the new accounting guidance was from deferral of revenue on certain arrangements under the previous accounting guidance until the on-demand solutions were fully implemented.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (“PCS”) and professional services. During the post-acquisition period through February 28, 2014, revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Out-of-pocket expenses reimbursed by customers are recorded as revenue and included in professional services and other. The costs of professional services are expensed as incurred and included in cost of revenue.

Deferred revenue comprises amounts that have been invoiced to customers for which revenue has not yet been recognized. Amounts that will not be earned for more than 12 months were $1.6 million, and $1.9 million as of February 28, 2014 and February 28, 2013, and are included in long-term deferred revenue.

The Company excludes from revenue sales and other taxes collected on behalf of customers and remitted to governmental authorities.

Advertising Costs

Advertising costs, which include primarily print materials and sponsorship of events, are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations. Advertising expense for the years ended February 28, 2014, and 2013, and February 29, 2012 was $1.1 million, $1.0 million, and $1.1 million.

Sales Commissions

Sales commissions are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations.

77

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Stock-based Compensation

Stock-based compensation expense associated with awards to employees and directors is measured at the grant date based on the fair value of the award. For time-based awards, the expense is recognized on a straight-line basis over the requisite service period of the award, which is generally four years. For performance-based awards, the expense is recognized on an accelerated basis which results in higher expense at the beginning of the vesting period.

Foreign Currency Translation

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar, except for its subsidiaries located in the United Kingdom and Germany. Accordingly, the consolidated financial statements of those subsidiaries that are maintained in the local currency are remeasured into U.S. dollars at the reporting date. Unrealized exchange gains or losses from the remeasurement of monetary assets and liabilities that are not denominated in U.S. dollars are included as a component of other expense, net in the consolidated statements of operations, and totaled losses of $0.1 million, $0.0 million, and $0.1 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

The functional currency of the Company’s subsidiary in the United Kingdom is the British pound sterling. Assets and liabilities of foreign subsidiaries, where functional currencies are the local currency, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.

Net transaction gains, including gains from foreign currency contracts, recorded in the statements of operations were $0.5 million, $0.2 million, and $0.0 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

Interest and Other Expense, Net

Interest and other expense, net for the periods presented consisted of the following (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
Interest expense	$	253		$	247		$	185
Bank financing fees		68			127			177
Foreign exchange losses—realized and unrealized, net		305			101			261
Losses (gains) from foreign currency forward contracts—realized and unrealized, net		265			60			(204	)
Interest income		(114	)		(97	)		(2	)
Other, net		(15	)		(1	)		(6	)
	$	762		$	437		$	411

78

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Income Taxes

The Company uses the asset and liability method for recording income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards, and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized.

The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Segment Information

The Company reports information about the segments of its business based on how the information is used by the chief operating decision maker. Management evaluates the Company’s performance and makes operating decisions based on consolidated results. Accordingly, the Company operates as one reportable segment.

Recently Issued or Adopted Authoritative Accounting Guidance

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit (“UTB”), or a portion of a UTB, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the UTB should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective prospectively for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. The Company does not expect this guidance to have a material impact on its consolidated financial statements.

79

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

(3) Cash and Investments

The following table presents cash, cash equivalents and available-for-sale investments for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2014:
Cash	$	3,300	$	—	$	—		$	3,300
Cash equivalents:
Money market accounts		11,905		—		—			11,905
Money market funds		19,221		—		—			19,221
Commercial paper		8,296		1		—			8,297
Short-term investments:
Commercial paper		10,492		—		(1	)		10,491
Corporate debt securities		2,378		1		(1	)		2,378
Agency bond		1,504		1		—			1,505
Long-term investments:
Corporate debt securities		3,154		3		(6	)		3,151
Asset-backed securities		250		—		—			250
U.S. government securities		5,005		3		—			5,008
Common trust fund		120		—		(4	)		116
Insurance company contract		16		—		—			16
Total cash, cash equivalents, and investments	$	65,641	$	9	$	(12	)	$	65,638

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total cash, cash equivalents, and investments	$	47,229	$	21	$	(7	)	$	47,243

80

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The following table presents available-for-sale investments, recorded in cash equivalents and investments, by contractual maturity date as of February 28, 2014 (in thousands):

	Amortized Cost		Estimated Fair  Market Value
Maturities in one year or less	$	22,669	$	22,671
Maturities after one year through two years		8,545		8,541
Total	$	31,214	$	31,212

For the year ended February 28, 2014, the realized gains and losses, and unrealized losses on these available-for-sale securities were not material. Additionally, none of these securities were in a continuous unrealized loss position for more than 12 months. As of February 28, 2014, the Company did not consider any of its marketable securities to be other-than-temporarily impaired.

(4) Consolidated Balance Sheet Components

Consolidated balance sheet components as of the years presented consisted of the following (in thousands):

	February 28 or 29,
	2014			2013			2012
Allowance for doubtful accounts:
Balance, beginning of year	$	55		$	24		$	28
Add: Provision for (recovery of) doubtful accounts		28			90			67
Less write-offs against allowance		(5	)		(59	)		(71	)
Balance, end of year	$	78		$	55		$	24

	February 28,
	2014		2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,215	$	1,109
Other prepaid expenses and other current assets		3,165		1,103
	$	4,380	$	2,212

Software licenses, maintenance and insurance premium financed through capital leases and notes payable included above aggregated $5.1 million as of February 28, 2014. Accumulated amortization on software licenses, maintenance, services and insurance premiums aggregated $2.9 million as of February 28, 2014. Amortization of software licenses held under capital leases and notes payable is included in cost of revenue and operating expenses. Prepaid maintenance, services and insurance are expensed over the term of the agreements.

81

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Specific incremental costs directly associated with the Company’s stock offerings primarily legal, accounting and printing costs, were deferred and reflected as an asset until reclassification to stockholders’ equity (deficit) upon closing of the stock offerings.

	February 28,
	2014			2013
Property and equipment, net:
Computer equipment	$	9,569		$	7,718
Software		9,461			8,543
Furniture and fixtures		214			119
Leasehold improvements		511			484
		19,755			16,864
Less accumulated depreciation and amortization		(16,324	)		(14,426	)
	$	3,431		$	2,438

	February 28 or 29,
	2014			2013			2012
Accumulated depreciation and amortization of property and equipment:
Balance, beginning of year	$	14,426		$	14,485		$	21,026
Add: Depreciation and amortization		2,027			1,616			1,526
Less: disposals, write-offs and other		(129	)		(1,675	)		(8,067	)
Balance, end of year	$	16,324		$	14,426		$	14,485

Property and equipment financed through capital leases and notes payable included above aggregated $3.4 million and $0.7 million as of February 28, 2014 and 2013. Accumulated amortization on these assets aggregated $1.0 million and $0.1million as of February 28, 2014 and 2013. Amortization of assets held under capital leases is included with depreciation expense.

	February 28,
	2014		2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	7,494	$	7,701
Trade accounts payable		3,242		1,582
Accrued taxes and other		1,630		1,486
	$	12,366	$	10,769

82

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

(5) Acquisition

On July 30, 2013, the Company acquired all of the outstanding shares of ICON, a market leader in supply chain planning and collaboration, for approximately $26.6 million. The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Transaction costs of $1.2 million for the year ended February 28, 2014 associated with the acquisition of ICON were expensed as incurred and presented as Acquisition-related expenses as a part of operating expenses in the condensed consolidated statements of operations.

Allocation of Consideration Transferred

The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values. The excess of the fair value of consideration transferred over estimated fair value of the net tangible assets and intangible assets was recorded as goodwill. During fiscal 2014, the Company adjusted goodwill associated with the ICON acquisition by $3.1 million from $25.7 million to $22.6 million. The adjustment was primarily attributable to $2.3 million deferred tax liability adjustment and $0.9 million reduction of pre-acquisition accrued liabilities. We also recorded $0.9 million foreign taxes payable with a corresponding receivable from ICON’s previous shareholders. These adjustments were identified during this period resulting from validating and refining the preliminary assumptions and estimates used in establishing the fair values of the acquired identifiable assets and liabilities.

The Company accounted for the ICON acquisition under the purchase method of accounting as a business combination. The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date based on the purchase price allocation (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		1,120
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		16,859
Accounts payable and accrued liabilities		(3,125	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(1,394	)
Other noncurrent liabilities		(46	)
Total liabilities assumed		(12,845	)
Net identifiable assets acquired		4,014
Goodwill		22,556
Total consideration	$	26,570

83

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with the Company’s Business Network, the Company expands its market opportunity and solution portfolio, accelerates its product roadmap, and extends its position as the leader in the collaborative planning and execution space.

As of the date of acquisition, the identifiable intangibles comprise developed technology valued at approximately $7.0 million and customer relationships valued at approximately $5.9 million and are being amortized over the estimated useful life of 5 years. The amortization related to these acquired intangible assets for the year ended February 28, 2014 is $1.5 million. As of February 28, 2014, the remaining amortization period for the acquired intangible assets is approximately 4.4 years. The expected annual amortization expense related to the acquired intangible assets as of February 28, 2014, is as follows (in thousands):

Fiscal year ending:
2015	$	2,580
2016		2,580
2017		2,580
2018		2,580
2019		1,075
Total	$	11,395

ICON’s results of operations have been included in our condensed consolidated financial statements subsequent to the date of acquisition. Revenue recognized attributable to the acquisition of ICON was $4.1 million for the period from the acquisition date of July 30, 2013 through February 28, 2014. Immediately following the acquisition, ICON’s operations in the United States were merged into the Company’s operations and operating costs relative to ICON were not separately tracked; as such, the standalone ICON post-acquisition results of operations are not readily determinable. The unaudited pro forma revenue and net loss for the year ended February 28, 2014 presented below combine the consolidated results of the Company and ICON giving effect to the acquisition of ICON as if it had been completed on March 1, 2012, the beginning of the annual reporting period prior to the year of acquisition. The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of March 1, 2012. The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of ICON’s amortizable assets acquired in the transaction of $1.1 million and $1.9 million in fiscal 2014 and 2013, adjustment to operating expense to reflect acquisition-related costs of $1.2 million in fiscal 2013, and adjustments to net interest expense based upon settlement of debt assumed upon acquisition of $0.2 million and $0.3 million in fiscal 2014 and 2013. The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Year Ended February 28, 2014			Year Ended February 28, 2013
Pro forma revenue	$	75,072		$	85,472
Pro forma net loss		(26,447	)		(8,683	)
Pro forma net loss per share:
Basic		(0.99	)		(0.50	)
Diluted		(0.99	)		(0.50	)

84

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

(6) Credit Facilities

On October 7, 2013, the Company entered into an agreement for a revolving loan facility with a borrowing capacity of up to $20.0 million. Funds available are subject to a borrowing formula which is secured by the Company’s accounts receivable and contracted backlog. This agreement is effective for a period of two years through October 2015. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal prime rate minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is a general obligation of the Company secured by the Company’s tangible and intangible assets, as well as a negative pledge whereby the Company agrees not to give any creditor a security interest on the Company’s intellectual property. There were no borrowings as of and for the year ended February 28, 2014.

ICON maintained bank overdraft facilities with three local banks which were used primarily to fund working capital. The original amount available under the bank overdraft facilities was approximately $2.1 million (€1.6 million). The Company assumed the overdraft facilities upon acquisition of ICON. Since the acquisition, the Company cancelled two of the three facilities, and retained one. As February 28, 2014, the Company has approximately $0.7 million (€0.5 million) of overdraft capacity, with no outstanding balance.

(7) Notes Payable and Capital Lease Obligations

The Company finances the purchase of certain equipment, software and related support and maintenance with notes payable and capital leases. The terms of the notes payable and capital leases range from nine months to three years and the bear interest at rates ranging from 2.77% to 13.13% per annum. Total minimum payments due under notes payable and capital lease obligations as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	3,255
2016		2,308
2017		398
Total minimum payments		5,961
Less: portion representing interest		(367	)
Present value of minimum payments		5,594
Less: current portion		(2,995	)
Total, net of current portion	$	2,599

(8) Transactions with Customers

In fiscal 2014 and 2013, the Company financed equipment and software purchases of $2.6 million and $1.1 million through vendors who are also customers, with capital lease obligations and notes payable. The Company earned $8.6 million or 12.0%, and $3.7 million or 4.9% of total revenue from these customers in fiscal 2014 and 2013. The transactions have been recorded at fair value, and the revenue and services are presented on a gross basis, as the Company received an identifiable benefit in exchange for the consideration, and the fair value of such benefit identified can be reasonably estimated and revenue was collected from the customer in cash.

(9) Related Party Transactions

One of the Company’s directors, Patrick J. O’Malley, III, is the Chief Financial Officer of Seagate Technology Public Limited Company (“Seagate PLC”). Seagate LLC, a wholly owned subsidiary of Seagate

85

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

PLC, is one of the Company’s customers and the Company earned revenue of $3.3 million, $3.4 million, and $1.8 million for fiscal 2014, 2013, and 2012. The Company received payments from Seagate of $4.7 million, $3.1 million, and $2.3 million in the years ended February 28, 2014, and 2013, and February 29, 2012. The Company has outstanding receivables from Seagate of $0.1 million and $1.0 million as of February 28, 2014 and 2013.

(10) Commitments and Contingencies

Payable to Icon shareholders

In accordance with the share purchase agreement for the acquisition of ICON, the Company will place in escrow approximately $5.5 million (€4.0 million) payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period. The Company and the former shareholders have not selected the escrow agent as of February 28, 2014.

Leases

The Company leases its primary office space under noncancelable operating leases with various expiration dates through July 2018. Rent expense for the years ended February 28, 2014, and 2013 and February 29, 2012 was $2.7 million, $1.8 million, and $1.7 million.

Future minimum lease payments under noncancelable operating leases as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	2,431
2016		1,685
2017		1,571
2018		1,454
2019		540
Total minimum lease payments	$	7,681

Several of the operating lease agreements require the Company to provide security deposits. As of February 28, 2014 and February 28, 2013, lease deposits totaled $0.5 million and $0.3 million. The deposits are generally refundable at the expiration of the lease, assuming all of the Company’s obligations under the lease agreement have been met, and are included in other assets in the consolidated balance sheets.

Contingencies

From time to time, the Company is subject to contingent liabilities that arise in the ordinary course of business. The Company records an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not currently believe the resolution of these actions will have a material adverse effect upon the Company’s financial position, results of operations or cash flows.

86

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

(11) Income Taxes

The following table presents the income or loss before income taxes for domestic and foreign operations (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
United States	$	(24,341	)	$	(799	)	$	121
Foreign		(1,232	)		354			(268	)
	$	(25,573	)	$	(445	)	$	(147	)

Income tax expense (benefit) consisted of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Current:
Federal	$	7		$	(24	)	$	(55	)
Foreign		39			260			128
State		1			45			20
Total current tax expense		47			281			93
Deferred:
Federal		—			—			—
Foreign		(547	)		(17	)		(15	)
State		—			—			—
Total deferred tax benefit		(547	)		(17	)		(15	)
Total income tax expense	$	(500	)	$	264		$	78

The income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) as a result of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Federal tax expense (benefit) at statutory rate	$	(8,952	)	$	(156	)	$	(51	)
State income taxes		(582	)		15			189
Foreign rate differential		(31	)		(5	)		42
Nondeductible expenses		871			555			218
Foreign withholding tax		5			36			44
Research and development credits		(728	)		(755	)		(742	)
Expired net operating losses		1,785			1,244			2,548
Other		26			660			689
Change in valuation allowance		7,106			(1,330	)		(2,859	)
Total income tax expense	$	(500	)	$	264		$	78

87

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

There is approximately $1.1 million of undistributed earnings of the Company’s foreign subsidiaries as of February 28, 2014. Federal income taxes in excess of those included for US income tax rules have not been provided for on the unremitted earnings of foreign corporations because such earnings are intended to be permanently reinvested. Upon distribution of those earnings in the form of dividends or otherwise, the Company might be subject to both U.S. Federal and State income taxes (subject to an adjustment for foreign tax credits, where applicable) and withholding taxes payable to various foreign countries.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The types of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Deferred tax assets:
Accruals and reserves	$	1,964		$	2,267
Deferred revenue		2,855			1,684
Stock-based compensation		1,285			284
State income taxes		(1	)		3
Net operating loss carryforwards		97,987			93,992
Property and equipment		975			147
Credit carryforwards		5,212			4,782
Others		1,493			—
Gross deferred tax assets		111,770			103,159
Valuation allowance		(109,014	)		(101,908	)
Total deferred tax assets		2,756			1,251
Deferred tax liabilities:
Business acquisition		(3,385	)		—
Other		—			(1,033	)
Total deferred tax liabilities		(3,385	)		(1,033	)
Net deferred tax assets (liabilities)	$	(629	)	$	218

The authoritative standard issued by FASB related to accounting for income taxes provides for the recognition of deferred tax assets if realization of such assets is more likely than not. As a result of certain realization requirements of ASC 718: Compensation—Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of February 28, 2014 and 2013 that arose directly from tax deductions related to equity compensation recognized for financial reporting. Equity will be increased by $5.7 million if and when such deferred tax assets are ultimately realized. The Company uses tax law ordering when determining when excess tax benefits have been realized. The net valuation allowance increased by approximately $7.1 million during the year ended February 28, 2014, primarily due to generation of NOLs. Realization of deferred tax assets is dependent upon generating sufficient taxable income, carryback of losses, offsetting deferred tax liabilities, and availability of tax planning strategies. As of February 28, 2014, the Company assessed that it is not more likely than not that the Company will ultimately realize the benefit of its net deferred tax assets in any taxing jurisdiction other than China, Germany, Malaysia and United Kingdom. Therefore the Company has recorded a valuation allowance to reduce the carrying value of the deferred tax assets to the amount that is more likely than not to be recognized.

88

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

As of February 28, 2014, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $340.9 million and $69.2 million which begin to expire in fiscal years 2023, and 2015. Furthermore the Company has a net operating loss for Japan income tax purpose of approximately $0.0 million, which will begin to expire in 2014. As of February 28, 2014, the Company had research and development tax credits of approximately $6.0 million and $4.7 million available to reduce future federal and California income taxes respectively. Federal credit carryforwards expire beginning in 2023. California credits carryforward indefinitely.

IRC Section 382 imposes limitations on a corporation’s ability to utilize its NOLs if the corporation experiences an ownership change, as defined. Based upon currently available information, the Company believes there was an ownership change in 2003. As a result, utilization of our U.S. Federal NOLs in future periods will likely be subject to an annual limitation under IRC Section 382. As noted above, as of February 28, 2014, federal and state net operating loss carryforwards for income tax purposes before any Section 382 limitation were approximately $340.9 million and $69.2 million, respectively. Accordingly, we have reduced our deferred tax assets based upon the anticipated federal and state net operating losses that are expected to expire unutilized due to the annual limitation.

As of February 28, 2014, the total amount of gross unrecognized tax benefits was $8.4 million, of which $0.7 million, if recognized, would affect our effective tax rate. As of February 28, 2013, we recorded gross unrecognized tax benefits of $4.5 million of which $0.3 million, if recognized, would affect our effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of February 28, 2014, the total amount of gross interest and penalties accrued was $0.1 million, which is classified as long-term taxes payable in the consolidated balance sheets.

Management believes that it has adequately provided for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. Should any issues addressed in our tax audits be resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income tax in the period such resolution occurs. Although timing of the resolution and/or closure of audits is highly uncertain, we do not believe it is reasonably possible that our unrecognized tax benefits would materially change in the next twelve months.

A reconciliation of the change in gross unrecognized tax benefits, including interest and penalties, is as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Balance, beginning of year	$	4,507		$	3,975
Tax positions related to the current year:
Additions		557			394
Reductions		—			—
Tax positions related to prior year:
Additions		3,381			162
Reductions		(69	)		—
Settlements		—			—
Lapses in statutes of limitations		—			(24	)
Balance, end of year	$	8,376		$	4,507

89

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The Company is subject to taxation in the U.S., various States, and foreign jurisdictions. The 2000 to 2014 tax year’s statute of limitations generally remain open and are subject to U.S. and CA tax examinations. The statutes of limitations in foreign jurisdictions range from four to seven years, and the open tax years subject to examination are from 2007 to 2014.

(12) Stockholders’ Equity

Authorized Capital

In June 2012, the Company’s Certificate of Incorporation was amended and restated to authorize the Company to issue two classes of capital stock to be designated common stock and preferred stock. The total number of shares of all classes of capital stock which the Company is authorized to issue is 110,000,000 shares, consisting of 100,000,000 shares of Common Stock, par value $0.001 per share (“Common Stock”), and 10,000,000 shares of Preferred Stock, par value $0.001 per share ( “Preferred Stock”).

As of February 28, 2014, there were 28,825,098 shares of common stock issued and outstanding and no preferred stock issued or outstanding.

Convertible Preferred Stock

Upon the closing of the Company’s IPO on July 31, 2012, all outstanding convertible preferred stock was converted into 14,845,528 shares of common stock.

(13) Stock-based Compensation

In June 2012, the Board adopted the 2012 Stock Plan (“2012 Plan”), which was subsequently approved by the Company’s stockholders. Upon the completion of the IPO, all shares that were reserved but unissued under the 2003 Stock Plan were assumed by the 2012 Plan. Under the 2012 Plan, the Company has the ability to issue incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units and performance shares to service providers, including employee and directors, upon Board approval. No awards under the 2012 Plan were granted prior to the Company’s IPO. No additional awards will be granted under the 2003 Plan. As of February 28, 2014, there were 5,560,641 shares of common stock reserved for issuance under the 2012 Plan.

Options under the 2012 Plan may be granted for periods of up to 10 years; provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares of common stock on the date of grant, and (ii) the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the underlying shares on the date of grant. Options generally vest 25% on the one-year anniversary of the option grant date, and then monthly for three additional years, and are exercisable for a period of 10 years after the date of grant. RSUs generally vest 25% on the first annual anniversary of the award grant date, and 25% each year thereafter on the annual anniversary of the award grant date for three additional years.

Some options granted are immediately exercisable and any unvested portion of the shares acquired upon early exercise is subject to a right of repurchase by the Company upon the employee’s termination at the original purchase price. The right of repurchase lapses as the options vest, which is generally over the four-year vesting period of the related options. As of February 28, 2013 there were 18,761 shares exercised that were subject to repurchase. The $6,566 aggregate exercise price of the options subject to repurchase as of February 28, 2013 is recorded in Other noncurrent liabilities and were amortized to equity as the options vest. As of February 28, 2014, there were no shares exercised that were subject to repurchase.

90

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the Company’s stock price as well as by certain assumptions including the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behavior, risk-free interest rates, and expected dividends. The estimated grant-date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Years Ended February 28 or 29,
	2014	2013	2012
Expected term (in years)	5.96	6.01	5.84
Expected stock price volatility	49.32% –51.76%	50.0% – 55.0%	49.1% – 54.5%
Risk-free interest rate	0.73% – 1.85%	0.8% – 1.3%	1.1% – 2.6%
Expected dividend yield	—	—	—

The expected term represents the period that stock-based awards are expected to be outstanding, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior as influenced by changes to the terms of the Company’s stock-based awards. The Company estimated the expected term, using the simplified method due to limited exercise data, to be the period of time between the date of grant and the midpoint between option vesting and expiration. The Company estimated the expected volatility of its common stock based on the average of historical and implied volatility of comparable companies from a representative peer group based on industry and market capitalization data. The risk-free interest rate represents the yield on a constant maturity U.S. Treasury security with a term equal to the expected term of the options. Expected dividend yield is set at 0% because the Company does not expect to pay dividends during the term of the option, and historically has not paid any dividends to its stockholders. Management made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

In July 2011, the Company awarded 749,464 stock options that were subject to certain financial performance requirements to be achieved by February 28, 2013, before vesting could occur. The vesting of these stock options was also dependent upon the employees’ continued employment after February 28, 2013. In March 2012, the Board of Directors approved a modification of the financial performance requirements. At the date of the modification, the Company determined that the achievement of the modified performance requirements was probable and, accordingly, the recording of compensation cost related to the modified awards commenced. Prior to this date, the Company had not recognized compensation expense associated with these grants because the Company believed that, based on the then-current and expected operational results, it was not probable that the associated financial performance requirements would be achieved. The modified financial performance requirements were achieved by February 28, 2013. The unrecognized compensation cost related to these options is $0.8 million as of February 28, 2014, and is being recognized over the remaining vesting term of three years from the measurement date of February 28, 2013.

In July, September, November 2013, and February 2014, the Company awarded 125,250, 287,500, 40,000, and 29,000 restricted stock units that are subject to certain financial performance requirements before vesting can occur. The vesting of these stock options is also dependent upon the employees’ continued employment after February 28, 2014. The Company records compensation expense related to these awards based on the estimated probability of achievement of the financial performance requirements. The compensation cost related to the awards deemed probable of vesting amounting to $0.7 million and was recorded in the condensed consolidated statement of operations for the year ended February 28, 2014. The unrecognized compensation cost related to the awards is $1.9 million as of February 28, 2014, and is being recognized over the remaining vesting term of these awards ranging from six to eighteen months from the measurement date of February 28, 2014.

91

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Stock Options:

Activity under the Company’s stock option plans for the years presented is as follows:

	Number of shares			Weighted average exercise price per share		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		865,875			18.84
Options exercised		(805,776	)		3.10
Options canceled and forfeited		(492,650	)		8.12
Balance of options outstanding, February 28, 2014		2,241,784		$	9.86		7.97 years
Balance of options expected to vest, February 28, 2013		2,485,050		$	4.41		7.94 years
Balance of options exercisable, February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest, February 28, 2014		2,179,660			9.71		7.95 years
Balance of options exercisable, February 28, 2014		841,902			6.38		7.29 years

The weighted average grant date fair value of the employee stock options granted during the years ended February 28, 2014 and 2013, and February 29, 2012 was $18.84, $12.98 and $3.50.

The intrinsic value of employee stock options exercised during the years ended February 28, 2014 and 2013, and February 29, 2012 was $13.0 million, $8.3 million and $0.8 million. The intrinsic value of vested shares as of February 28, 2014 and 2013, and February 29, 2012 was $18.0 million, $17.2 million and $7.4 million.

As of February 28, 2014, the number of unvested options was 1,399,882.

As of February 28, 2014, the Company had $7.7 million of unrecognized compensation costs excluding estimated forfeitures, related to unvested stock option awards, which are expected to be recognized over a weighted average period of 2.46 years.

Restricted Stock Units:

Activity under the Company’s RSU plans for the years presented is as follows:

	Number of shares			Weighted average  grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28, 2013		118,500		$	14.42		3.62 years
Awards granted		537,214			21.00
Awards released		(26,371	)		22.66
Awards canceled and forfeited		(61,148	)		18.42
Balance of awards outstanding, February 28, 2014		568,195		$	19.83		2.11 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, February 28, 2014		520,774		$	19.83		2.11 years
Balance of awards vested, February 28, 2014		—		$	—		—

92

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The weighted average grant date fair value per share of the RSUs granted during the year ended February 28, 2014 and 2013 was $21.00 and $14.40.

The intrinsic value of outstanding RSUs as of February 28, 2014 was $15.8 million.

Total compensation expense for these awards recorded in the condensed consolidated statement of operations for the year ended February 28, 2014 and 2013 was $1.3 million and $0.1 million. The unrecognized compensation expense related to these RSUs was $3.5 million as of February 28, 2014 which is expected to be recognized over a weighted average period of 2.11 years.

Total share-based compensation:

Total compensation expense recorded for share-based payments amounted to $5.5 million, $2.2 million and $0.7 million for the years ended February 28, 2014 and 2013 and February 29, 2012. No compensation cost was capitalized during the years ended February 28, 2014, February 28, 2013 and February 29, 2012.

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Cost of revenue	$	1,641	$	621	$	203
Research and development		460		184		84
Sales and marketing		2,035		749		259
General and administrative		1,375		691		181
	$	5,511	$	2,245	$	727

(14) Net Loss Per Share

Basic net loss per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income by the weighted-average number of common shares outstanding, including potential dilutive common stock equivalents using the treasury stock method.

93

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):

	Years Ended February 28 or 29,
	2014			2013			2012
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Basic shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
	$	26,415		$	17,490		$	5,918
Diluted shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: Weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
		26,415			17,490			5,918
Net loss per share:
Basic	$	(0.95	)	$	(0.04	)	$	(0.04	)
Diluted	$	(0.95	)	$	(0.04	)	$	(0.04	)

The following outstanding shares, options, awards and warrants were excluded from the computation of diluted net loss per share in the periods presented because including them would have had an antidilutive effect (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Options to purchase common stock		1,276		2,038		999
Convertible preferred stock		—		—		14,771
Preferred stock warrants		—		—		189
Unvested common shares subject to repurchase		—		57		126
Restricted stock units		379		47		—

(15) Fair Value Measurements

As a basis for considering such assumptions, accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs such as quoted prices in an active market;

Level 2—Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and

Level 3—Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

94

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of February 28, 2014 and 2013 are summarized as follows (in thousands):

	February 28, 2014
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	11,905	$	—		$	—	$	11,905
Money market funds		19,221		—			—		19,221
Commercial paper		—		8,297			—		8,297
Short-term investments:
Commercial paper		—		10,491			—		10,491
Corporate debt securities		—		2,378			—		2,378
Agency bond		—		1,505			—		1,505
Other current assets:
Foreign currency forward contracts		—		60			—		60
Long-term investments:
Corporate debt securities		—		3,151			—		3,151
Asset backed securities		—		250			—		250
U.S. government securities		5,008		—			—		5,008
Common trust fund		—		116			—		116
Insurance company contract		—		16			—		16
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	36,150	$	26,264		$	—	$	62,414
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(163	)		—		(163	)
Total liabilities	$	—	$	(163	)	$	—	$	(163	)

95

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

	February 28, 2013
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	2,501	$	—		$	—	$	2,501
Money market funds		3,879		—			—		3,879
Commercial paper		—		12,446			—		12,446
Short-term investments:
Commercial paper		—		12,323			—		12,323
Corporate debt securities		—		2,375			—		2,375
Mortgage backed securities		—		591			—		591
Other current assets:
Foreign currency forward contracts		—		4			—		4
Long-term investments:
Corporate debt securities		—		5,990			—		5,990
Asset backed securities		—		3,046			—		3,046
Mortgage backed securities		—		1,805			—		1,805
Municipal debt securities		—		851			—		851
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(158	)		—		(158	)
Total liabilities	$	—	$	(158	)	$	—	$	(158	)

The fair values of the Company’s Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair values of the Company’s Level 2 financial instruments are based on quoted market prices for comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company’s foreign currency forward contracts are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

96

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

For the years ended February 28, 2014 and February 28, 2013, the Company sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The contracts are classified as Level 2. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of February 28, 2014 and February 28, 2013.

	As of February 28, 2014								As of February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value
									(Unaudited)
	(Dollars in thousands, except average contract rate)
Foreign currency forward exchange contracts:
Euro	$	7,401			1.4	$	(256	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(2,146	)		3.2		(59	)		(2,255	)		3.1		(8	)
British Pound		(4,317	)		1.6		212			—			—		—
Total	$	938				$	(103	)	$	5,067				$	(154	)

The Company entered into the foreign exchange contracts with two counterparties. The Company has the right of offset for gains earned and losses incurred under contracts with the same counterparty, and therefore has recorded contracts with the same counterparty on a net basis in the balance sheet.

The Company does not use derivatives for speculative or trading purposes.

(16) Significant Customer Information

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

	Years Ended February 28 or 29,
	2014					2013						2012
	Percentage of total revenue		Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable
Customer A		*		24	%		12	%		16	%		15	%		11	%
Customer B		*		20			*			16			*			*
Customer C		*		*			15			13			17			14

* Indicates less than 10%

Revenue from Customer C in fiscal 2013 and 2014 included revenue associated with a material modification to an existing agreement that resulted in recognition of revenue earlier than would otherwise have occurred.

97

E2OPEN, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Years Ended February 28, 2014, February 28, 2013 and February 29, 2012

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Americas	$	57,501	$	59,884	$	49,064
Europe		12,950		14,394		9,151
Asia		790		660		1,472
	$	71,241	$	74,938	$	59,687

Countries accounting for 10% or more of revenue were as follows (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
United States		74.8	%		64.0	%		61.8	%
Canada		*			16.5			19.8
United Kingdom		*			12.1			12.2

* Indicates less than 10%

(17) Selected Quarterly Financial Information (Unaudited)

The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of fiscal 2014 and 2013:

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012		May 31, 2012
	(Dollars in thousands, except per share data)
Total revenue	$	19,370		$	18,260		$	18,012		$	15,599		$	17,611		$	18,963		$	22,891	$	15,473
Total cost of revenue		7,533			7,486			7,189			6,585			6,092			5,866			5,662		5,692
Total gross profit		11,837			10,774			10,823			9,014			11,519			13,097			17,229		9,781
Net income (loss)		(6,373	)		(7,382	)		(5,923	)		(5,394	)		(2,815	)		(82	)		4,566		(2,378	)
Net income (loss) per share (A)
Basic		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.33		(0.38	)
Diluted		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.19		(0.38	)
Weighted average shares used to compute net income (loss) per share:
Basic		27,497			26,545			26,018			25,615			25,178			25,021			13,875		6,190
Diluted		27,497			26,545			26,018			25,615			25,178			25,021			24,421		6,190

(A) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

98

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on the evaluation of our disclosure controls and procedures as of February 28, 2014, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 9B. OTHER INFORMATION

None.

99

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item concerning our executive officers is set forth under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this Annual Report on Form 10-K.

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer and principal financial officer. The Code of Business Conduct and Ethics is posted on our investor relations website at http://investor.e2open.com/governance.cfm. Any substantive amendments to or waivers of the Code of Business Conduct and Ethics relating to the directors or officers of the Company will be disclosed promptly on our website.

The information required by this item will be set forth in the proxy statement to be filed with the SEC within 120 days after the end of the fiscal year ended February 28, 2014 in connection with our 2014 annual meeting of stockholders (“Proxy Statement”), and is incorporated in this report by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information, if any, required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

100

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as a part of this Annual Report on Form 10-K:

(a) Financial Statements: See Index to Consolidated Financial Statements as Item 8 herein.

(b) Financial Statement Schedules: The schedules are either not applicable or the required information is presented in the consolidated financial statements or notes thereto.

(c) Exhibits: The exhibits incorporated by reference or filed as a part of this Annual Report on Form 10-K are listed in the Exhibit Index immediately following the signatures to this report.

101

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 2, 2014.

E2OPEN, INC.
By:	/s/ Mark E. Woodward
	Mark E. Woodward President and Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark E. Woodward and Peter J. Maloney, jointly and severally, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K and any or all amendments, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark E. Woodward Mark E. Woodward	Director, President and Chief Executive Officer (Principal Executive Officer)	May 2, 2014
/s/ Peter J. Maloney Peter J. Maloney	Chief Financial Officer (Principal Financial and Accounting Officer)	May 2, 2014
/s/ John B. Mumford John B. Mumford	Chairman of the Board of Directors	May 2, 2014
/s/ Carl Bass Carl Bass	Director	May 2, 2014
/s/ Bernard F. Mathaisel Bernard F. Mathaisel	Director	May 2, 2014
/s/ Nicholas G. Moore Nicholas G. Moore	Director	May 2, 2014
/s/ Patrick J. O’Malley, III Patrick J. O’Malley, III	Director	May 2, 2014
/s/ Stephen M. Ward, Jr. Stephen M. Ward, Jr.	Director	May 2, 2014

102

EXHIBIT INDEX

2.1(1)	Share Purchase Agreement between ICON-SCM AG and the Company, dated July 30, 2013.
3.1(2)	Amended and Restated Certificate of Incorporation of the Registrant.
3.4(2)	Amended and Restated Bylaws of the Registrant.
4.1(2)	Specimen Common Stock Certificate of the Registrant.
4.2(3)	Registration Rights Agreement, dated June 27, 2005, as amended.
10.1#(2)	Form of Director and Executive Officer Indemnification Agreement.
10.2#(3)	2003 Stock Plan, as amended and forms of option agreements thereunder.
10.3#(2)	2012 Equity Compensation Plan and forms of agreements thereunder.
10.4#(4)	Offer Letter to Mark E. Woodward, dated June 20, 2008.
10.5#(4)	Offer Letter to Peter J. Maloney, dated December 26, 2007.
10.6#(4)	Addendum to Offer Letter to Peter J. Maloney, dated June 10, 2008.
10.8#(4)	Offer Letter to David W. Packer, dated August 18, 2008, as amended.
10.9#(4)	Offer Letter to Michael A. Schmitt, dated December 13, 2010.
10.10#(4)	Offer Letter to Robert Schoenthaler, dated June 18, 2007.
10.12(4)	Lease Agreement by and between Bayside Towers, Inc. and the Registrant, dated May 7, 2009.
10.13(4)	Office Building Lease by and between TPG—Great Hills Plaza LLC and Registrant, dated September 2, 2005, as amended.
10.14(4)	Office Lease Agreement by and between Teachers Insurance and Annuity Association of America and Registrant, dated April 27, 2005, as amended.
10.15(4)	Tenancy Agreement by and between Inter Heritage (M) Sdn. Bhd. and E2open Development Corporation, a subsidiary of the Registrant, dated November 19, 2007, as amended.
10.16(4)	License for Use of ASMEC Facilities by and between Asmec Management Associates Ltd and Registrant, dated March 30, 2007, as amended.
10.17(4)	Fourth Amended and Restated Business Financing Agreement by and between Bridge Bank, National Association and Registrant, dated April 30, 2010.
10.18(4)	Intellectual Property Security Agreement by and between Bridge Bank, National Association and Registrant, dated April 30, 2010.
10.19(4)	Master Services Agreement by and between Equinix Operating Co., Inc. and Registrant, dated May 7, 2004, as amended.
10.20#(5)	Form of Change in Control Severance Agreement to be entered into with the Company’s executive officers.
10.21*	Amendment Number One to Business Financing Agreement by and between Bridge Bank, National Association and Registrant, dated February 21, 2014.
21.1(4)	List of Subsidiaries of the Registrant.
23.1*	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.2*	Consent of KPMG LLP, Independent Registered Public Accounting Firm.
31.1*	Certification of the Principal Executive Officer of E2open, Inc. pursuant to rule 13a-14 and 15d-14(a) under the Securities Exchange Act of 1934, as amended.

31.2*	Certification of the Principal Financial Officer of E2open, Inc. pursuant to rule 13a-14 and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1*	Certification of the Chief Executive Officer of E2open, Inc. pursuant to18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS†	XBRL Instance Document
101.SCH†	XBRL Taxonomy Schema Linkbase Document
101.CAL†	XBRL Taxonomy Calculation Linkbase Document
101.DEF†	XBRL Taxonomy Definition Linkbase Document
101.LAB†	XBRL Taxonomy Labels Linkbase Document
101.PRE†	XBRL Taxonomy Presentation Linkbase Document

* Filed herewith

† In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections.

# Indicates a management contract or compensatory plan.

(1) Incorporated by reference from Exhibit 10.1 to the Company’s quarterly report on Form 10-Q (No. 001-35598), as filed with the Securities and Exchange Commission on October 10, 2013.

(2) Incorporated by reference from the Company’s registration statement on Form S-1 (No. 333-179558), Amendment No. 3, as filed with the Securities and Exchange Commission on July 2, 2012.

(3) Incorporated by reference from the Company’s registration statement on Form S-1 (No. 333-179558), as filed with the Securities and Exchange Commission on February 17, 2012.

(4) Incorporated by reference from the Company’s registration statement on Form S-1 (No. 333-179558), Amendment No. 1, as filed with the Securities and Exchange Commission on May 4, 2012.

(5) Incorporated by reference from the Company’s registration statement on Form S-1 (No. 333-179558), Amendment No. 4, as filed with the Securities and Exchange Commission on July 13, 2012.

EX-10.21

Exhibit 10.21

AMENDMENT NUMBER ONE TO BUSINESS FINANCING AGREEMENT

This AMENDMENT NUMBER ONE TO BUSINESS FINANCING AGREEMENT (this “Amendment”), dated as of February 21, 2014, is entered into by and between BRIDGE BANK, NATIONAL ASSOCIATION (“Lender”), and E2OPEN, INC., a Delaware corporation (“Borrower”), with reference to the following facts:

A. Borrower and Lender previously entered into that certain Business Financing Agreement, dated as of October 7, 2013 (the “Agreement”);

B. Borrower has requested that Lender (1) eliminate the cap on total consideration that Borrower may pay for Permitted Acquisitions, and (2) permit cash maintained outside of the United States to exceed $2,000,000; and

C. Lender has agreed with such requests, subject to the terms and conditions of this Amendment.

NOW, THEREFORE, in consideration of the foregoing, Lender and Borrower hereby agree as follows:

1. Defined Terms. All initially capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.

2. Amendments to Section 1.1. The following definitions set forth in Section 1.1 of the Agreement are hereby amended in their entirety as follows:

“Permitted Acquisition” means any acquisition (a) by Borrower of all of the Ownership Interests of any Person or (y) by Borrower or any of its wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Ownership Interests of, or a business line or unit or a division of, any Person; provided that:

(i) immediately prior to, and after giving effect thereto, no Event of Default or Default shall have occurred and be continuing or would result therefrom;

(ii) all transactions in connection therewith shall be consummated in accordance with all applicable laws and in conformity with the requirements of all applicable laws;

(iii) Borrower shall have taken, or caused to be taken, as of the date of such acquisition, each of the actions set forth in Sections 5.16;

(iv) Borrower shall be in compliance with the financial covenants set forth in Sections 5.13 on a pro forma basis after giving effect to such acquisition as of the last day of the fiscal quarter most recently ended for which the financial statements are available;

(v) Borrower shall have delivered to Lender (A) at least 30 days prior to such proposed acquisition, (i) a Compliance Certificate evidencing compliance with Section 5.16 on a pro forma basis as required under clause (iv) above, (ii) all relevant financial information with respect to such acquired assets, including, without limitation, the aggregate consideration for such acquisition and any other information required to demonstrate compliance with Section 5.16, and (iii) annual Adjusted EBITDA sufficient to service any Acquired Debt, earn-out payments and seller-carry-back

1

Subordinated Debt, and (B) promptly upon request by Lender, (i) a copy of the purchase agreement related to the proposed Permitted Acquisition (and any related documents reasonably requested by Lender) and a summary thereof with a description of the acquisition, price of acquisition (to include cash and non-cash portions, including earn-outs, etc.), and (ii) quarterly and annual financial statements of the Person whose Ownership Interests or assets are being acquired for the twelve month (12) month period immediately prior to such proposed Permitted Acquisition, including any audited financial statements that are available;

(vi) any Person or assets or division as acquired in accordance herewith shall be in the same or substantially similar business or lines of business in which Borrower and/or its subsidiaries are engaged as of the Closing Date;

(vii) the assets being acquired are located within the United States or the Person whose Ownership Interests are being acquired is organized in a jurisdiction located within the United States; provided that if the assets being acquired are not located within the United States or the Person whose Ownership Interests are being acquired is organized in a jurisdiction located outside the United States, then concurrent with the closing of the Permitted Acquisition, Borrower shall grant to Lender a security interest in 64% of the issued and outstanding Ownership Interests of such foreign Person entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Ownership Interests of such foreign Person not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2));

(viii) any seller carryback Debt incurred in connection with the proposed acquisition shall be Subordinate Debt, shall contain no covenants, and shall otherwise be on terms and conditions (including maturity, rate of interest and amortization) acceptable to Lender in its sole and absolute discretion;

(ix) other than seller carryback Debt permitted under clause (viii) above, no other Indebtedness will be incurred, assumed, or would exist with respect to Borrower or its subsidiaries as a result of such acquisition, other than Acquired Debt, and no Liens will be incurred, assumed, or would exist with respect to the Assets of any Borrower or its Subsidiaries as a result of such acquisition other than Permitted Liens; and

(x) such Permitted Acquisition shall be non-hostile and the applicable seller shall have taken all corporate, partnership or limited liability company, as applicable, action necessary to authorize the execution and delivery of the applicable purchase agreement and purchase documents, and the consummation of the transactions contemplated thereby.

“Revolving Interest Rate” means (a) with respect to Advances against Eligible Receivables, a per annum rate equal to the Prime Rate minus 0.25 percentage points, and (b) with respect to Advances against Unbilled Eligible Receivables, a per annum rate equal to the Prime Rate plus 0.25 percentage points. After an Event of Default, the outstanding principal balance of all Revolving Advances shall accrue interest at the Default Rate.

3. Amendment to Section 5.8. Section 5.8 of the Agreement is hereby amended in its entirety as follows:

5.8 Accounts. Maintain its primary banking relationship with Lender and, in the case of any deposit accounts not maintained with Lender, grant to Lender a first priority perfected security interest in and “control” (within

2

the meaning of Section 9104 of the California Uniform Commercial Code) of such deposit account pursuant to documentation acceptable to Lender. Without limiting the generality of the foregoing, Borrower shall, at all times, maintain an average monthly account balance of not less than $4,500,000 in unrestricted cash, cash equivalents and investments on deposit with Lender.

4. Replacement Exhibit D. Exhibit D attached to the Agreement is hereby replace with Exhibit D attached to this Amendment.

5. Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment is subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction of Lender:

(a) Lender shall have received (i) this Amendment, duly executed by Borrower, and (ii) the Acknowledgment and Agreement of Guarantors attached hereto, duly executed by each Guarantor;

(b) No Event of Default or Default shall have occurred and be continuing; and

(c) All of the representations and warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).

6. Representations and Warranties. In order to induce Lender to enter into this Amendment, Borrower hereby represents and warrants to Lender that:

(a) No Event of Default or Default is continuing;

(b) All of the representations and warranties set forth herein and in the Agreement are true, complete and accurate in all respects (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement); and

(c) This Amendment has been duly executed and delivered by Borrower, and the Agreement continues to constitute the legal, valid and binding agreements and obligations of Borrower, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, and similar laws and equitable principles affecting the enforcement of creditors’ rights generally.

7. Counterparts; Telefacsimile Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

8. Integration. The Agreement as amended by this Amendment constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and thereof, and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.

3

9. No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default, whether or not known to Lender and whether or not existing on the date of this Amendment.

10. Release.

(a) Borrower and each Guarantor signing the Acknowledgment and Agreement of Guarantors set forth below hereby absolutely and unconditionally releases and forever discharges Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Borrower or such Guarantor has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. Borrower and each Guarantor signing the Acknowledgment and Agreement of Guarantors set forth below certifies that it has read the following provisions of California Civil Code Section 1542:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

(b) Borrower and each Guarantor signing the Acknowledgment and Agreement of Guarantors set forth below understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if it should eventually suffer additional damages arising out of the facts referred to above, it will not be able to make any claim for those damages. Furthermore, Borrower and each Guarantor signing the Acknowledgment and Agreement of Guarantors set forth below acknowledges that it intends these consequences even as to claims for damages that may exist as of the date of this release but which it does not know exist, and which, if known, would materially affect its decision to execute this Agreement, regardless of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

11. Reaffirmation of the Agreement. The Agreement as amended hereby remains in full force and effect.

[remainder of page intentionally left blank]

4

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first hereinabove written.

E2OPEN, INC.,
a Delaware corporation
By	/s/ PETER J. MALONEY
Name:	Peter J. Maloney
Title:	Chief Financial Officer
BRIDGE BANK, NATIONAL ASSOCIATION
By	/s/ MIKE CALVELLO
Name:	Mike Calvello
Title:	Assistant Vice President, Capital Finance Division

Amendment Number One to Business Financing Agreement

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

Each of the undersigned, a guarantor of the obligations of E2Open, Inc., a Delaware corporation (“Borrower”), owing to Bridge Bank, National Association (“Lender”), pursuant to the separate Guaranty of each (“Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the terms (including without limitation the release set forth in Section 10 of the Amendment) and execution thereof; (iii) reaffirms all obligations to Lender pursuant to the terms of its Guaranty; and (iv) acknowledges that Lender may amend, restate, extend, renew or otherwise modify the Loan Documents and any indebtedness or agreement of Borrower, or enter into any agreement or extend additional or other credit accommodations, without notifying or obtaining the consent of the undersigned and without impairing the obligations of the undersigned under its Guaranty.

E2OPEN DEVELOPMENT CORPORATION,
a Delaware corporation
By	/s/ PETER J. MALONEY
Name:	Peter J. Maloney
Title:	Chief Financial Officer
GELSILICON, INC.
a Delaware corporation
By	/s/ PETER J. MALONEY
Name:	Peter J. Maloney
Title:	Chief Financial Officer

Amendment Number One to Business Financing Agreement

EXHIBIT D

EXISTING INDEBTEDNESS

[see attached]

Amendment Number One to Business Financing Agreement

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-183330 and 333-188259 on Form S-8 of our report dated May 2, 2014, relating to the consolidated financial statements for the fiscal year ended February 28, 2014 of E2open, Inc. and subsidiaries, appearing in this Annual Report on Form 10-K of E2open, Inc. for the year ended February 28, 2014.

/s/ DELOITTE & TOUCHE LLP

San Jose, California

May 2, 2014

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

The Board of Directors

E2open, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-193346) and (333-193526) on Form S-3 and (No. 333-183330) on Form S-8 of E2open, Inc. of our report dated April 30, 2013, with respect to the consolidated balance sheet of E2open, Inc. as of February 28, 2013, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended February 28, 2013, which report appears in the February 28, 2014 annual report on Form 10-K of E2open, Inc. Our report refers to a change in the method of classifying payments made for deferred initial public offering costs and a change in the method of accounting for revenue arrangements with multiple deliverables.

/s/ KPMG LLP

Santa Clara, California

May 2, 2014

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934, as amended.

I, Mark E. Woodward, certify that:

1. I have reviewed this Annual Report on Form 10-K of E2open, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2014

/s/ Mark E. Woodward

Mark E. Woodward

President, Chief Executive Officer and

Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934, as amended.

I, Peter J. Maloney, certify that:

1. I have reviewed this Annual Report on Form 10-K of E2open, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2014

/s/ Peter J. Maloney

Peter J. Maloney

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of E2open, Inc. for the year ended February 28, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Mark E. Woodward, as Chief Executive Officer of E2open, Inc., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of E2open, Inc.

Date: May 2, 2014	By:	/s/ MARK E. WOODWARD
		Mark E. Woodward
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

In connection with the Annual Report on Form 10-K of E2open, Inc. for the year ended February 28, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Peter J. Maloney, as Chief Financial Officer of E2open, Inc., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of E2open, Inc.

Date: May 2, 2014	By:	/s/ PETER J. MALONEY
		Peter J. Maloney
		Chief Financial Officer
		(Principal Financial Officer)

XML

Total Revenue as Reported and Total Revenue that would have been Reported (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2013	May 31, 2013	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Item Effected [Line Items]
Revenues	$ 19,370	$ 18,260	$ 18,012	$ 15,599	$ 17,611	$ 18,963	$ 22,891	$ 15,473	$ 71,241	$ 74,938	$ 59,687
Subscription and Support
Item Effected [Line Items]
Revenues											35,816
Professional services and other
Item Effected [Line Items]
Revenues									14,803	31,145	23,871
Previous Accounting Guidance
Item Effected [Line Items]
Revenues											48,755
Previous Accounting Guidance | Subscription and Support
Item Effected [Line Items]
Revenues											34,831
Previous Accounting Guidance | Professional services and other
Item Effected [Line Items]
Revenues											13,924
Accounting Guidance
Item Effected [Line Items]
Revenues											10,932
Accounting Guidance | Subscription and Support
Item Effected [Line Items]
Revenues											985
Accounting Guidance | Professional services and other
Item Effected [Line Items]
Revenues											$ 9,947

XML

Transactions with Customers - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Vendor
Payables To Customers [Line Items]
Revenue	$ 8.6	$ 3.7
Revenue from vendors percent of total revenue	12.00%	4.90%
Equipment And Software
Payables To Customers [Line Items]
Notes payable and capital lease obligations	$ 2.6	$ 1.1

XML

Summary of Estimated Fair Values of Assets and Liabilities Assumed at Date of Acquisition Based on Purchase Price Allocation (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014
Business Acquisition [Line Items]
Cash and cash equivalents	$ 923
Accounts receivable	1,274
Prepaid expenses and other current assets	1,120
Long-term investments	354
Property and equipment	61
Identifiable intangible assets	12,900
Other assets	227
Total identifiable assets acquired	16,859
Accounts payable and accrued liabilities	(3,125)
Deferred revenue	(1,154)
Convertible bond and long-term debt	(7,126)
Deferred tax liability	(1,394)
Other noncurrent liabilities	(46)
Total liabilities assumed	(12,845)
Net identifiable assets acquired	4,014
Goodwill	22,556
Total consideration	$ 26,570

XML

Computation of Basic and Diluted Net Loss Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2013	May 31, 2013	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Net loss	$ (6,373)	$ (7,382)	$ (5,923)	$ (5,394)	$ (2,815)	$ (82)	$ 4,566	$ (2,378)	$ (25,072)	$ (709)	$ (225)
Basic shares:
Weighted average common shares outstanding									26,415	17,547	6,165
Less: weighted average unvested common shares subject to repurchase or cancellation										(57)	(247)
Basic	27,497	26,545	26,018	25,615	25,178	25,021	13,875	6,190	26,415	17,490	5,918
Diluted shares:
Weighted average common shares outstanding									26,415	17,547	6,165
Less: weighted average unvested common shares subject to repurchase or cancellation										(57)	(247)
Diluted	27,497	26,545	26,018	25,615	25,178	25,021	24,421	6,190	26,415	17,490	5,918
Net loss per share:
Basic	$ (0.23)	$ (0.28)	$ (0.23)	$ (0.21)	$ (0.11)		$ 0.33	$ (0.38)	$ (0.95)	$ (0.04)	$ (0.04)
Diluted	$ (0.23)	$ (0.28)	$ (0.23)	$ (0.21)	$ (0.11)		$ 0.19	$ (0.38)	$ (0.95)	$ (0.04)	$ (0.04)

XML

Related Party Transactions - Additional Information (Detail) (Seagate LLC, USD $) In Millions, unless otherwise specified	12 Months Ended
	Feb. 28, 2014 Customer	Feb. 28, 2013	Feb. 29, 2012
Seagate LLC
Related Party Transaction [Line Items]
Number of customer payment received	1
Revenue earned	$ 3.3	$ 3.4	$ 1.8
Related party transactions payments received	4.7	3.1	2.3
Outstanding receivables	$ 0.1	$ 1.0

XML

Components of Purchase Consideration (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended	12 Months Ended
	Jul. 30, 2013	Feb. 28, 2014
Business Acquisition [Line Items]
Cash payment	$ 12,412
Acquisition costs payable to seller, to be placed in escrow	5,309
Shares of the Company's common stock	8,849	8,849
Total	$ 26,570

XML

Net Loss Per Share (Tables)

12 Months Ended

Feb. 28, 2014

Computation of Basic and Diluted Net Loss per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):

	Years Ended February 28 or 29,
	2014			2013			2012
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Basic shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
	$	26,415		$	17,490		$	5,918
Diluted shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: Weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
		26,415			17,490			5,918
Net loss per share:
Basic	$	(0.95	)	$	(0.04	)	$	(0.04	)
Diluted	$	(0.95	)	$	(0.04	)	$	(0.04	)

Computation of Diluted Net Loss Per Share Excluding Shares Options and Warrants

The following outstanding shares, options, awards and warrants were excluded from the computation of diluted net loss per share in the periods presented because including them would have had an antidilutive effect (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Options to purchase common stock		1,276		2,038		999
Convertible preferred stock		—		—		14,771
Preferred stock warrants		—		—		189
Unvested common shares subject to repurchase		—		57		126
Restricted stock units		379		47		—

XML

Summary of Foreign Exchange Contracts Details (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013
Derivative [Line Items]
Notional Sell (Buy)	$ 938	$ 5,067
Estimated Fair Value	(103)	(154)
Sell | Euro
Derivative [Line Items]
Notional Sell (Buy)	7,401	7,322
Average Contract Rate	1.4	1.3
Estimated Fair Value	(256)	(146)
Buy | Malaysian Ringgit
Derivative [Line Items]
Notional Sell (Buy)	(2,146)	(2,255)
Average Contract Rate	3.2	3.1
Estimated Fair Value	(59)	(8)
Buy | British Pounds
Derivative [Line Items]
Notional Sell (Buy)	(4,317)
Average Contract Rate	1.6
Estimated Fair Value	$ 212

XML

Future Minimum Lease Payments under Noncancelable Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014
Operating Leased Assets [Line Items]
2015	$ 2,431
2016	1,685
2017	1,571
2018	1,454
2019	540
Total minimum lease payments	$ 7,681

XML

Summary of Revenue by Country Wise (Detail)	12 Months Ended
	Feb. 28, 2014		Feb. 28, 2013	Feb. 29, 2012
United States
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage	74.80%		64.00%	61.80%
Canada
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage		[1]	16.50%	19.80%
United Kingdom
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage		[1]	12.10%	12.20%

[1] Indicates less than 10%

XML

Summary of Quarterly Financial Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2013	May 31, 2013	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Quarterly Financial Information [Line Items]
Total revenue	$ 19,370	$ 18,260	$ 18,012	$ 15,599	$ 17,611	$ 18,963	$ 22,891	$ 15,473	$ 71,241	$ 74,938	$ 59,687
Total cost of revenue	7,533	7,486	7,189	6,585	6,092	5,866	5,662	5,692	28,793	23,312	21,630
Total gross profit	11,837	10,774	10,823	9,014	11,519	13,097	17,229	9,781	42,448	51,626	38,057
Net income (loss)	$ (6,373)	$ (7,382)	$ (5,923)	$ (5,394)	$ (2,815)	$ (82)	$ 4,566	$ (2,378)	$ (25,072)	$ (709)	$ (225)
Net income (loss) per share
Basic	$ (0.23)	$ (0.28)	$ (0.23)	$ (0.21)	$ (0.11)		$ 0.33	$ (0.38)	$ (0.95)	$ (0.04)	$ (0.04)
Diluted	$ (0.23)	$ (0.28)	$ (0.23)	$ (0.21)	$ (0.11)		$ 0.19	$ (0.38)	$ (0.95)	$ (0.04)	$ (0.04)
Weighted average shares used to compute net income (loss) per share:
Basic	27,497	26,545	26,018	25,615	25,178	25,021	13,875	6,190	26,415	17,490	5,918
Diluted	27,497	26,545	26,018	25,615	25,178	25,021	24,421	6,190	26,415	17,490	5,918

XML

Outstanding Shares, Options and Warrants Excluded from Computation of Diluted Net Income (Loss) Per Share (Detail) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Option to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities	1,276	2,038	999
Preferred stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities			189
Unvested common shares subject to repurchase
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities		57	126
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities	379	47
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities			14,771

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Feb. 28, 2014

Total Revenue as Reported and Total Revenue that would have been Reported

During the year ended February 29, 2012, total revenue as reported and total revenue that would have been reported, if the transactions entered into or materially modified after February 28, 2011 were subject to previous accounting guidance, are shown in the following table (in thousands):

	As reported		Basis as if previous accounting guidance were in effect		Impact of adoption of the new accounting guidance
Total revenues for the year ended February 29, 2012 Subscriptions and support	$	35,816	$	34,831	$	985
Professional services and other		23,871		13,924		9,947
Total	$	59,687	$	48,755	$	10,932

Interest and Other Expense, Net

Interest and other expense, net for the periods presented consisted of the following (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
Interest expense	$	253		$	247		$	185
Bank financing fees		68			127			177
Foreign exchange losses—realized and unrealized, net		305			101			261
Losses (gains) from foreign currency forward contracts—realized and unrealized, net		265			60			(204	)
Interest income		(114	)		(97	)		(2	)
Other, net		(15	)		(1	)		(6	)
	$	762		$	437		$	411

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Adjusted Unaudited Pro Forma Financial Results (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Pro forma revenue	$ 75,072	$ 85,472
Pro forma net loss	$ (26,447)	$ (8,683)
Basic	$ (0.99)	$ (0.50)
Diluted	$ (0.99)	$ (0.50)

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Schedule of Available-For-Sale Investments by Contractual Maturity Date (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	$ 31,214
Estimated Fair Market Value	31,212
Maturities in one year or less
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	22,669
Estimated Fair Market Value	22,671
Maturities after one year through two years
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	8,545
Estimated Fair Market Value	$ 8,541

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Summary of Revenue by Geographic Region (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2013	May 31, 2013	Feb. 28, 2013	Nov. 30, 2012	Aug. 31, 2012	May 31, 2012	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total	$ 19,370	$ 18,260	$ 18,012	$ 15,599	$ 17,611	$ 18,963	$ 22,891	$ 15,473	$ 71,241	$ 74,938	$ 59,687
Americas
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total									57,501	59,884	49,064
Europe
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total									12,950	14,394	9,151
Asia
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total									$ 790	$ 660	$ 1,472

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Organization and Description of Business - Additional Information (Detail) (USD $)	12 Months Ended		1 Months Ended		1 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Jul. 31, 2012 IPO	Jul. 31, 2012 IPO Common Stock Sold by Stockholders	Jan. 29, 2014 Secondary Offering	Jan. 29, 2014 Secondary Offering Common Stock Sold by Stockholders
Organization And Description Of Business [Line Items]
Total number of common stock sold in public offering			4,687,500		4,660,557
Common stock sold in public offering			3,750,000		2,107,038
Common stock sold by selling stockholders in public offering				937,500		2,553,519
Public offering price of shares sold			$ 15.00		$ 25.00
Gross proceeds from initial public offering			$ 52,300,000
Underwriting discounts and commissions			3,900,000		2,600,000
Accrued offering cost			3,000,000		900,000
Net proceeds from public offering after underwriting discounts, commission and offering expenses	49,089,000	49,330,000	49,300,000		49,100,000
Convertible preferred stock converted in to number of common stock			14,845,528
Gross proceeds from offering	$ 50,042,000	$ 52,313,000			$ 50,000,000

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Notes Payable and Capital Lease Obligations - Additional Information (Detail)	12 Months Ended
	Feb. 28, 2014
Lease Commitments And Notes Payable [Line Items]
Minimum interest rates	2.77%
Maximum interest rates	13.13%
Minimum
Lease Commitments And Notes Payable [Line Items]
Term of notes	Nine months
Maximum
Lease Commitments And Notes Payable [Line Items]
Term of notes	Three years

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Stock Options Activity (Detail) (USD $)	1 Months Ended	12 Months Ended
	Jul. 01, 2011	Feb. 28, 2014	Feb. 28, 2013
Number of shares
Balance of options outstanding, beginning balance		2,674,335
Options granted	749,464	865,875
Options exercised		(805,776)
Options canceled and forfeited		(492,650)
Balance of options outstanding, ending balance		2,241,784	2,674,335
Balance of options expected to vest		2,179,660	2,485,050
Balance of options exercisable		841,902	1,005,204
Weighted average exercise price
Balance of options outstanding, beginning balance		$ 4.59
Options granted		$ 18.84
Options exercised		$ 3.10
Options canceled and forfeited		$ 8.12
Balance of options outstanding, ending balance		$ 9.86	$ 4.59
Balance of options expected to vest		$ 9.71	$ 4.41
Balance of options exercisable		$ 6.38	$ 2.68
Weighted average remaining term
Balance of options outstanding		7 years 11 months 19 days	8 years
Balance of options expected to vest		7 years 11 months 12 days	7 years 11 months 9 days
Balance of options exercisable		7 years 3 months 15 days	7 years 11 days

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Income Tax Expense Difference from Amounts Computed by Applying U.S Federal Income Tax Rate (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Reconciliation of Statutory Federal Tax Rate [Line Items]
Federal tax expense (benefit) at statutory rate	$ (8,952)	$ (156)	$ (51)
State income taxes	(582)	15	189
Foreign rate differential	(31)	(5)	42
Nondeductible expenses	871	555	218
Foreign withholding tax	5	36	44
Research and development credits	(728)	(755)	(742)
Expired net operating losses	1,785	1,244	2,548
Other	26	660	689
Change in valuation allowance	7,106	(1,330)	(2,859)
Total income tax expense	$ (500)	$ 264	$ 78

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Components of Purchase Consideration (Parenthetical) (Detail)	1 Months Ended
	Jul. 30, 2013
Business Acquisition [Line Items]
Common stock issued, shares	451,593

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Cash and Investments

12 Months Ended

Feb. 28, 2014

Cash and Investments

(3) Cash and Investments

The following table presents cash, cash equivalents and available-for-sale investments for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2014:
Cash	$	3,300	$	—	$	—		$	3,300
Cash equivalents:
Money market accounts		11,905		—		—			11,905
Money market funds		19,221		—		—			19,221
Commercial paper		8,296		1		—			8,297
Short-term investments:
Commercial paper		10,492		—		(1	)		10,491
Corporate debt securities		2,378		1		(1	)		2,378
Agency bond		1,504		1		—			1,505
Long-term investments:
Corporate debt securities		3,154		3		(6	)		3,151
Asset-backed securities		250		—		—			250
U.S. government securities		5,005		3		—			5,008
Common trust fund		120		—		(4	)		116
Insurance company contract		16		—		—			16
Total cash, cash equivalents, and investments	$	65,641	$	9	$	(12	)	$	65,638
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total cash, cash equivalents, and investments	$	47,229	$	21	$	(7	)	$	47,243

The following table presents available-for-sale investments, recorded in cash equivalents and investments, by contractual maturity date as of February 28, 2014 (in thousands):

	Amortized Cost		Estimated Fair  Market Value
Maturities in one year or less	$	22,669	$	22,671
Maturities after one year through two years		8,545		8,541
Total	$	31,214	$	31,212

For the year ended February 28, 2014, the realized gains and losses, and unrealized losses on these available-for-sale securities were not material. Additionally, none of these securities were in a continuous unrealized loss position for more than 12 months. As of February 28, 2014, the Company did not consider any of its marketable securities to be other-than-temporarily impaired.

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Summary of Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013
Deferred tax assets:
Accruals and reserves	$ 1,964	$ 2,267
Deferred revenue	2,855	1,684
Stock-based compensation	1,285	284
State income taxes	(1)	3
Net operating loss carryforwards	97,987	93,992
Property and equipment	975	147
Credit carryforwards	5,212	4,782
Others	1,493
Gross deferred tax assets	111,770	103,159
Valuation allowance	(109,014)	(101,908)
Total deferred tax assets	2,756	1,251
Deferred tax liabilities:
Business acquisition	(3,385)
Other		(1,033)
Total deferred tax liabilities	(3,385)	(1,033)
Net deferred tax assets (liabilities)	$ (629)	$ 218

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Components of Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Allowance for doubtful accounts:
Balance, beginning of year	$ 55	$ 24	$ 28
Add: Provision for (recovery of) doubtful accounts	28	90	67
Less write-offs against allowance	(5)	(59)	(71)
Balance, end of year	78	55	24
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	1,215	1,109
Other prepaid expenses and other current assets	3,165	1,103
Prepaid expenses and other current assets	4,380	2,212
Property and equipment, net:
Property and equipment	19,755	16,864
Less accumulated depreciation and amortization	(16,324)	(14,426)	(14,485)
Property and equipment net	3,431	2,438
Accumulated depreciation and amortization of property and equipment:
Balance, beginning of year	14,426	14,485	21,026
Add: Depreciation and amortization	2,027	1,616	1,526
Less: disposals, write-offs and other	(129)	(1,675)	(8,067)
Balance, end of year	16,324	14,426	14,485
Accounts payable and accrued liabilities:
Accrued compensation costs	7,494	7,701
Trade accounts payable	3,242	1,582
Accrued taxes and other	1,630	1,486
Total accounts payable and accrued liabilities	12,366	10,769
Computer Equipment
Property and equipment, net:
Property and equipment	9,569	7,718
Software
Property and equipment, net:
Property and equipment	9,461	8,543
Furniture and Fixtures
Property and equipment, net:
Property and equipment	214	119
Leasehold Improvements
Property and equipment, net:
Property and equipment	$ 511	$ 484

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Notes Payable and Capital Lease Obligations (Tables)

12 Months Ended

Feb. 28, 2014

Schedule of Principal Payments on Notes Payable and Capital Lease Obligations

bear interest at rates ranging from 2.77% to 13.13% per annum. Total minimum payments due under notes payable and capital lease obligations as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	3,255
2016		2,308
2017		398
Total minimum payments		5,961
Less: portion representing interest		(367	)
Present value of minimum payments		5,594
Less: current portion		(2,995	)
Total, net of current portion	$	2,599

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Acquisition (Tables)

12 Months Ended

Feb. 28, 2014

Components of Purchase Consideration

The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Summary of Estimated Fair Values of Assets and Liabilities Assumed at Date of Acquisition Based on Purchase Price Allocation

The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date based on the purchase price allocation (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		1,120
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		16,859
Accounts payable and accrued liabilities		(3,125	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(1,394	)
Other noncurrent liabilities		(46	)
Total liabilities assumed		(12,845	)
Net identifiable assets acquired		4,014
Goodwill		22,556
Total consideration	$	26,570

Annual Amortization Expense Related to Acquired Intangible Assets

The expected annual amortization expense related to the acquired intangible assets as of February 28, 2014, is as follows (in thousands):

Fiscal year ending:
2015	$	2,580
2016		2,580
2017		2,580
2018		2,580
2019		1,075
Total	$	11,395

Adjusted Unaudited Pro Forma Financial Results

The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Year Ended February 28, 2014			Year Ended February 28, 2013
Pro forma revenue	$	75,072		$	85,472
Pro forma net loss		(26,447	)		(8,683	)
Pro forma net loss per share:
Basic		(0.99	)		(0.50	)
Diluted		(0.99	)		(0.50	)

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Commitments and Contingencies - Additional Information (Detail)	12 Months Ended
	Feb. 28, 2014 USD ($)	Feb. 28, 2013 USD ($)	Feb. 29, 2012 USD ($)	Feb. 28, 2014 EUR (€)	Feb. 28, 2014 Operating Lease USD ($)	Feb. 28, 2013 Operating Lease USD ($)
Commitment And Contingencies [Line Items]
Acquisition payable to seller	$ 5,473,000			€ 4,000,000
Rent expense	2,700,000	1,800,000	1,700,000
Noncancelable operating leases expiration date	July 2018
Security deposits					$ 500,000	$ 300,000

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Consolidated Balance Sheet Components - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013
Software
Balance Sheet Components [Line Items]
Capital leased assets	$ 5.1
Accumulated amortization	2.9
Property and equipment financed through capital leases and notes payable
Balance Sheet Components [Line Items]
Capital leased assets	3.4	0.7
Less accumulated depreciation and amortization	$ 1.0	$ 0.1

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Commitments and Contingencies (Tables)

12 Months Ended

Feb. 28, 2014

Future Minimum Lease Payments Under Noncancelable Operating Leases

Future minimum lease payments under noncancelable operating leases as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	2,431
2016		1,685
2017		1,571
2018		1,454
2019		540
Total minimum lease payments	$	7,681

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Income Taxes (Tables)

12 Months Ended

Feb. 28, 2014

Income (Loss) Before Income Taxes for Domestic and Foreign Operations

The following table presents the income or loss before income taxes for domestic and foreign operations (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
United States	$	(24,341	)	$	(799	)	$	121
Foreign		(1,232	)		354			(268	)
	$	(25,573	)	$	(445	)	$	(147	)

Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consisted of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Current:
Federal	$	7		$	(24	)	$	(55	)
Foreign		39			260			128
State		1			45			20
Total current tax expense		47			281			93
Deferred:
Federal		—			—			—
Foreign		(547	)		(17	)		(15	)
State		—			—			—
Total deferred tax benefit		(547	)		(17	)		(15	)
Total income tax expense	$	(500	)	$	264		$	78

Income Tax Expense Difference from Amounts Computed by Applying U.S Federal Income Tax Rate

The income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) as a result of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Federal tax expense (benefit) at statutory rate	$	(8,952	)	$	(156	)	$	(51	)
State income taxes		(582	)		15			189
Foreign rate differential		(31	)		(5	)		42
Nondeductible expenses		871			555			218
Foreign withholding tax		5			36			44
Research and development credits		(728	)		(755	)		(742	)
Expired net operating losses		1,785			1,244			2,548
Other		26			660			689
Change in valuation allowance		7,106			(1,330	)		(2,859	)
Total income tax expense	$	(500	)	$	264		$	78

Summary of Deferred Tax Assets and Liabilities

The types of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Deferred tax assets:
Accruals and reserves	$	1,964		$	2,267
Deferred revenue		2,855			1,684
Stock-based compensation		1,285			284
State income taxes		(1	)		3
Net operating loss carryforwards		97,987			93,992
Property and equipment		975			147
Credit carryforwards		5,212			4,782
Others		1,493			—
Gross deferred tax assets		111,770			103,159
Valuation allowance		(109,014	)		(101,908	)
Total deferred tax assets		2,756			1,251
Deferred tax liabilities:
Business acquisition		(3,385	)		—
Other		—			(1,033	)
Total deferred tax liabilities		(3,385	)		(1,033	)
Net deferred tax assets (liabilities)	$	(629	)	$	218

Reconciliation of Change in Gross Unrecognized Tax Benefits, Including Interest and Penalties

A reconciliation of the change in gross unrecognized tax benefits, including interest and penalties, is as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Balance, beginning of year	$	4,507		$	3,975
Tax positions related to the current year:
Additions		557			394
Reductions		—			—
Tax positions related to prior year:
Additions		3,381			162
Reductions		(69	)		—
Settlements		—			—
Lapses in statutes of limitations		—			(24	)
Balance, end of year	$	8,376		$	4,507

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Summary of Significant Accounting Policies

12 Months Ended

Feb. 28, 2014

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Change in Accounting Principle

In fiscal 2013, the Company changed its classification of cash flows related to payments made for deferred IPO costs from cash flows from operating activities to cash flows from financing activities in the consolidated statements of cash flows. The Company believes the new classification is preferable because it better correlates the cash flows from the deferred IPO costs with the cash flows from the proceeds to be received from the IPO. In connection with this change in accounting principle, the Company reclassified $550,000 from operating cash flows to financing cash flows for the year ended February 28, 2012.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Such management estimates include reserve for bad debt, goodwill and other long-lived assets, estimates of value of elements of customer arrangements, stock-based compensation, the accounting for income taxes related to deferred tax asset balances and reserves, and the accounting for business combinations. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments in debt securities, and accounts receivable. The Company deposits cash and cash equivalents with high quality financial institutions. Accounts receivable are typically unsecured and are derived from sales of subscriptions and support and professional services, principally to large credit-worthy technology and industrial companies. Credit risk is concentrated primarily in North America, Europe, and parts of Asia. The Company performs ongoing credit evaluations of its customers’ financial condition and has historically experienced insignificant credit losses. The Company maintains allowances for estimated credit losses based on management’s assessment of the likelihood of collection.

Cash and Cash Equivalents and Investments in debt securities

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

The Company classifies all of its investments in debt securities as available-for-sale. Available-for-sale securities that the Company intends to hold for less than one year are classified as short-term investments on the balance sheet, regardless of whether the stated maturity is greater than one year from the current balance sheet date. Investments that the Company intends to hold for more than one year are classified as long-term assets on the balance sheet. Available-for-sale securities are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). For the years ended February 28, 2014 and 2013, realized and unrealized gains and losses on investments were not material. The Company had no investments in debt securities for the year ended February 29, 2012. An impairment charge is recorded in the consolidated statements of operations for declines in fair value below the cost of an individual investment that are deemed to be other than temporary. The Company assesses whether a decline in value is temporary based on the length of time that the fair market value has been below cost, the severity of the decline, as well as the intent and ability to hold, or plans to sell, the investment. For the years ended February 28, 2014 and 2013, there was no investment impairment charge recorded in the consolidated statement of operations.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse changes in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs the goodwill impairment test in accordance with guidance issued by the Financial Accounting Standards Board (“FASB”). The guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company did not record any charges related to goodwill impairment for the fiscal year ended February 28, 2014.

Intangible assets

Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, generally 5 years. The straight line method approximates the manner in which cash flows are generated from the intangible assets. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Acquisition-related Expenses

Acquisition-related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally two to three years. Leasehold improvements are amortized using the straight-line method over the remaining lease term or the estimated lives of the assets, if shorter. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is reflected in the consolidated statement of operations. There were no material gains or losses from the sale or retirement of property and equipment recorded in the consolidated statements of operations during the fiscal years ended February 28, 2014 and 2013, and February 29, 2012.

Software Development Costs

The Company capitalizes the costs of software used internally in its operations, primarily for the delivery of its cloud-based on-demand software solutions. Such capitalized costs are included in property and equipment for perpetual licenses with a useful life greater than one year, and in prepaid expenses and other current assets for term licenses. The Company capitalized $2.0 million and $1.5 million of internal use software during the years ended February 28, 2014 and 2013. Amortization expense totaled $1.4 million, $1.0 million, and $0.5 million during the years ended February 28, 2014 and 2013, and February 29, 2012. The net book value of capitalized internal use software was $1.3 million, $1.9 million, and $0.6 million as of February 28, 2014 and 2013, and February 29, 2012.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not record any long-lived asset impairment charges during the fiscal year ended February 28, 2014 and 2013, and February 29, 2012.

Indemnification

The Company includes service-level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of service as a director or officer. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid. The Company’s arrangements include provisions indemnifying customers against liabilities if the Company’s products infringe a third-party’s intellectual property rights. The Company has not incurred any costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services and other.

Subscriptions and Support. The Company offers cloud-based on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and provides its customers with access to the software solutions, along with data security and storage, backup, and recovery services. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services and Other. Professional services and other revenue is derived primarily from fees for enabling services such as solution consulting and deployment that help the Company’s customers utilize its cloud-based on-demand software solutions. These services are sold in conjunction with the sale of the Company’s solutions. The Company provides professional services on both a fixed-fee and a time-and-materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprising subscriptions and support and professional services and other. Arrangements with customers typically do not provide the customer with the right to take possession of the software underlying the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement. The Company considers a noncancelable agreement signed by it and the customer, or equivalent binding agreement, to be evidence of an arrangement.

Delivery. The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee. The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due .

Collectability of the Fees Is Reasonably Assured. Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each element of an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (“VSOE”) or third party evidence (“TPE”) for the elements of its arrangements, the Company determines the best estimated selling price (“BESP”) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed-fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time-and-material basis is recognized as services are delivered.

In October 2009, the FASB amended the accounting standards for multiple deliverable revenue arrangements. The Company adopted this accounting guidance March 1, 2011 on a prospective basis for applicable transactions originating or materially modified after February 28, 2011. Prior to the adoption of this guidance, the Company determined that it did not have objective and reliable evidence of fair value for each deliverable of its arrangements. As a result, the Company accounted for subscriptions and support and professional services revenue as a single unit of accounting and recognized the total arrangement fee ratably over the contractual term of the subscription agreement.

During the year ended February 29, 2012, total revenue as reported and total revenue that would have been reported, if the transactions entered into or materially modified after February 28, 2011 were subject to previous accounting guidance, are shown in the following table (in thousands):

	As reported		Basis as if previous accounting guidance were in effect		Impact of adoption of the new accounting guidance
Total revenues for the year ended February 29, 2012 Subscriptions and support	$	35,816	$	34,831	$	985
Professional services and other		23,871		13,924		9,947
Total	$	59,687	$	48,755	$	10,932

The $10.9 million impact of the adoption of the new accounting guidance was from deferral of revenue on certain arrangements under the previous accounting guidance until the on-demand solutions were fully implemented.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (“PCS”) and professional services. During the post-acquisition period through February 28, 2014, revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Out-of-pocket expenses reimbursed by customers are recorded as revenue and included in professional services and other. The costs of professional services are expensed as incurred and included in cost of revenue.

Deferred revenue comprises amounts that have been invoiced to customers for which revenue has not yet been recognized. Amounts that will not be earned for more than 12 months were $1.6 million, and $1.9 million as of February 28, 2014 and February 28, 2013, and are included in long-term deferred revenue.

The Company excludes from revenue sales and other taxes collected on behalf of customers and remitted to governmental authorities.

Advertising Costs

Advertising costs, which include primarily print materials and sponsorship of events, are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations. Advertising expense for the years ended February 28, 2014, and 2013, and February 29, 2012 was $1.1 million, $1.0 million, and $1.1 million.

Sales Commissions

Sales commissions are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations.

Stock-based Compensation

Stock-based compensation expense associated with awards to employees and directors is measured at the grant date based on the fair value of the award. For time-based awards, the expense is recognized on a straight-line basis over the requisite service period of the award, which is generally four years. For performance-based awards, the expense is recognized on an accelerated basis which results in higher expense at the beginning of the vesting period.

Foreign Currency Translation

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar, except for its subsidiaries located in the United Kingdom and Germany. Accordingly, the consolidated financial statements of those subsidiaries that are maintained in the local currency are remeasured into U.S. dollars at the reporting date. Unrealized exchange gains or losses from the remeasurement of monetary assets and liabilities that are not denominated in U.S. dollars are included as a component of other expense, net in the consolidated statements of operations, and totaled losses of $0.1 million, $0.0 million, and $0.1 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

The functional currency of the Company’s subsidiary in the United Kingdom is the British pound sterling. Assets and liabilities of foreign subsidiaries, where functional currencies are the local currency, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.

Net transaction gains, including gains from foreign currency contracts, recorded in the statements of operations were $0.5 million, $0.2 million, and $0.0 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

Interest and Other Expense, Net

Interest and other expense, net for the periods presented consisted of the following (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
Interest expense	$	253		$	247		$	185
Bank financing fees		68			127			177
Foreign exchange losses—realized and unrealized, net		305			101			261
Losses (gains) from foreign currency forward contracts—realized and unrealized, net		265			60			(204	)
Interest income		(114	)		(97	)		(2	)
Other, net		(15	)		(1	)		(6	)
	$	762		$	437		$	411

Income Taxes

The Company uses the asset and liability method for recording income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards, and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized.

The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Segment Information

The Company reports information about the segments of its business based on how the information is used by the chief operating decision maker. Management evaluates the Company’s performance and makes operating decisions based on consolidated results. Accordingly, the Company operates as one reportable segment.

Recently Issued or Adopted Authoritative Accounting Guidance

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit (“UTB”), or a portion of a UTB, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the UTB should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective prospectively for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. The Company does not expect this guidance to have a material impact on its consolidated financial statements.

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Stock-based Compensation (Tables)

12 Months Ended

Feb. 28, 2014

Schedule of Estimated Grant Date Fair Values Employee Stock Options Assumptions

The estimated grant-date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Years Ended February 28 or 29,
	2014	2013	2012
Expected term (in years)	5.96	6.01	5.84
Expected stock price volatility	49.32% –51.76%	50.0% – 55.0%	49.1% – 54.5%
Risk-free interest rate	0.73% – 1.85%	0.8% – 1.3%	1.1% – 2.6%
Expected dividend yield	—	—	—

Stock Options Activity

Activity under the Company’s stock option plans for the years presented is as follows:

	Number of shares			Weighted average exercise price per share		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		865,875			18.84
Options exercised		(805,776	)		3.10
Options canceled and forfeited		(492,650	)		8.12
Balance of options outstanding, February 28, 2014		2,241,784		$	9.86		7.97 years
Balance of options expected to vest, February 28, 2013		2,485,050		$	4.41		7.94 years
Balance of options exercisable, February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest, February 28, 2014		2,179,660			9.71		7.95 years
Balance of options exercisable, February 28, 2014		841,902			6.38		7.29 years

Restricted Stock Units Activity

Activity under the Company’s RSU plans for the years presented is as follows:

	Number of shares			Weighted average  grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28, 2013		118,500		$	14.42		3.62 years
Awards granted		537,214			21.00
Awards released		(26,371	)		22.66
Awards canceled and forfeited		(61,148	)		18.42
Balance of awards outstanding, February 28, 2014		568,195		$	19.83		2.11 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, February 28, 2014		520,774		$	19.83		2.11 years
Balance of awards vested, February 28, 2014		—		$	—		—

Functional Classification of Stock-Based Compensation Expense

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Cost of revenue	$	1,641	$	621	$	203
Research and development		460		184		84
Sales and marketing		2,035		749		259
General and administrative		1,375		691		181
	$	5,511	$	2,245	$	727

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Interest and Other Expense, Net (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Interest Expense [Line Items]
Interest expense	$ 253	$ 247	$ 185
Bank financing fees	68	127	177
Foreign exchange losses-realized and unrealized, net	305	101	261
Losses (gains) from foreign currency forward contracts-realized and unrealized, net	265	60	(204)
Interest income	(114)	(97)	(2)
Other, net	(15)	(1)	(6)
Interest and other expense, net	$ 762	$ 437	$ 411

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Schedule of Principal Payments on Notes Payable and Capital Lease Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013
Debt Instrument [Line Items]
Total	$ 5,961
Less: portion representing interest	(367)
Present value of minimum payments	5,594
Less: current portion	(2,995)
Total, net of current portion	2,599
2015
Debt Instrument [Line Items]
Total	3,255
2016
Debt Instrument [Line Items]
Total	2,308
2017
Debt Instrument [Line Items]
Total	$ 398

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	$ 62,414	$ 45,827
Fair value liabilities	(163)	(158)
Cash equivalents | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	11,905	2,501
Cash equivalents | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	19,221	3,879
Cash equivalents | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	8,297	12,446
Long-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	3,151	5,990
Long-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	250	3,046
Long-term investments | Common Trust Fund
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	116
Long-term investments | Insurance Company Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16
Long-term investments | U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	5,008
Long-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		1,805
Long-term investments | Municipal debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		851
Other current assets | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	60	4
Other noncurrent assets | Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16	16
Other current liabilities | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value liabilities	(163)	(158)
Short-term investments | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	10,491	12,323
Short-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,378	2,375
Short-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		591
Agency bond | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,505
Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	36,150	6,396
Level 1 | Cash equivalents | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	11,905	2,501
Level 1 | Cash equivalents | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	19,221	3,879
Level 1 | Long-term investments | U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	5,008
Level 1 | Other noncurrent assets | Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16	16
Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	26,264	39,431
Fair value liabilities	(163)	(158)
Level 2 | Cash equivalents | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	8,297	12,446
Level 2 | Long-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	3,151	5,990
Level 2 | Long-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	250	3,046
Level 2 | Long-term investments | Common Trust Fund
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	116
Level 2 | Long-term investments | Insurance Company Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16
Level 2 | Long-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		1,805
Level 2 | Long-term investments | Municipal debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		851
Level 2 | Other current assets | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	60	4
Level 2 | Other current liabilities | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value liabilities	(163)	(158)
Level 2 | Short-term investments | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	10,491	12,323
Level 2 | Short-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,378	2,375
Level 2 | Short-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		591
Level 2 | Agency bond | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	$ 1,505

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Consolidated Balance Sheets(USD ($)) In Thousands, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013
Current assets:
Cash and cash equivalents	$ 42,723	$ 20,262
Short-term investments	14,374	15,289
Accounts receivable, net of allowance of $78 and $55	21,995	20,670
Prepaid expenses and other current assets	4,380	2,212
Total current assets	83,472	58,433
Long-term investments	8,541	11,692
Goodwill	22,556
Intangible assets, net	11,395
Property and equipment, net	3,431	2,438
Other assets	1,316	905
Total Assets	130,711	73,468
Current liabilities:
Accounts payable and accrued liabilities	12,366	10,769
Deferred revenue	43,672	39,789
Payable to ICON shareholders	5,473
Current portion of notes payable and capital lease obligations	2,995	849
Total current liabilities	64,506	51,407
Deferred revenue	1,587	1,898
Notes payable and capital lease obligations, net of current portion	2,599	562
Other noncurrent liabilities	2,195	508
Total liabilities	70,887	54,375
Commitments and contingencies (note 10)
Stockholders' equity
Preferred stock, $0.001 par value. 10,000 authorized shares, no shares issued and outstanding
Common stock, $0.001 par value. 100,000 shares authorized, 28,825 and 25,424 shares issued and outstanding as of February 28, 2014 and 2013	29	25
Additional paid-in capital	426,031	360,280
Accumulated other comprehensive income (loss)	31	(17)
Accumulated deficit	(366,267)	(341,195)
Total stockholders' equity	59,824	19,093
Total liabilities and stockholders' equity	$ 130,711	$ 73,468

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Acquisition - Additional information (Detail) (USD $)	1 Months Ended	12 Months Ended						1 Months Ended	12 Months Ended
	Jul. 30, 2013	Feb. 28, 2014	Feb. 28, 2014 ICON	Feb. 28, 2013 ICON	Jul. 30, 2013 Developed technology	Jul. 30, 2013 Customer relationship	Feb. 28, 2014 Previously Reported	Jul. 30, 2013 Finite-Lived Intangible Assets	Feb. 28, 2014 Finite-Lived Intangible Assets
Business Acquisition [Line Items]
Initial purchase consideration for icon-scm	$ 26,570,000
Acquisition expenses		1,182,000	1,182,000
Goodwill adjustment		(3,100,000)
Goodwill		22,556,000					25,700,000
Business combination, adjustment attributable to deferred tax asset		2,300,000
Business combination, reduction of pre-acquisition accrued liabilities		(900,000)
Business combination, adjustment for foreign taxes payable with a corresponding receivable from previous shareholders		900,000
Identifiable intangibles		12,900,000			7,000,000	5,900,000
Estimated useful life of identifiable intangible assets								5 years
Amortization of acquired intangibles		688,000							1,500,000
Remaining amortization period for acquired intangible assets		4 years 4 months 24 days
Revenues earned since acquisition date			4,100,000
Identifiable intangible assets acquired			1,100,000	1,900,000
Business acquisition interest expense			$ 200,000	$ 300,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Cash flows from operating activities:
Net loss	$ (25,072)	$ (709)	$ (225)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	5,511	2,245	727
Depreciation and amortization	3,533	1,616	1,526
Other	112	374	(158)
Changes in operating assets and liabilities:
Accounts receivable, net	(408)	(4,366)	(4,016)
Prepaid expenses and other current assets	(2,063)	1,149	(992)
Accounts payable and accrued liabilities	3,548	2,079	1,912
Deferred revenue	2,417	(3,372)	428
Other	734	27	(28)
Net cash used in operating activities	(11,688)	(957)	(826)
Cash flows from investing activities:
Capital expenditures	(213)	(1,138)	(1,669)
Purchases of marketable securities	(32,992)	(41,541)
Proceeds from sale and maturities of marketable securities	37,242	14,518
Payments for acquisition, net of cash acquired	(11,489)
Other assets	79	29	(95)
Net cash used in investing activities	(7,373)	(28,132)	(1,764)
Cash flows from financing activities:
Proceeds from bank credit facilities	5,481	30,300	46,650
Repayments of bank credit facilities	(6,772)	(39,950)	(42,460)
Repayments of notes payable and capital lease obligations	(2,246)	(2,502)	(1,124)
Proceeds from initial public offering and secondary offering, net of underwriting discounts and commissions	50,042	52,313
Proceeds from exercise of common stock options	2,498	723	89
Payments of deferred offering costs	(379)	(2,410)	(550)
Repayment of debt assumed in ICON acquisition	(7,126)
Payments for fractional shares in connection with reverse stock split		(3)
Proceeds from exercise of warrants		700	145
Net cash provided by financing activities	41,498	39,171	2,750
Effect of exchange rate changes on cash and cash equivalents	24	(39)	(1)
Net increase in cash and cash equivalents	22,461	10,043	159
Cash and cash equivalents at beginning of year	20,262	10,219	10,060
Cash and cash equivalents at end of year	42,723	20,262	10,219
Supplemental cash flow information:
Interest	256	239	185
Income taxes	121	134	102
Non-cash investing and financing activities:
Property and equipment acquired under notes payable and capital leases	2,839	662
Prepaid software, maintenance and insurance under notes payable and capital leases	3,666	1,615
Conversion of preferred stock to common stock upon initial public offering		84,191
Vesting of early exercised common stock options	7	37	78
Issuance of common stock in connection with acquisition	$ 8,849

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Components of Income Tax Expense (Benefit) (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Current:
Federal	$ 7	$ (24)	$ (55)
Foreign	39	260	128
State	1	45	20
Total current tax expense	47	281	93
Deferred:
Federal
Foreign	(547)	(17)	(15)
State
Total deferred tax benefit	(547)	(17)	(15)
Total income tax expense	$ (500)	$ 264	$ 78

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Significant Customer Information (Tables)

12 Months Ended

Feb. 28, 2014

Summary of Customers Accounting 10% or More of Revenue or Accounts Receivable

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

	Years Ended February 28 or 29,
	2014					2013						2012
	Percentage of total revenue		Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable
Customer A		*		24	%		12	%		16	%		15	%		11	%
Customer B		*		20			*			16			*			*
Customer C		*		*			15			13			17			14

* Indicates less than 10%

Summary of Revenue by Country Wise

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Americas	$	57,501	$	59,884	$	49,064
Europe		12,950		14,394		9,151
Asia		790		660		1,472
	$	71,241	$	74,938	$	59,687

Country Specific

Summary of Revenue by Country Wise

Countries accounting for 10% or more of revenue were as follows (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
United States		74.8	%		64.0	%		61.8	%
Canada		*			16.5			19.8
United Kingdom		*			12.1			12.2

* Indicates less than 10%

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Stock-Based Compensation - Additional Information (Detail) (USD $)	1 Months Ended	12 Months Ended						1 Months Ended			12 Months Ended
	Jul. 01, 2011	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2014 Employee Stock Option	Feb. 28, 2014 Restricted stock units	Feb. 28, 2013 Restricted stock units	Nov. 30, 2013 Restricted stock units Employees	Sep. 30, 2013 Restricted stock units Employees	Jul. 31, 2013 Restricted stock units Employees	Feb. 28, 2014 Restricted stock units Employees	Feb. 28, 2014 Maximum	Feb. 28, 2014 Minimum	Feb. 28, 2013 Minimum Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for issuance		5,560,641
Share-based Compensation granted for period		10 years
Estimated fair value of common stock shares, percentage					100.00%							110.00%
Exercise price of ISO granted		10.00%
Percentage of options vest on one-year anniversary		25.00%
Exercisable for period		10 years
Anniversary of option grant date, additional years		3 years
Options granted to date generally vest		4 years	3 years									18 months	6 months
Share-based compensation shares exercised repurchase		0	18,761
Aggregate exercise price of options repurchase			$ 6,566
Expected dividend yield		0.00%
Stock options granted during period of share-based compensation	749,464	865,875
Stock options, unrecognized compensation expense		800,000
Restricted stock units awarded						537,214		40,000	287,500	125,250	29,000
Compensation cost related to awards deemed probable of vesting		5,511,000	2,245,000	727,000							700,000
Unrecognized compensation cost		7,700,000				3,500,000					1,900,000
Weighted average grant date fair value for granted stock options		$ 18.84	$ 12.98	$ 3.50
Intrinsic value of outstanding RSU		13,000,000	8,300,000	800,000		15,800,000
Aggregate intrinsic value for fully vested options		18,000,000	17,200,000	7,400,000
Number of unvested stock options		1,399,882				568,195	118,500
Employee service share based compensation unrecognized compensation costs on non vested award weighted average period of recognition		2 years 5 months 16 days
Weighted average grant date fair value for granted RSUs						$ 21.00								$ 14.40
Recorded compensation expense for share based payments		5,511,000	2,245,000	727,000		1,300,000	100,000
Unrecognized compensation costs on restricted stock units weighted average period of recognition						2 years 1 month 10 days
Compensation cost capitalized		$ 0	$ 0	$ 0

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Significant Customer Information

12 Months Ended

Feb. 28, 2014

Significant Customer Information

(16) Significant Customer Information

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

	Years Ended February 28 or 29,
	2014					2013						2012
	Percentage of total revenue		Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable			Percentage of total revenue			Percentage of total accounts receivable
Customer A		*		24	%		12	%		16	%		15	%		11	%
Customer B		*		20			*			16			*			*
Customer C		*		*			15			13			17			14

* Indicates less than 10%

Revenue from Customer C in fiscal 2013 and 2014 included revenue associated with a material modification to an existing agreement that resulted in recognition of revenue earlier than would otherwise have occurred.

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Americas	$	57,501	$	59,884	$	49,064
Europe		12,950		14,394		9,151
Asia		790		660		1,472
	$	71,241	$	74,938	$	59,687

Countries accounting for 10% or more of revenue were as follows (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
United States		74.8	%		64.0	%		61.8	%
Canada		*			16.5			19.8
United Kingdom		*			12.1			12.2

* Indicates less than 10%

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Selected Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Feb. 28, 2014

Summary of Quarterly Financial Information

The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of fiscal 2014 and 2013:

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012		May 31, 2012
	(Dollars in thousands, except per share data)
Total revenue	$	19,370		$	18,260		$	18,012		$	15,599		$	17,611		$	18,963		$	22,891	$	15,473
Total cost of revenue		7,533			7,486			7,189			6,585			6,092			5,866			5,662		5,692
Total gross profit		11,837			10,774			10,823			9,014			11,519			13,097			17,229		9,781
Net income (loss)		(6,373	)		(7,382	)		(5,923	)		(5,394	)		(2,815	)		(82	)		4,566		(2,378	)
Net income (loss) per share (A)
Basic		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.33		(0.38	)
Diluted		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.19		(0.38	)
Weighted average shares used to compute net income (loss) per share:
Basic		27,497			26,545			26,018			25,615			25,178			25,021			13,875		6,190
Diluted		27,497			26,545			26,018			25,615			25,178			25,021			24,421		6,190

(A) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

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Organization and Description of Business (Policies)

12 Months Ended

Feb. 28, 2014

Organization and Description of Business

Organization and Description of Business

E2open, Inc. and subsidiaries (“Company”), a Delaware corporation, was incorporated in September 2003. The Company provides cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. The Company’s customers depend on outsourced manufacturing strategies and complex trading networks to compete in today’s global economy. They use the Company’s solutions to gain visibility into and control over their trading networks. The Company’s solutions enable its customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which its customers rely on as the single version of the truth. The Company’s solutions empower its customers to manage demand they cannot predict and supply they do not control.

The Company acquired ICON-SCM AG (“ICON”) on July 30, 2013 (see note 5 to the consolidated financial statements).

The Company’s corporate headquarters are located in Foster City, California, with additional offices in Austin and Dallas, Texas, China, Finland, France, Germany, Malaysia, Taiwan and the United Kingdom.

Initial Public Offering

Initial Public Offering

On July 31, 2012, the Company closed its initial public offering (“IPO”) of 4,687,500 shares of its common stock, which included 3,750,000 shares of common stock sold by the Company and 937,500 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $15.00 per share. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-179558), which was declared effective by the SEC on July 25, 2012. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the offering to the Company, net of underwriting discounts and commissions of approximately $3.9 million, were approximately $52.3 million. After deducting offering expenses paid by the Company of approximately $3 million, the Company received approximately $49.3 million. Upon the closing of the IPO, all shares of convertible preferred stock outstanding automatically converted into 14,845,528 shares of common stock.

Secondary Offering

Secondary Offering

On January 29, 2014, the Company closed its secondary offering of 4,660,557 shares of its common stock, which included 2,107,038 shares of common stock sold by the Company and 2,553,519 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $25.00 per share. The offer and sale of all of the shares in the secondary offering were registered under the Securities Act pursuant to a registration statement on Form S-3 (File No. 333-193346 and 333-193526), which was declared effective by the SEC on January 24, 2014. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the secondary offering to the Company, net of underwriting discounts and commissions of approximately $2.6 million were approximately $50.0 million. After deducting offering expenses paid or payable by the Company of approximately $0.9 million, the Company received approximately $49.1 million.

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Change in Accounting Principle

Change in Accounting Principle

In fiscal 2013, the Company changed its classification of cash flows related to payments made for deferred IPO costs from cash flows from operating activities to cash flows from financing activities in the consolidated statements of cash flows. The Company believes the new classification is preferable because it better correlates the cash flows from the deferred IPO costs with the cash flows from the proceeds to be received from the IPO. In connection with this change in accounting principle, the Company reclassified $550,000 from operating cash flows to financing cash flows for the year ended February 28, 2012.

Use of Estimates

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Such management estimates include reserve for bad debt, goodwill and other long-lived assets, estimates of value of elements of customer arrangements, stock-based compensation, the accounting for income taxes related to deferred tax asset balances and reserves, and the accounting for business combinations. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments in debt securities, and accounts receivable. The Company deposits cash and cash equivalents with high quality financial institutions. Accounts receivable are typically unsecured and are derived from sales of subscriptions and support and professional services, principally to large credit-worthy technology and industrial companies. Credit risk is concentrated primarily in North America, Europe, and parts of Asia. The Company performs ongoing credit evaluations of its customers’ financial condition and has historically experienced insignificant credit losses. The Company maintains allowances for estimated credit losses based on management’s assessment of the likelihood of collection.

Cash and Cash Equivalents and Investments in debt securities

Cash and Cash Equivalents and Investments in debt securities

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

The Company classifies all of its investments in debt securities as available-for-sale. Available-for-sale securities that the Company intends to hold for less than one year are classified as short-term investments on the balance sheet, regardless of whether the stated maturity is greater than one year from the current balance sheet date. Investments that the Company intends to hold for more than one year are classified as long-term assets on the balance sheet. Available-for-sale securities are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). For the years ended February 28, 2014 and 2013, realized and unrealized gains and losses on investments were not material. The Company had no investments in debt securities for the year ended February 29, 2012. An impairment charge is recorded in the consolidated statements of operations for declines in fair value below the cost of an individual investment that are deemed to be other than temporary. The Company assesses whether a decline in value is temporary based on the length of time that the fair market value has been below cost, the severity of the decline, as well as the intent and ability to hold, or plans to sell, the investment. For the years ended February 28, 2014 and 2013, there was no investment impairment charge recorded in the consolidated statement of operations.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse changes in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs the goodwill impairment test in accordance with guidance issued by the Financial Accounting Standards Board (“FASB”). The guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company did not record any charges related to goodwill impairment for the fiscal year ended February 28, 2014.

Intangible assets

Intangible assets

Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, generally 5 years. The straight line method approximates the manner in which cash flows are generated from the intangible assets. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Acquisition-related Expenses

Acquisition-related Expenses

Acquisition-related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally two to three years. Leasehold improvements are amortized using the straight-line method over the remaining lease term or the estimated lives of the assets, if shorter. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is reflected in the consolidated statement of operations. There were no material gains or losses from the sale or retirement of property and equipment recorded in the consolidated statements of operations during the fiscal years ended February 28, 2014 and 2013, and February 29, 2012.

Software Development Costs

Software Development Costs

The Company capitalizes the costs of software used internally in its operations, primarily for the delivery of its cloud-based on-demand software solutions. Such capitalized costs are included in property and equipment for perpetual licenses with a useful life greater than one year, and in prepaid expenses and other current assets for term licenses. The Company capitalized $2.0 million and $1.5 million of internal use software during the years ended February 28, 2014 and 2013. Amortization expense totaled $1.4 million, $1.0 million, and $0.5 million during the years ended February 28, 2014 and 2013, and February 29, 2012. The net book value of capitalized internal use software was $1.3 million, $1.9 million, and $0.6 million as of February 28, 2014 and 2013, and February 29, 2012.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not record any long-lived asset impairment charges during the fiscal year ended February 28, 2014 and 2013, and February 29, 2012.

Indemnification

Indemnification

The Company includes service-level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of service as a director or officer. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid. The Company’s arrangements include provisions indemnifying customers against liabilities if the Company’s products infringe a third-party’s intellectual property rights. The Company has not incurred any costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Revenue Recognition

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services and other.

Subscriptions and Support. The Company offers cloud-based on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and provides its customers with access to the software solutions, along with data security and storage, backup, and recovery services. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services and Other. Professional services and other revenue is derived primarily from fees for enabling services such as solution consulting and deployment that help the Company’s customers utilize its cloud-based on-demand software solutions. These services are sold in conjunction with the sale of the Company’s solutions. The Company provides professional services on both a fixed-fee and a time-and-materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprising subscriptions and support and professional services and other. Arrangements with customers typically do not provide the customer with the right to take possession of the software underlying the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement. The Company considers a noncancelable agreement signed by it and the customer, or equivalent binding agreement, to be evidence of an arrangement.

Delivery. The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee. The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due .

Collectability of the Fees Is Reasonably Assured. Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each element of an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (“VSOE”) or third party evidence (“TPE”) for the elements of its arrangements, the Company determines the best estimated selling price (“BESP”) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed-fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time-and-material basis is recognized as services are delivered.

In October 2009, the FASB amended the accounting standards for multiple deliverable revenue arrangements. The Company adopted this accounting guidance March 1, 2011 on a prospective basis for applicable transactions originating or materially modified after February 28, 2011. Prior to the adoption of this guidance, the Company determined that it did not have objective and reliable evidence of fair value for each deliverable of its arrangements. As a result, the Company accounted for subscriptions and support and professional services revenue as a single unit of accounting and recognized the total arrangement fee ratably over the contractual term of the subscription agreement.

During the year ended February 29, 2012, total revenue as reported and total revenue that would have been reported, if the transactions entered into or materially modified after February 28, 2011 were subject to previous accounting guidance, are shown in the following table (in thousands):

	As reported		Basis as if previous accounting guidance were in effect		Impact of adoption of the new accounting guidance
Total revenues for the year ended February 29, 2012 Subscriptions and support	$	35,816	$	34,831	$	985
Professional services and other		23,871		13,924		9,947
Total	$	59,687	$	48,755	$	10,932

The $10.9 million impact of the adoption of the new accounting guidance was from deferral of revenue on certain arrangements under the previous accounting guidance until the on-demand solutions were fully implemented.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (“PCS”) and professional services. During the post-acquisition period through February 28, 2014, revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Out-of-pocket expenses reimbursed by customers are recorded as revenue and included in professional services and other. The costs of professional services are expensed as incurred and included in cost of revenue.

Deferred revenue comprises amounts that have been invoiced to customers for which revenue has not yet been recognized. Amounts that will not be earned for more than 12 months were $1.6 million, and $1.9 million as of February 28, 2014 and February 28, 2013, and are included in long-term deferred revenue.

The Company excludes from revenue sales and other taxes collected on behalf of customers and remitted to governmental authorities.

Advertising Costs

Advertising Costs

Advertising costs, which include primarily print materials and sponsorship of events, are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations. Advertising expense for the years ended February 28, 2014, and 2013, and February 29, 2012 was $1.1 million, $1.0 million, and $1.1 million.

Sales Commissions

Sales Commissions

Sales commissions are expensed as incurred, and included in sales and marketing expense in the consolidated statements of operations.

Stock-based Compensation

Stock-based Compensation

Stock-based compensation expense associated with awards to employees and directors is measured at the grant date based on the fair value of the award. For time-based awards, the expense is recognized on a straight-line basis over the requisite service period of the award, which is generally four years. For performance-based awards, the expense is recognized on an accelerated basis which results in higher expense at the beginning of the vesting period.

Foreign Currency Translation

Foreign Currency Translation

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar, except for its subsidiaries located in the United Kingdom and Germany. Accordingly, the consolidated financial statements of those subsidiaries that are maintained in the local currency are remeasured into U.S. dollars at the reporting date. Unrealized exchange gains or losses from the remeasurement of monetary assets and liabilities that are not denominated in U.S. dollars are included as a component of other expense, net in the consolidated statements of operations, and totaled losses of $0.1 million, $0.0 million, and $0.1 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

The functional currency of the Company’s subsidiary in the United Kingdom is the British pound sterling. Assets and liabilities of foreign subsidiaries, where functional currencies are the local currency, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.

Net transaction gains, including gains from foreign currency contracts, recorded in the statements of operations were $0.5 million, $0.2 million, and $0.0 million for the years ended February 28, 2014, and 2013, and February 29, 2012.

Interest and Other Expense, Net

Interest and Other Expense, Net

Interest and other expense, net for the periods presented consisted of the following (in thousands):

	Years Ended February 28 or 29,
	2014			2013			2012
Interest expense	$	253		$	247		$	185
Bank financing fees		68			127			177
Foreign exchange losses—realized and unrealized, net		305			101			261
Losses (gains) from foreign currency forward contracts—realized and unrealized, net		265			60			(204	)
Interest income		(114	)		(97	)		(2	)
Other, net		(15	)		(1	)		(6	)
	$	762		$	437		$	411

Income Taxes

Income Taxes

The Company uses the asset and liability method for recording income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards, and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized.

The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Segment Information

Segment Information

The Company reports information about the segments of its business based on how the information is used by the chief operating decision maker. Management evaluates the Company’s performance and makes operating decisions based on consolidated results. Accordingly, the Company operates as one reportable segment.

Recently Issued or Adopted Authoritative Accounting Guidance

Recently Issued or Adopted Authoritative Accounting Guidance

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit (“UTB”), or a portion of a UTB, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the UTB should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective prospectively for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. The Company does not expect this guidance to have a material impact on its consolidated financial statements.

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Restricted Stock Units Activity (Detail) (USD $)	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Number of shares
Balance of awards outstanding, ending balance	1,399,882
Restricted stock units
Number of shares
Balance of awards outstanding, beginning balance	118,500
Awards granted	537,214
Awards released	(26,371)
Awards canceled and forfeited	(61,148)
Balance of awards outstanding, ending balance	568,195	118,500
Balance of awards expected to vest	520,774	92,136
Balance of awards vested
Weighted average grant date fair value
Balance of awards outstanding, beginning balance	$ 14.42
Awards granted	$ 21.00
Awards released	$ 22.66
Awards canceled and forfeited	$ 18.42
Balance of awards outstanding, ending balance	$ 19.83	$ 14.42
Balance of awards expected to vest	$ 19.83	$ 14.42
Balance of awards vested
Weighted average remaining term
Balance of awards outstanding, beginning balance	3 years 7 months 13 days
Balance of awards outstanding, ending balance	2 years 1 month 10 days	3 years 7 months 13 days
Balance of awards expected to vest	2 years 1 month 10 days	3 years 7 months 13 days
Balance of awards vested

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Organization and Description of Business

12 Months Ended

Feb. 28, 2014

Organization and Description of Business

(1) Organization and Description of Business

E2open, Inc. and subsidiaries (“Company”), a Delaware corporation, was incorporated in September 2003. The Company provides cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. The Company’s customers depend on outsourced manufacturing strategies and complex trading networks to compete in today’s global economy. They use the Company’s solutions to gain visibility into and control over their trading networks. The Company’s solutions enable its customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which its customers rely on as the single version of the truth. The Company’s solutions empower its customers to manage demand they cannot predict and supply they do not control.

The Company acquired ICON-SCM AG (“ICON”) on July 30, 2013 (see note 5 to the consolidated financial statements).

The Company’s corporate headquarters are located in Foster City, California, with additional offices in Austin and Dallas, Texas, China, Finland, France, Germany, Malaysia, Taiwan and the United Kingdom.

Initial Public Offering

On July 31, 2012, the Company closed its initial public offering (“IPO”) of 4,687,500 shares of its common stock, which included 3,750,000 shares of common stock sold by the Company and 937,500 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $15.00 per share. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-179558), which was declared effective by the SEC on July 25, 2012. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the offering to the Company, net of underwriting discounts and commissions of approximately $3.9 million, were approximately $52.3 million. After deducting offering expenses paid by the Company of approximately $3 million, the Company received approximately $49.3 million. Upon the closing of the IPO, all shares of convertible preferred stock outstanding automatically converted into 14,845,528 shares of common stock.

Secondary Offering

On January 29, 2014, the Company closed its secondary offering of 4,660,557 shares of its common stock, which included 2,107,038 shares of common stock sold by the Company and 2,553,519 shares of common stock sold by the selling stockholders. The public offering price of the shares sold in the offering was $25.00 per share. The offer and sale of all of the shares in the secondary offering were registered under the Securities Act pursuant to a registration statement on Form S-3 (File No. 333-193346 and 333-193526), which was declared effective by the SEC on January 24, 2014. The Company did not receive any proceeds from the sales of shares by the selling stockholders. The total proceeds from the secondary offering to the Company, net of underwriting discounts and commissions of approximately $2.6 million were approximately $50.0 million. After deducting offering expenses paid or payable by the Company of approximately $0.9 million, the Company received approximately $49.1 million.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013	Jun. 30, 2012	Feb. 29, 2012	Feb. 28, 2011
Accounts receivable, allowance	$ 78	$ 55		$ 24	$ 28
Preferred stock, par value	$ 0.001	$ 0.001	$ 0.001
Preferred stock, authorized shares	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	28,825,098	25,424,361
Common stock, shares outstanding	28,825,098	25,424,361

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Income Taxes

12 Months Ended

Feb. 28, 2014

Income Taxes

(11) Income Taxes

The following table presents the income or loss before income taxes for domestic and foreign operations (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
United States	$	(24,341	)	$	(799	)	$	121
Foreign		(1,232	)		354			(268	)
	$	(25,573	)	$	(445	)	$	(147	)

Income tax expense (benefit) consisted of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Current:
Federal	$	7		$	(24	)	$	(55	)
Foreign		39			260			128
State		1			45			20
Total current tax expense		47			281			93
Deferred:
Federal		—			—			—
Foreign		(547	)		(17	)		(15	)
State		—			—			—
Total deferred tax benefit		(547	)		(17	)		(15	)
Total income tax expense	$	(500	)	$	264		$	78

The income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) as a result of the following (in thousands):

	Years ended February 28 or 29,
	2014			2013			2012
Federal tax expense (benefit) at statutory rate	$	(8,952	)	$	(156	)	$	(51	)
State income taxes		(582	)		15			189
Foreign rate differential		(31	)		(5	)		42
Nondeductible expenses		871			555			218
Foreign withholding tax		5			36			44
Research and development credits		(728	)		(755	)		(742	)
Expired net operating losses		1,785			1,244			2,548
Other		26			660			689
Change in valuation allowance		7,106			(1,330	)		(2,859	)
Total income tax expense	$	(500	)	$	264		$	78

There is approximately $1.1 million of undistributed earnings of the Company’s foreign subsidiaries as of February 28, 2014. Federal income taxes in excess of those included for US income tax rules have not been provided for on the unremitted earnings of foreign corporations because such earnings are intended to be permanently reinvested. Upon distribution of those earnings in the form of dividends or otherwise, the Company might be subject to both U.S. Federal and State income taxes (subject to an adjustment for foreign tax credits, where applicable) and withholding taxes payable to various foreign countries.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The types of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Deferred tax assets:
Accruals and reserves	$	1,964		$	2,267
Deferred revenue		2,855			1,684
Stock-based compensation		1,285			284
State income taxes		(1	)		3
Net operating loss carryforwards		97,987			93,992
Property and equipment		975			147
Credit carryforwards		5,212			4,782
Others		1,493			—
Gross deferred tax assets		111,770			103,159
Valuation allowance		(109,014	)		(101,908	)
Total deferred tax assets		2,756			1,251
Deferred tax liabilities:
Business acquisition		(3,385	)		—
Other		—			(1,033	)
Total deferred tax liabilities		(3,385	)		(1,033	)
Net deferred tax assets (liabilities)	$	(629	)	$	218

The authoritative standard issued by FASB related to accounting for income taxes provides for the recognition of deferred tax assets if realization of such assets is more likely than not. As a result of certain realization requirements of ASC 718: Compensation—Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of February 28, 2014 and 2013 that arose directly from tax deductions related to equity compensation recognized for financial reporting. Equity will be increased by $5.7 million if and when such deferred tax assets are ultimately realized. The Company uses tax law ordering when determining when excess tax benefits have been realized. The net valuation allowance increased by approximately $7.1 million during the year ended February 28, 2014, primarily due to generation of NOLs. Realization of deferred tax assets is dependent upon generating sufficient taxable income, carryback of losses, offsetting deferred tax liabilities, and availability of tax planning strategies. As of February 28, 2014, the Company assessed that it is not more likely than not that the Company will ultimately realize the benefit of its net deferred tax assets in any taxing jurisdiction other than China, Germany, Malaysia and United Kingdom. Therefore the Company has recorded a valuation allowance to reduce the carrying value of the deferred tax assets to the amount that is more likely than not to be recognized.

As of February 28, 2014, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $340.9 million and $69.2 million which begin to expire in fiscal years 2023, and 2015. Furthermore the Company has a net operating loss for Japan income tax purpose of approximately $0.0 million, which will begin to expire in 2014. As of February 28, 2014, the Company had research and development tax credits of approximately $6.0 million and $4.7 million available to reduce future federal and California income taxes respectively. Federal credit carryforwards expire beginning in 2023. California credits carryforward indefinitely.

IRC Section 382 imposes limitations on a corporation’s ability to utilize its NOLs if the corporation experiences an ownership change, as defined. Based upon currently available information, the Company believes there was an ownership change in 2003. As a result, utilization of our U.S. Federal NOLs in future periods will likely be subject to an annual limitation under IRC Section 382. As noted above, as of February 28, 2014, federal and state net operating loss carryforwards for income tax purposes before any Section 382 limitation were approximately $340.9 million and $69.2 million, respectively. Accordingly, we have reduced our deferred tax assets based upon the anticipated federal and state net operating losses that are expected to expire unutilized due to the annual limitation.

As of February 28, 2014, the total amount of gross unrecognized tax benefits was $8.4 million, of which $0.7 million, if recognized, would affect our effective tax rate. As of February 28, 2013, we recorded gross unrecognized tax benefits of $4.5 million of which $0.3 million, if recognized, would affect our effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of February 28, 2014, the total amount of gross interest and penalties accrued was $0.1 million, which is classified as long-term taxes payable in the consolidated balance sheets.

Management believes that it has adequately provided for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. Should any issues addressed in our tax audits be resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income tax in the period such resolution occurs. Although timing of the resolution and/or closure of audits is highly uncertain, we do not believe it is reasonably possible that our unrecognized tax benefits would materially change in the next twelve months.

A reconciliation of the change in gross unrecognized tax benefits, including interest and penalties, is as follows (in thousands):

	As of February 28 or 29,
	2014			2013
Balance, beginning of year	$	4,507		$	3,975
Tax positions related to the current year:
Additions		557			394
Reductions		—			—
Tax positions related to prior year:
Additions		3,381			162
Reductions		(69	)		—
Settlements		—			—
Lapses in statutes of limitations		—			(24	)
Balance, end of year	$	8,376		$	4,507

The Company is subject to taxation in the U.S., various States, and foreign jurisdictions. The 2000 to 2014 tax year’s statute of limitations generally remain open and are subject to U.S. and CA tax examinations. The statutes of limitations in foreign jurisdictions range from four to seven years, and the open tax years subject to examination are from 2007 to 2014.

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Document and Entity Information (USD $)	12 Months Ended
	Feb. 28, 2014	Aug. 31, 2013
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Feb. 28, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Trading Symbol	EOPN
Entity Registrant Name	E2OPEN INC
Entity Central Index Key	0001540400
Current Fiscal Year End Date	--02-28
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	28,825,098
Entity Public Float		$ 256,500,000

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Stockholders' Equity

12 Months Ended

Feb. 28, 2014

Stockholders' Equity

(12) Stockholders’ Equity

Authorized Capital

In June 2012, the Company’s Certificate of Incorporation was amended and restated to authorize the Company to issue two classes of capital stock to be designated common stock and preferred stock. The total number of shares of all classes of capital stock which the Company is authorized to issue is 110,000,000 shares, consisting of 100,000,000 shares of Common Stock, par value $0.001 per share (“Common Stock”), and 10,000,000 shares of Preferred Stock, par value $0.001 per share ( “Preferred Stock”).

As of February 28, 2014, there were 28,825,098 shares of common stock issued and outstanding and no preferred stock issued or outstanding.

Convertible Preferred Stock

Upon the closing of the Company’s IPO on July 31, 2012, all outstanding convertible preferred stock was converted into 14,845,528 shares of common stock.

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Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Revenue
Total revenue	$ 71,241	$ 74,938	$ 59,687
Cost of revenue
Amortization of acquired intangibles	816
Total cost of revenue	28,793	23,312	21,630
Gross profit
Total gross profit	42,448	51,626	38,057
Operating expenses
Research and development	18,491	14,999	13,240
Sales and marketing	36,238	28,222	18,590
General and administrative	10,660	8,413	5,963
Acquisition-related expenses	1,182
Amortization of acquired intangibles	688
Total operating expenses	67,259	51,634	37,793
Income (loss) from operations	(24,811)	(8)	264
Interest and other expense, net	(762)	(437)	(411)
Loss before income taxes	(25,573)	(445)	(147)
Benefit from (provision for) income taxes	501	(264)	(78)
Net loss	(25,072)	(709)	(225)
Net loss per share:
Basic and diluted	$ (0.95)	$ (0.04)	$ (0.04)
Weighted average shares used to compute net loss per share
Basic and diluted	26,415	17,490	5,918
Other comprehensive income (loss), net
Net unrealized gains (losses) on investments during the period	(18)	14
Less: reclassification adjustment for losses included in income	14
Net unrealized gains (losses) on investments	(4)	14
Net foreign currency translation gains (losses)	52	(40)	9
Total other comprehensive income (loss), net	48	(26)	9
Total comprehensive loss	(25,024)	(735)	(216)
Subscriptions and support
Revenue
Revenue	56,438	43,793	35,816
Cost of revenue
Cost of revenue	10,981	8,275	7,514
Gross profit
Total gross profit	44,641	35,518	28,302
Professional services and other
Revenue
Revenue	14,803	31,145	23,871
Cost of revenue
Cost of revenue	16,996	15,037	14,116
Gross profit
Total gross profit	$ (2,193)	$ 16,108	$ 9,755

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Credit Facilities

12 Months Ended

Feb. 28, 2014

Credit Facilities

(6) Credit Facilities

On October 7, 2013, the Company entered into an agreement for a revolving loan facility with a borrowing capacity of up to $20.0 million. Funds available are subject to a borrowing formula which is secured by the Company’s accounts receivable and contracted backlog. This agreement is effective for a period of two years through October 2015. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal prime rate minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is a general obligation of the Company secured by the Company’s tangible and intangible assets, as well as a negative pledge whereby the Company agrees not to give any creditor a security interest on the Company’s intellectual property. There were no borrowings as of and for the year ended February 28, 2014.

ICON maintained bank overdraft facilities with three local banks which were used primarily to fund working capital. The original amount available under the bank overdraft facilities was approximately $2.1 million (€1.6 million). The Company assumed the overdraft facilities upon acquisition of ICON. Since the acquisition, the Company cancelled two of the three facilities, and retained one. As February 28, 2014, the Company has approximately $0.7 million (€0.5 million) of overdraft capacity, with no outstanding balance.

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Acquisition

12 Months Ended

Feb. 28, 2014

Acquisition

(5) Acquisition

On July 30, 2013, the Company acquired all of the outstanding shares of ICON, a market leader in supply chain planning and collaboration, for approximately $26.6 million. The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Transaction costs of $1.2 million for the year ended February 28, 2014 associated with the acquisition of ICON were expensed as incurred and presented as Acquisition-related expenses as a part of operating expenses in the condensed consolidated statements of operations.

Allocation of Consideration Transferred

The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values. The excess of the fair value of consideration transferred over estimated fair value of the net tangible assets and intangible assets was recorded as goodwill. During fiscal 2014, the Company adjusted goodwill associated with the ICON acquisition by $3.1 million from $25.7 million to $22.6 million. The adjustment was primarily attributable to $2.3 million deferred tax liability adjustment and $0.9 million reduction of pre-acquisition accrued liabilities. We also recorded $0.9 million foreign taxes payable with a corresponding receivable from ICON’s previous shareholders. These adjustments were identified during this period resulting from validating and refining the preliminary assumptions and estimates used in establishing the fair values of the acquired identifiable assets and liabilities.

The Company accounted for the ICON acquisition under the purchase method of accounting as a business combination. The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date based on the purchase price allocation (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		1,120
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		16,859
Accounts payable and accrued liabilities		(3,125	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(1,394	)
Other noncurrent liabilities		(46	)
Total liabilities assumed		(12,845	)
Net identifiable assets acquired		4,014
Goodwill		22,556
Total consideration	$	26,570

The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with the Company’s Business Network, the Company expands its market opportunity and solution portfolio, accelerates its product roadmap, and extends its position as the leader in the collaborative planning and execution space.

As of the date of acquisition, the identifiable intangibles comprise developed technology valued at approximately $7.0 million and customer relationships valued at approximately $5.9 million and are being amortized over the estimated useful life of 5 years. The amortization related to these acquired intangible assets for the year ended February 28, 2014 is $1.5 million. As of February 28, 2014, the remaining amortization period for the acquired intangible assets is approximately 4.4 years. The expected annual amortization expense related to the acquired intangible assets as of February 28, 2014, is as follows (in thousands):

Fiscal year ending:
2015	$	2,580
2016		2,580
2017		2,580
2018		2,580
2019		1,075
Total	$	11,395

ICON’s results of operations have been included in our condensed consolidated financial statements subsequent to the date of acquisition. Revenue recognized attributable to the acquisition of ICON was $4.1 million for the period from the acquisition date of July 30, 2013 through February 28, 2014. Immediately following the acquisition, ICON’s operations in the United States were merged into the Company’s operations and operating costs relative to ICON were not separately tracked; as such, the standalone ICON post-acquisition results of operations are not readily determinable. The unaudited pro forma revenue and net loss for the year ended February 28, 2014 presented below combine the consolidated results of the Company and ICON giving effect to the acquisition of ICON as if it had been completed on March 1, 2012, the beginning of the annual reporting period prior to the year of acquisition. The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of March 1, 2012. The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of ICON’s amortizable assets acquired in the transaction of $1.1 million and $1.9 million in fiscal 2014 and 2013, adjustment to operating expense to reflect acquisition-related costs of $1.2 million in fiscal 2013, and adjustments to net interest expense based upon settlement of debt assumed upon acquisition of $0.2 million and $0.3 million in fiscal 2014 and 2013. The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Year Ended February 28, 2014			Year Ended February 28, 2013
Pro forma revenue	$	75,072		$	85,472
Pro forma net loss		(26,447	)		(8,683	)
Pro forma net loss per share:
Basic		(0.99	)		(0.50	)
Diluted		(0.99	)		(0.50	)

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Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Feb. 28, 2014

Selected Quarterly Financial Information (Unaudited)

(17) Selected Quarterly Financial Information (Unaudited)

The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of fiscal 2014 and 2013:

	Three Months Ended
	Feb 28, 2014			Nov 30, 2013			Aug 31, 2013			May 31, 2013			Feb 28, 2013			Nov 30, 2012			Aug 31, 2012		May 31, 2012
	(Dollars in thousands, except per share data)
Total revenue	$	19,370		$	18,260		$	18,012		$	15,599		$	17,611		$	18,963		$	22,891	$	15,473
Total cost of revenue		7,533			7,486			7,189			6,585			6,092			5,866			5,662		5,692
Total gross profit		11,837			10,774			10,823			9,014			11,519			13,097			17,229		9,781
Net income (loss)		(6,373	)		(7,382	)		(5,923	)		(5,394	)		(2,815	)		(82	)		4,566		(2,378	)
Net income (loss) per share (A)
Basic		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.33		(0.38	)
Diluted		(0.23	)		(0.28	)		(0.23	)		(0.21	)		(0.11	)		—			0.19		(0.38	)
Weighted average shares used to compute net income (loss) per share:
Basic		27,497			26,545			26,018			25,615			25,178			25,021			13,875		6,190
Diluted		27,497			26,545			26,018			25,615			25,178			25,021			24,421		6,190

(A) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

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Stock-based Compensation

12 Months Ended

Feb. 28, 2014

Stock-based Compensation

(13) Stock-based Compensation

In June 2012, the Board adopted the 2012 Stock Plan (“2012 Plan”), which was subsequently approved by the Company’s stockholders. Upon the completion of the IPO, all shares that were reserved but unissued under the 2003 Stock Plan were assumed by the 2012 Plan. Under the 2012 Plan, the Company has the ability to issue incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units and performance shares to service providers, including employee and directors, upon Board approval. No awards under the 2012 Plan were granted prior to the Company’s IPO. No additional awards will be granted under the 2003 Plan. As of February 28, 2014, there were 5,560,641 shares of common stock reserved for issuance under the 2012 Plan.

Options under the 2012 Plan may be granted for periods of up to 10 years; provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares of common stock on the date of grant, and (ii) the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the underlying shares on the date of grant. Options generally vest 25% on the one-year anniversary of the option grant date, and then monthly for three additional years, and are exercisable for a period of 10 years after the date of grant. RSUs generally vest 25% on the first annual anniversary of the award grant date, and 25% each year thereafter on the annual anniversary of the award grant date for three additional years.

Some options granted are immediately exercisable and any unvested portion of the shares acquired upon early exercise is subject to a right of repurchase by the Company upon the employee’s termination at the original purchase price. The right of repurchase lapses as the options vest, which is generally over the four-year vesting period of the related options. As of February 28, 2013 there were 18,761 shares exercised that were subject to repurchase. The $6,566 aggregate exercise price of the options subject to repurchase as of February 28, 2013 is recorded in Other noncurrent liabilities and were amortized to equity as the options vest. As of February 28, 2014, there were no shares exercised that were subject to repurchase.

The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the Company’s stock price as well as by certain assumptions including the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behavior, risk-free interest rates, and expected dividends. The estimated grant-date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Years Ended February 28 or 29,
	2014	2013	2012
Expected term (in years)	5.96	6.01	5.84
Expected stock price volatility	49.32% –51.76%	50.0% – 55.0%	49.1% – 54.5%
Risk-free interest rate	0.73% – 1.85%	0.8% – 1.3%	1.1% – 2.6%
Expected dividend yield	—	—	—

The expected term represents the period that stock-based awards are expected to be outstanding, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior as influenced by changes to the terms of the Company’s stock-based awards. The Company estimated the expected term, using the simplified method due to limited exercise data, to be the period of time between the date of grant and the midpoint between option vesting and expiration. The Company estimated the expected volatility of its common stock based on the average of historical and implied volatility of comparable companies from a representative peer group based on industry and market capitalization data. The risk-free interest rate represents the yield on a constant maturity U.S. Treasury security with a term equal to the expected term of the options. Expected dividend yield is set at 0% because the Company does not expect to pay dividends during the term of the option, and historically has not paid any dividends to its stockholders. Management made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

In July 2011, the Company awarded 749,464 stock options that were subject to certain financial performance requirements to be achieved by February 28, 2013, before vesting could occur. The vesting of these stock options was also dependent upon the employees’ continued employment after February 28, 2013. In March 2012, the Board of Directors approved a modification of the financial performance requirements. At the date of the modification, the Company determined that the achievement of the modified performance requirements was probable and, accordingly, the recording of compensation cost related to the modified awards commenced. Prior to this date, the Company had not recognized compensation expense associated with these grants because the Company believed that, based on the then-current and expected operational results, it was not probable that the associated financial performance requirements would be achieved. The modified financial performance requirements were achieved by February 28, 2013. The unrecognized compensation cost related to these options is $0.8 million as of February 28, 2014, and is being recognized over the remaining vesting term of three years from the measurement date of February 28, 2013.

In July, September, November 2013, and February 2014, the Company awarded 125,250, 287,500, 40,000, and 29,000 restricted stock units that are subject to certain financial performance requirements before vesting can occur. The vesting of these stock options is also dependent upon the employees’ continued employment after February 28, 2014. The Company records compensation expense related to these awards based on the estimated probability of achievement of the financial performance requirements. The compensation cost related to the awards deemed probable of vesting amounting to $0.7 million and was recorded in the condensed consolidated statement of operations for the year ended February 28, 2014. The unrecognized compensation cost related to the awards is $1.9 million as of February 28, 2014, and is being recognized over the remaining vesting term of these awards ranging from six to eighteen months from the measurement date of February 28, 2014.

Stock Options:

Activity under the Company’s stock option plans for the years presented is as follows:

	Number of shares			Weighted average exercise price per share		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		865,875			18.84
Options exercised		(805,776	)		3.10
Options canceled and forfeited		(492,650	)		8.12
Balance of options outstanding, February 28, 2014		2,241,784		$	9.86		7.97 years
Balance of options expected to vest, February 28, 2013		2,485,050		$	4.41		7.94 years
Balance of options exercisable, February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest, February 28, 2014		2,179,660			9.71		7.95 years
Balance of options exercisable, February 28, 2014		841,902			6.38		7.29 years

The weighted average grant date fair value of the employee stock options granted during the years ended February 28, 2014 and 2013, and February 29, 2012 was $18.84, $12.98 and $3.50.

The intrinsic value of employee stock options exercised during the years ended February 28, 2014 and 2013, and February 29, 2012 was $13.0 million, $8.3 million and $0.8 million. The intrinsic value of vested shares as of February 28, 2014 and 2013, and February 29, 2012 was $18.0 million, $17.2 million and $7.4 million.

As of February 28, 2014, the number of unvested options was 1,399,882.

As of February 28, 2014, the Company had $7.7 million of unrecognized compensation costs excluding estimated forfeitures, related to unvested stock option awards, which are expected to be recognized over a weighted average period of 2.46 years.

Restricted Stock Units:

Activity under the Company’s RSU plans for the years presented is as follows:

	Number of shares			Weighted average  grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28, 2013		118,500		$	14.42		3.62 years
Awards granted		537,214			21.00
Awards released		(26,371	)		22.66
Awards canceled and forfeited		(61,148	)		18.42
Balance of awards outstanding, February 28, 2014		568,195		$	19.83		2.11 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, February 28, 2014		520,774		$	19.83		2.11 years
Balance of awards vested, February 28, 2014		—		$	—		—

The weighted average grant date fair value per share of the RSUs granted during the year ended February 28, 2014 and 2013 was $21.00 and $14.40.

The intrinsic value of outstanding RSUs as of February 28, 2014 was $15.8 million.

Total compensation expense for these awards recorded in the condensed consolidated statement of operations for the year ended February 28, 2014 and 2013 was $1.3 million and $0.1 million. The unrecognized compensation expense related to these RSUs was $3.5 million as of February 28, 2014 which is expected to be recognized over a weighted average period of 2.11 years.

Total share-based compensation:

Total compensation expense recorded for share-based payments amounted to $5.5 million, $2.2 million and $0.7 million for the years ended February 28, 2014 and 2013 and February 29, 2012. No compensation cost was capitalized during the years ended February 28, 2014, February 28, 2013 and February 29, 2012.

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Cost of revenue	$	1,641	$	621	$	203
Research and development		460		184		84
Sales and marketing		2,035		749		259
General and administrative		1,375		691		181
	$	5,511	$	2,245	$	727

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Related Party Transactions

12 Months Ended

Feb. 28, 2014

Related Party Transactions

(9) Related Party Transactions

One of the Company’s directors, Patrick J. O’Malley, III, is the Chief Financial Officer of Seagate Technology Public Limited Company (“Seagate PLC”). Seagate LLC, a wholly owned subsidiary of Seagate PLC, is one of the Company’s customers and the Company earned revenue of $3.3 million, $3.4 million, and $1.8 million for fiscal 2014, 2013, and 2012. The Company received payments from Seagate of $4.7 million, $3.1 million, and $2.3 million in the years ended February 28, 2014, and 2013, and February 29, 2012. The Company has outstanding receivables from Seagate of $0.1 million and $1.0 million as of February 28, 2014 and 2013.

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Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Income Tax Contingency [Line Items]
U.S. federal income tax rate	35.00%
Undistributed earnings of the Company's foreign subsidiaries	$ 1,100,000
Change in Equity if realized	5,700,000
Change in valuation allowance	7,106,000	(1,330,000)	(2,859,000)
Gross unrecognized tax benefits	8,376,000	4,507,000	3,975,000
Gross unrecognized tax benefits that would impact effective tax rate	700,000	300,000
Gross interest and penalties accrued	100,000
Federal
Income Tax Contingency [Line Items]
Net operating loss carryforwards	340,900,000
Net operating loss carryforwards, expiration year	2023
Research and development tax credits	6,000,000
Tax credits carryforwards, expiration year	2023
State
Income Tax Contingency [Line Items]
Net operating loss carryforwards	69,200,000
Net operating loss carryforwards, expiration year	2015
Japan
Income Tax Contingency [Line Items]
Net operating loss carryforwards	0
Net operating loss carryforwards, expiration year	2014
California
Income Tax Contingency [Line Items]
Research and development tax credits	$ 4,700,000
U.S. Federal And State Jurisdictions | Minimum
Income Tax Contingency [Line Items]
Open tax years subject to examination	2000
Statutes of limitations in foreign jurisdictions	4 years
U.S. Federal And State Jurisdictions | Maximum
Income Tax Contingency [Line Items]
Open tax years subject to examination	2014
Statutes of limitations in foreign jurisdictions	7 years

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Notes Payable and Capital Lease Obligations

12 Months Ended

Feb. 28, 2014

Notes Payable and Capital Lease Obligations

(7) Notes Payable and Capital Lease Obligations

The Company finances the purchase of certain equipment, software and related support and maintenance with notes payable and capital leases. The terms of the notes payable and capital leases range from nine months to three years and the bear interest at rates ranging from 2.77% to 13.13% per annum. Total minimum payments due under notes payable and capital lease obligations as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	3,255
2016		2,308
2017		398
Total minimum payments		5,961
Less: portion representing interest		(367	)
Present value of minimum payments		5,594
Less: current portion		(2,995	)
Total, net of current portion	$	2,599

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Transactions with Customers

12 Months Ended

Feb. 28, 2014

Transactions with Customers

(8) Transactions with Customers

In fiscal 2014 and 2013, the Company financed equipment and software purchases of $2.6 million and $1.1 million through vendors who are also customers, with capital lease obligations and notes payable. The Company earned $8.6 million or 12.0%, and $3.7 million or 4.9% of total revenue from these customers in fiscal 2014 and 2013. The transactions have been recorded at fair value, and the revenue and services are presented on a gross basis, as the Company received an identifiable benefit in exchange for the consideration, and the fair value of such benefit identified can be reasonably estimated and revenue was collected from the customer in cash.

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Commitments and Contingencies

12 Months Ended

Feb. 28, 2014

Commitments and Contingencies

(10) Commitments and Contingencies

Payable to Icon shareholders

In accordance with the share purchase agreement for the acquisition of ICON, the Company will place in escrow approximately $5.5 million (€4.0 million) payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period. The Company and the former shareholders have not selected the escrow agent as of February 28, 2014.

Leases

The Company leases its primary office space under noncancelable operating leases with various expiration dates through July 2018. Rent expense for the years ended February 28, 2014, and 2013 and February 29, 2012 was $2.7 million, $1.8 million, and $1.7 million.

Future minimum lease payments under noncancelable operating leases as of February 28, 2014 are as follows (in thousands):

Fiscal year ending:
2015	$	2,431
2016		1,685
2017		1,571
2018		1,454
2019		540
Total minimum lease payments	$	7,681

Several of the operating lease agreements require the Company to provide security deposits. As of February 28, 2014 and February 28, 2013, lease deposits totaled $0.5 million and $0.3 million. The deposits are generally refundable at the expiration of the lease, assuming all of the Company’s obligations under the lease agreement have been met, and are included in other assets in the consolidated balance sheets.

Contingencies

From time to time, the Company is subject to contingent liabilities that arise in the ordinary course of business. The Company records an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not currently believe the resolution of these actions will have a material adverse effect upon the Company’s financial position, results of operations or cash flows.

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Stockholders' Equity - Additional Information (Detail) (USD $)	Feb. 28, 2014	Feb. 28, 2013	Jun. 30, 2012	Jul. 31, 2012 IPO
Capital Unit [Line Items]
Capital stock, authorized shares			110,000,000
Common stock, authorized shares	100,000,000	100,000,000	100,000,000
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Preferred stock, authorized shares	10,000,000	10,000,000	10,000,000
Preferred stock, par value	$ 0.001	$ 0.001	$ 0.001
Common stock, shares issued	28,825,098	25,424,361
Common stock, shares outstanding	28,825,098	25,424,361
Preferred stock, shares issued
Preferred stock, shares outstanding
Shares of common stock issued upon conversion of convertible preferred stock				14,845,528

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Schedule of Estimated Grant Date Fair Values Employee Stock Options Assumptions (Detail)	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Expected term (in years)	5 years 11 months 16 days	6 years 4 days	5 years 10 months 2 days
Expected stock price volatility, minimum	49.32%	50.00%	49.10%
Expected stock price volatility, maximum	51.76%	55.00%	54.50%
Risk-free interest rate, minimum	0.73%	0.80%	1.10%
Risk-free interest rate, maximum	1.85%	1.30%	2.60%
Expected dividend yield	0.00%

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Reconciliation of Change in Gross Unrecognized Tax Benefits, Including Interest and Penalties (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Income Tax Contingency [Line Items]
Balance, beginning of year	$ 4,507	$ 3,975
Tax positions related to the current year:
Additions	557	394
Reductions
Tax positions related to prior year:
Additions	3,381	162
Reductions	(69)
Settlements
Lapses in statutes of limitations		(24)
Balance, end of year	$ 8,376	$ 4,507

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Fair Value Measurements (Tables)

12 Months Ended

Feb. 28, 2014

Assets and Liabilities Measured at Fair Value on Recurring Basis

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of February 28, 2014 and 2013 are summarized as follows (in thousands):

	February 28, 2014
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	11,905	$	—		$	—	$	11,905
Money market funds		19,221		—			—		19,221
Commercial paper		—		8,297			—		8,297
Short-term investments:
Commercial paper		—		10,491			—		10,491
Corporate debt securities		—		2,378			—		2,378
Agency bond		—		1,505			—		1,505
Other current assets:
Foreign currency forward contracts		—		60			—		60
Long-term investments:
Corporate debt securities		—		3,151			—		3,151
Asset backed securities		—		250			—		250
U.S. government securities		5,008		—			—		5,008
Common trust fund		—		116			—		116
Insurance company contract		—		16			—		16
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	36,150	$	26,264		$	—	$	62,414
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(163	)		—		(163	)
Total liabilities	$	—	$	(163	)	$	—	$	(163	)

	February 28, 2013
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	2,501	$	—		$	—	$	2,501
Money market funds		3,879		—			—		3,879
Commercial paper		—		12,446			—		12,446
Short-term investments:
Commercial paper		—		12,323			—		12,323
Corporate debt securities		—		2,375			—		2,375
Mortgage backed securities		—		591			—		591
Other current assets:
Foreign currency forward contracts		—		4			—		4
Long-term investments:
Corporate debt securities		—		5,990			—		5,990
Asset backed securities		—		3,046			—		3,046
Mortgage backed securities		—		1,805			—		1,805
Municipal debt securities		—		851			—		851
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(158	)		—		(158	)
Total liabilities	$	—	$	(158	)	$	—	$	(158	)

Summary of Foreign Exchange Contracts Details

The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of February 28, 2014 and February 28, 2013.

	As of February 28, 2014								As of February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value
									(Unaudited)
	(Dollars in thousands, except average contract rate)
Foreign currency forward exchange contracts:
Euro	$	7,401			1.4	$	(256	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(2,146	)		3.2		(59	)		(2,255	)		3.1		(8	)
British Pound		(4,317	)		1.6		212			—			—		—
Total	$	938				$	(103	)	$	5,067				$	(154	)

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Credit Facilities - Additional Information (Detail) In Millions, unless otherwise specified			1 Months Ended		1 Months Ended
	Feb. 28, 2014 Bank overdraft USD ($)	Feb. 28, 2014 Bank overdraft EUR (€)	Oct. 07, 2013 Revolving Line of Credit USD ($)	Feb. 28, 2014 Revolving Line of Credit USD ($)	Oct. 07, 2013 Revolving Line of Credit Prime Rate
Line of Credit Facility [Line Items]
Bank overdraft facility available balance	$ 2.1	€ 1.6	$ 20.0
Basis spread on variable rate					0.25%
Interest floor rate					3.25%
Bank overdraft facility amount outstanding	0			0
Revolving loan facility effective period			2 years
Bank overdraft facility remaining balance	$ 0.7	€ 0.5

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Fair Value Measurements

12 Months Ended

Feb. 28, 2014

Fair Value Measurements

(15) Fair Value Measurements

As a basis for considering such assumptions, accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs such as quoted prices in an active market;

Level 2—Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and

Level 3—Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of February 28, 2014 and 2013 are summarized as follows (in thousands):

	February 28, 2014
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	11,905	$	—		$	—	$	11,905
Money market funds		19,221		—			—		19,221
Commercial paper		—		8,297			—		8,297
Short-term investments:
Commercial paper		—		10,491			—		10,491
Corporate debt securities		—		2,378			—		2,378
Agency bond		—		1,505			—		1,505
Other current assets:
Foreign currency forward contracts		—		60			—		60
Long-term investments:
Corporate debt securities		—		3,151			—		3,151
Asset backed securities		—		250			—		250
U.S. government securities		5,008		—			—		5,008
Common trust fund		—		116			—		116
Insurance company contract		—		16			—		16
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	36,150	$	26,264		$	—	$	62,414
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(163	)		—		(163	)
Total liabilities	$	—	$	(163	)	$	—	$	(163	)

	February 28, 2013
	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	2,501	$	—		$	—	$	2,501
Money market funds		3,879		—			—		3,879
Commercial paper		—		12,446			—		12,446
Short-term investments:
Commercial paper		—		12,323			—		12,323
Corporate debt securities		—		2,375			—		2,375
Mortgage backed securities		—		591			—		591
Other current assets:
Foreign currency forward contracts		—		4			—		4
Long-term investments:
Corporate debt securities		—		5,990			—		5,990
Asset backed securities		—		3,046			—		3,046
Mortgage backed securities		—		1,805			—		1,805
Municipal debt securities		—		851			—		851
Other noncurrent assets:
Certificate of deposit		16		—			—		16
Total assets	$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(158	)		—		(158	)
Total liabilities	$	—	$	(158	)	$	—	$	(158	)

The fair values of the Company’s Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair values of the Company’s Level 2 financial instruments are based on quoted market prices for comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company’s foreign currency forward contracts are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

For the years ended February 28, 2014 and February 28, 2013, the Company sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The contracts are classified as Level 2. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of February 28, 2014 and February 28, 2013.

	As of February 28, 2014								As of February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair  Value
									(Unaudited)
	(Dollars in thousands, except average contract rate)
Foreign currency forward exchange contracts:
Euro	$	7,401			1.4	$	(256	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(2,146	)		3.2		(59	)		(2,255	)		3.1		(8	)
British Pound		(4,317	)		1.6		212			—			—		—
Total	$	938				$	(103	)	$	5,067				$	(154	)

The Company entered into the foreign exchange contracts with two counterparties. The Company has the right of offset for gains earned and losses incurred under contracts with the same counterparty, and therefore has recorded contracts with the same counterparty on a net basis in the balance sheet.

The Company does not use derivatives for speculative or trading purposes.

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Cash and Investments (Tables)

12 Months Ended

Feb. 28, 2014

Schedule of Cash, Cash Equivalents and Available-For-Sale Investments

The following table presents cash, cash equivalents and available-for-sale investments for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2014:
Cash	$	3,300	$	—	$	—		$	3,300
Cash equivalents:
Money market accounts		11,905		—		—			11,905
Money market funds		19,221		—		—			19,221
Commercial paper		8,296		1		—			8,297
Short-term investments:
Commercial paper		10,492		—		(1	)		10,491
Corporate debt securities		2,378		1		(1	)		2,378
Agency bond		1,504		1		—			1,505
Long-term investments:
Corporate debt securities		3,154		3		(6	)		3,151
Asset-backed securities		250		—		—			250
U.S. government securities		5,005		3		—			5,008
Common trust fund		120		—		(4	)		116
Insurance company contract		16		—		—			16
Total cash, cash equivalents, and investments	$	65,641	$	9	$	(12	)	$	65,638
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total cash, cash equivalents, and investments	$	47,229	$	21	$	(7	)	$	47,243

Schedule of Available-For-Sale Investments by Contractual Maturity Date

The following table presents available-for-sale investments, recorded in cash equivalents and investments, by contractual maturity date as of February 28, 2014 (in thousands):

	Amortized Cost		Estimated Fair  Market Value
Maturities in one year or less	$	22,669	$	22,671
Maturities after one year through two years		8,545		8,541
Total	$	31,214	$	31,212

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Annual Amortization Expense Related to the Acquired Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014
Finite-Lived Intangible Assets [Line Items]
2015	$ 2,580
2016	2,580
2017	2,580
2018	2,580
2019	1,075
Total	$ 11,395

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Schedule of Cash, Cash Equivalents and Available-For-Sale Investments (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012	Feb. 28, 2011
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	$ 31,214
Amortized Cost	42,723	20,262	10,219	10,060
Estimated Fair Market Value	31,212
Short-term investments | Commercial paper
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	10,492	12,322
Gross Unrealized Gains		1
Gross Unrealized Losses	(1)
Estimated Fair Market Value	10,491	12,323
Short-term investments | Corporate debt securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	2,378	2,373
Gross Unrealized Gains	1	2
Gross Unrealized Losses	(1)
Estimated Fair Market Value	2,378	2,375
Short-term investments | Mortgage-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		594
Gross Unrealized Losses		(3)
Estimated Fair Market Value		591
Long-term investments | Corporate debt securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	3,154	5,981
Gross Unrealized Gains	3	10
Gross Unrealized Losses	(6)	(1)
Estimated Fair Market Value	3,151	5,990
Long-term investments | Asset-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	250	3,044
Gross Unrealized Gains		2
Estimated Fair Market Value	250	3,046
Long-term investments | U.S. government securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	5,005
Gross Unrealized Gains	3
Estimated Fair Market Value	5,008
Long-term investments | Common Trust Fund
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	120
Gross Unrealized Losses	(4)
Estimated Fair Market Value	116
Long-term investments | Insurance Company Contract
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	16
Estimated Fair Market Value	16
Long-term investments | Mortgage-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		1,803
Gross Unrealized Gains		5
Gross Unrealized Losses		(3)
Estimated Fair Market Value		1,805
Long-term investments | Municipal debt securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		851
Estimated Fair Market Value		851
Cash
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	3,300	1,436
Estimated Fair Market Value	3,300	1,436
Cash equivalents | Commercial paper
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	8,296	12,445
Gross Unrealized Gains	1	1
Estimated Fair Market Value	8,297	12,446
Cash equivalents | Money markets accounts
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	11,905	2,501
Estimated Fair Market Value	11,905	2,501
Cash equivalents | Money market funds
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	19,221	3,879
Estimated Fair Market Value	19,221	3,879
Total cash, cash equivalents, and investments
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	65,641	47,229
Gross Unrealized Gains	9	21
Gross Unrealized Losses	(12)	(7)
Estimated Fair Market Value	65,638	47,243
Agency bond | Short-term investments
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	1,504
Gross Unrealized Gains	1
Estimated Fair Market Value	$ 1,505

XML

Consolidated Statements of Stockholders' Equity (Deficit) (USD $) In Thousands, except Share data	Total	Series CC preferred stock	Series BB preferred stock	Preferred Stock	Preferred Stock Series CC preferred stock	Preferred Stock Series BB preferred stock	Common Stock	Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Accumulated deficit
Beginning Balances at Feb. 28, 2011	$ (34,027)			$ 83,346			$ 6	$ 222,882		$ (340,261)
Beginning Balances (in shares) at Feb. 28, 2011				13,794,000			5,739,000
Exercise of stock options (in shares)							171,000
Exercise of stock options	89							89
Vesting of early-exercised stock options (in shares)							224,000
Vesting of early-exercised stock options	78							78
Issuance of preferred stock upon exercise of warrants (in shares)					13,000
Issuance of preferred stock upon exercise of warrants		145			145
Share-based compensation expense	727							727
Currency translation adjustment	9								9
Other comprehensive gain (loss)	9
Net loss	(225)									(225)
Ending Balance at Feb. 29, 2012	(33,204)			83,491			6	223,776	9	(340,486)
Ending Balance (in shares) at Feb. 29, 2012				13,807,000			6,134,000
Exercise of stock options (in shares)							588,000
Exercise of stock options	723							723
Vesting of early-exercised stock options (in shares)							107,000
Vesting of early-exercised stock options	37							37
Issuance of preferred stock upon exercise of warrants (in shares)						62,000
Issuance of preferred stock upon exercise of warrants			700			700
Conversion of preferred stock to common stock (in shares)				(13,869,000)			14,845,000
Conversion of preferred stock to common stock				(84,191)			15	84,176
Issuance of common stock in connection with public offering, net of underwriting discounts, commissions and issuance costs (in shares)							3,750,000
Issuance of common stock in connection with public offering, net of underwriting discounts, commissions and issuance costs	49,330						4	49,326
Repurchase of fractional shares resulting from reverse stock split (in shares)
Repurchase of fractional shares resulting from reverse stock split	(3)							(3)
Share-based compensation expense	2,245							2,245
Other comprehensive gain (loss)	(26)								(26)
Net loss	(709)									(709)
Ending Balance at Feb. 28, 2013	19,093						25	360,280	(17)	(341,195)
Ending Balance (in shares) at Feb. 28, 2013							25,424,000
Exercise of stock options (in shares)	805,776						806,000
Exercise of stock options	2,498						1	2,497
Vesting of early-exercised stock options (in shares)							19,000
Vesting of early-exercised stock options	7							7
Vesting of restricted stock units (in shares)							18,000
Vesting of restricted stock units	(199)							(199)
Issuance of common stock in connection with the acquisition of ICON (in shares)							451,000
Issuance of common stock in connection with the acquisition of ICON	8,849						1	8,848
Issuance of common stock in connection with public offering, net of underwriting discounts, commissions and issuance costs (in shares)							2,107,000
Issuance of common stock in connection with public offering, net of underwriting discounts, commissions and issuance costs	49,089						2	49,087
Share-based compensation expense	5,511							5,511
Other comprehensive gain (loss)	48								48
Net loss	(25,072)									(25,072)
Ending Balance at Feb. 28, 2014	$ 59,824						$ 29	$ 426,031	$ 31	$ (366,267)
Ending Balance (in shares) at Feb. 28, 2014							28,825,000

XML

Consolidated Balance Sheet Components

12 Months Ended

Feb. 28, 2014

Consolidated Balance Sheet Components

(4) Consolidated Balance Sheet Components

Consolidated balance sheet components as of the years presented consisted of the following (in thousands):

	February 28 or 29,
	2014			2013			2012
Allowance for doubtful accounts:
Balance, beginning of year	$	55		$	24		$	28
Add: Provision for (recovery of) doubtful accounts		28			90			67
Less write-offs against allowance		(5	)		(59	)		(71	)
Balance, end of year	$	78		$	55		$	24

	February 28,
	2014		2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,215	$	1,109
Other prepaid expenses and other current assets		3,165		1,103
	$	4,380	$	2,212

Software licenses, maintenance and insurance premium financed through capital leases and notes payable included above aggregated $5.1 million as of February 28, 2014. Accumulated amortization on software licenses, maintenance, services and insurance premiums aggregated $2.9 million as of February 28, 2014. Amortization of software licenses held under capital leases and notes payable is included in cost of revenue and operating expenses. Prepaid maintenance, services and insurance are expensed over the term of the agreements.

Specific incremental costs directly associated with the Company’s stock offerings primarily legal, accounting and printing costs, were deferred and reflected as an asset until reclassification to stockholders’ equity (deficit) upon closing of the stock offerings.

	February 28,
	2014			2013
Property and equipment, net:
Computer equipment	$	9,569		$	7,718
Software		9,461			8,543
Furniture and fixtures		214			119
Leasehold improvements		511			484
		19,755			16,864
Less accumulated depreciation and amortization		(16,324	)		(14,426	)
	$	3,431		$	2,438

	February 28 or 29,
	2014			2013			2012
Accumulated depreciation and amortization of property and equipment:
Balance, beginning of year	$	14,426		$	14,485		$	21,026
Add: Depreciation and amortization		2,027			1,616			1,526
Less: disposals, write-offs and other		(129	)		(1,675	)		(8,067	)
Balance, end of year	$	16,324		$	14,426		$	14,485

Property and equipment financed through capital leases and notes payable included above aggregated $3.4 million and $0.7 million as of February 28, 2014 and 2013. Accumulated amortization on these assets aggregated $1.0 million and $0.1million as of February 28, 2014 and 2013. Amortization of assets held under capital leases is included with depreciation expense.

	February 28,
	2014		2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	7,494	$	7,701
Trade accounts payable		3,242		1,582
Accrued taxes and other		1,630		1,486
	$	12,366	$	10,769

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Income (Loss) before Income Taxes for Domestic and Foreign Operations (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
United States	$ (24,341)	$ (799)	$ 121
Foreign	(1,232)	354	(268)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest, Total	$ (25,573)	$ (445)	$ (147)

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Functional Classification of Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 29, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	$ 5,511	$ 2,245	$ 727
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	1,641	621	203
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	460	184	84
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	2,035	749	259
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	$ 1,375	$ 691	$ 181

XML

Consolidated Balance Sheet Components (Tables)

12 Months Ended

Feb. 28, 2014

Components of Consolidated Balance Sheet

Consolidated balance sheet components as of the years presented consisted of the following (in thousands):

	February 28 or 29,
	2014			2013			2012
Allowance for doubtful accounts:
Balance, beginning of year	$	55		$	24		$	28
Add: Provision for (recovery of) doubtful accounts		28			90			67
Less write-offs against allowance		(5	)		(59	)		(71	)
Balance, end of year	$	78		$	55		$	24

	February 28,
	2014		2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,215	$	1,109
Other prepaid expenses and other current assets		3,165		1,103
	$	4,380	$	2,212

Software licenses, maintenance and insurance premium financed through capital leases and notes payable included above aggregated $5.1 million as of February 28, 2014. Accumulated amortization on software licenses, maintenance, services and insurance premiums aggregated $2.9 million as of February 28, 2014. Amortization of software licenses held under capital leases and notes payable is included in cost of revenue and operating expenses. Prepaid maintenance, services and insurance are expensed over the term of the agreements.

Specific incremental costs directly associated with the Company’s stock offerings primarily legal, accounting and printing costs, were deferred and reflected as an asset until reclassification to stockholders’ equity (deficit) upon closing of the stock offerings.

	February 28,
	2014			2013
Property and equipment, net:
Computer equipment	$	9,569		$	7,718
Software		9,461			8,543
Furniture and fixtures		214			119
Leasehold improvements		511			484
		19,755			16,864
Less accumulated depreciation and amortization		(16,324	)		(14,426	)
	$	3,431		$	2,438

	February 28 or 29,
	2014			2013			2012
Accumulated depreciation and amortization of property and equipment:
Balance, beginning of year	$	14,426		$	14,485		$	21,026
Add: Depreciation and amortization		2,027			1,616			1,526
Less: disposals, write-offs and other		(129	)		(1,675	)		(8,067	)
Balance, end of year	$	16,324		$	14,426		$	14,485

Property and equipment financed through capital leases and notes payable included above aggregated $3.4 million and $0.7 million as of February 28, 2014 and 2013. Accumulated amortization on these assets aggregated $1.0 million and $0.1million as of February 28, 2014 and 2013. Amortization of assets held under capital leases is included with depreciation expense.

	February 28,
	2014		2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	7,494	$	7,701
Trade accounts payable		3,242		1,582
Accrued taxes and other		1,630		1,486
	$	12,366	$	10,769

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Summary of Customers Accounting 10% or More of Revenue or Accounts Receivable (Detail)	12 Months Ended
	Feb. 28, 2014		Feb. 28, 2013	Feb. 29, 2012
Accounts Receivable | Customer A
Segment Reporting Information [Line Items]
Concentration Risk Percentage	24.00%		16.00%	11.00%
Accounts Receivable | Customer B
Segment Reporting Information [Line Items]
Concentration Risk Percentage	20.00%		16.00%		[1]
Accounts Receivable | Customer C
Segment Reporting Information [Line Items]
Concentration Risk Percentage		[1]	13.00%	14.00%
Revenue | Customer A
Segment Reporting Information [Line Items]
Concentration Risk Percentage		[1]	12.00%	15.00%
Revenue | Customer B
Segment Reporting Information [Line Items]
Concentration Risk Percentage		[1]
Revenue | Customer C
Segment Reporting Information [Line Items]
Concentration Risk Percentage		[1]	15.00%	17.00%

[1] Indicates less than 10%

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Feb. 28, 2014 Segment	Feb. 28, 2013	Feb. 29, 2012
Significant Of Accounting Policies [Line Items]
Net cash provided by (used in) operating activities	$ (11,688,000)	$ (957,000)	$ (826,000)
Net cash provided by (used in) financing activities	41,498,000	39,171,000	2,750,000
Charges related to goodwill impairment	0
Internal use software, capitalized	2,000,000	1,500,000
Internal use software, amortization expense	1,400,000	1,000,000	500,000
Internal use software, net book value	1,300,000	1,900,000	600,000
Long-lived asset impairment charges	0	0	0
Revenue impact of the adoption of new accounting guidance	10,900,000
Deferred revenue	1,587,000	1,898,000
Advertising expenses	1,100,000	1,000,000	1,100,000
Requisite service period of stock based compensation associated with employees and directors	4 years	4 years
Unrealized exchange gains or losses	100,000	0	100,000
Net transaction gains, including gains from foreign currency contracts	500,000	200,000	0
Reportable segment	1
Adjustments for Change in Accounting Principle
Significant Of Accounting Policies [Line Items]
Net cash provided by (used in) operating activities			(550,000)
Net cash provided by (used in) financing activities			$ 550,000
Minimum
Significant Of Accounting Policies [Line Items]
Property and equipment, useful life	2 years
Maximum
Significant Of Accounting Policies [Line Items]
Intangible assets estimated useful lives	5 years
Property and equipment, useful life	3 years

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Net Loss Per Share

12 Months Ended

Feb. 28, 2014

Net Loss Per Share

(14) Net Loss Per Share

Basic net loss per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income by the weighted-average number of common shares outstanding, including potential dilutive common stock equivalents using the treasury stock method.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):

	Years Ended February 28 or 29,
	2014			2013			2012
Net loss	$	(25,072	)	$	(709	)	$	(225	)
Basic shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
	$	26,415		$	17,490		$	5,918
Diluted shares:
Weighted average common shares outstanding		26,415			17,547			6,165
Less: Weighted average unvested common shares subject to repurchase or cancellation		—			(57	)		(247	)
		26,415			17,490			5,918
Net loss per share:
Basic	$	(0.95	)	$	(0.04	)	$	(0.04	)
Diluted	$	(0.95	)	$	(0.04	)	$	(0.04	)

The following outstanding shares, options, awards and warrants were excluded from the computation of diluted net loss per share in the periods presented because including them would have had an antidilutive effect (in thousands):

	Years Ended February 28 or 29,
	2014		2013		2012
Options to purchase common stock		1,276		2,038		999
Convertible preferred stock		—		—		14,771
Preferred stock warrants		—		—		189
Unvested common shares subject to repurchase		—		57		126
Restricted stock units		379		47		—