~~We have limited experience with respect to determining the optimal prices for our products.~~

In the past, we have sometimes adjusted our prices either for individual customers in connection with long-term agreements or for a particular product. We expect that we may need to change our pricing in future periods. Further, as competitors introduce new products that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers based on our historical pricing. As we expand internationally, we also must determine the appropriate price to enable us to compete effectively internationally. In addition, if our mix of products sold changes, then we may need to, or choose to, revise our pricing. As a result, we may be required or choose to reduce our prices or change our pricing model, which could harm our business, results of operations and financial condition.

~~We may face exposure to foreign currency exchange rate fluctuations.~~

Today, our international contracts are sometimes denominated in local currencies. However, the majority of our international costs are denominated in local currencies. Over time, an increasing portion of our international contracts may be denominated in local currencies. Therefore, fluctuations in the value of the U.S. dollar and foreign currencies may affect our results of operations when translated into U.S. dollars. We do not currently engage in currency hedging activities to limit the risk of exchange rate fluctuations. However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

Future acquisitions, strategic investments, partnerships or alliances could be difficult to identify and integrate, divert the attention of key management personnel, disrupt our business, dilute stockholder value and harm our results of operations and financial condition.

We have in the past acquired, and we may in the future seek to acquire or invest in, businesses, products or technologies that we believe could complement or expand our current platform, enhance our technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. In addition, we have limited experience in acquiring other businesses. If we acquire additional businesses, we may not be able to successfully integrate and retain the acquired personnel, integrate the acquired operations and technologies, or effectively manage the combined business following the acquisition.

We may not be able to find and identify desirable acquisition targets or we may not be successful in entering into an agreement with any one target. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, or in adverse tax consequences or unfavorable accounting treatment, which could harm our results of operations. We may also experience delays or reductions in customer purchases for both us and the acquired business, disruption of partner relationships, claims and disputes with stockholders or third parties, unforeseen integration or other expenses, and future impairment of goodwill or other acquired intangible assets. In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer.

~~Our customers may fail to pay us in accordance with the terms of their agreements, necessitating action by us to compel payment.~~

We typically enter into multiple year, non-cancelable arrangements with our customers. If customers fail to pay us under the terms of our agreements, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the terms of our contracts, including litigation. The risk of such negative effects increases with the term length of our customer arrangements. Furthermore, some of our customers may seek bankruptcy protection or other similar relief and fail to pay amounts due to us, or pay those amounts more slowly, either of which could adversely affect our business, results of operations and financial condition.

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

We currently maintain offices and have sales personnel outside the United States in the United Kingdom, Canada and Australia, and we intend to expand our international operations. In fiscal 2017 and 2018, our international revenue was 13% and 15%, respectively, of our total revenue. Any international expansion efforts that we may undertake may

~~not be successful. In addition, conducting international operations subjects us to new risks, some of which we have not generally faced in the United States. These risks include, among other things:~~

~~unexpected costs and errors in the localization of our products, including translation into foreign languages and adaptation for local practices and regulatory requirements;~~

~~lack of familiarity and burdens of complying with foreign laws, legal standards, privacy standards, regulatory requirements, tariffs and other barriers;~~

~~laws and business practices favoring local competitors or commercial parties;~~

~~costs and liabilities related to compliance with the GDPR and disparate data privacy standards and enforcement;~~

~~practical difficulties of enforcing intellectual property rights in countries with fluctuating laws and standards and reduced or varied protection for intellectual property rights in some countries;~~

~~unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;~~

~~difficulties in managing systems integrators and technology partners;~~

~~differing technology standards;~~

~~longer accounts receivable payment cycles and difficulties in collecting accounts receivable;~~

~~difficulties in managing and staffing international operations and differing employer/employee relationships and local employment laws;~~

~~fluctuations in exchange rates that may increase the volatility of our foreign-based revenue; and~~

~~potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems and restrictions on the repatriation of earnings.~~

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 operations in other countries will produce desired levels of revenue or profitability.

We have not engaged in currency hedging activities to limit risk of exchange rate fluctuations. Changes in exchange rates affect our costs and earnings, and may also affect the book value of our assets located outside the United States and the amount of our stockholders’ equity.

We have limited experience in marketing, selling and supporting our platform abroad. Our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake will not be successful. If we invest substantial time and resources to expand our international operations and are unable to do so successfully and in a timely manner, our business and results of operations will suffer.

~~We may be required to defer recognition of some of our revenue, which may harm 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, among other things, whether:~~

~~the transaction involves both current products and products that are under development;~~

~~the customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our products;~~

~~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 GAAP, we must have very precise terms in our contracts to recognize revenue when we initially provide access to our platform 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 platform and could adversely affect our short-term financial results.

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.

Our international operations may give rise to potentially adverse tax consequences.

We are expanding our international operations and staff to better support our growth into the international markets. Our corporate structure and associated transfer pricing policies anticipate future growth into the international markets. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions, which are generally required to be computed on an arm’s-length basis pursuant to intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Changes in tax laws or regulations in the various tax jurisdictions we are subject to that are applied adversely to us or our customers could increase the costs of our products and harm our business.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time. Those enactments could harm our domestic and international business operations, and our business and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. These events could require us or our customers to pay additional tax amounts on a prospective or retroactive basis, as well as require us or our customers to pay fines and/or penalties and interest for past amounts deemed to be due. If we raise our prices to offset the costs of these changes, existing and potential future customers may elect not to purchase our products in the future. Additionally, new, changed, modified or newly interpreted or applied tax laws could increase our customers’ and our compliance, operating and other costs, as well as the costs of our products. Further, these events could decrease the capital we have available to operate our business. Any or all of these events could harm our business and financial performance.

As a multinational organization, we may be subject to taxation in several jurisdictions around the world with increasingly complex tax laws, the application of which can be uncertain. The amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates, new tax laws or revised interpretations of existing tax laws and precedents, which could harm our liquidity and results of operations. In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest and penalties, and the authorities could claim that various withholding requirements apply to us or our subsidiaries or assert that benefits of tax treaties are not available to us or our subsidiaries, any of which could harm us and our results of operations.

~~Comprehensive~~Our business may be subject to additional obligations to collect and remit sales tax ~~reform legislation could adversely affect our business and financial condition.~~

On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act” (“TCJA”) that significantly reforms the Internal Revenue Code of 1986, as amended (the “Code”). The TCJA, among other things, includes changes to U.S. federal tax rates, imposes significant additional limitations on the deductibility of interest and net operating loss carryforwards, allows for the expensing of capital expenditures, and puts into effect the migration from a “worldwide” system of taxation to a territorial system. We continue to examine the impact this tax reform legislation may have on our business. The impact of this tax reform is uncertain and could be adverse.

~~We depend on our executive officers~~ and other ~~key employees,~~taxes, and ~~the loss of one~~we may be subject to tax liability for past sales. Any successful action by state, foreign or ~~more of these employees~~other authorities to collect additional or ~~an inability to attract and retain other highly skilled employees~~past sales tax could harm our business.

~~Our success depends largely upon~~States and some local taxing jurisdictions have differing rules and regulations governing sales and use taxes, and these rules and regulations are subject to varying interpretations that may change over time. In particular, the ~~continued services~~applicability of sales taxes to our ~~executive officers~~platform in various jurisdictions is unclear. It is possible that we could face sales tax audits and that our liability for these taxes could exceed our estimates as state tax authorities could still assert that we are obligated to collect additional amounts as taxes from our customers and remit those taxes to those authorities. We could also be subject to audits in states and international jurisdictions for which we have not accrued tax liabilities. A successful assertion that we should be collecting additional sales or other ~~key employees. We rely~~taxes on our ~~leadership team~~service in jurisdictions where we have not historically done so and do not accrue for sales taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing our products or otherwise harm our business, results of operations and financial condition.

We file sales tax returns in certain states within the ~~areas~~United States as required by law and certain customer contracts for a portion of research and development, operations, security, marketing, sales, customer support, general and administrative functions, and on individual contributors in our research and development and operations functions. From time to time, there may be changes in our executive management team resulting from the ~~hiring or departure of executives, which could disrupt our business.~~products that we provide. We do not ~~have employment agreements with our executive officers~~collect sales or other ~~key personnel~~similar taxes in other states and many of such states do not apply sales or similar taxes to the vast majority of the products that ~~require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. The loss of~~we provide. However, one or more ~~of our executive officers, especially our Chief Executive Officer~~states or ~~Chief Operating Officer,~~foreign authorities could seek to impose additional sales, use or ~~key employees could harm our business. Changes in our executive management team~~other tax collection and record-keeping obligations on us or may determine that such taxes should have, but have not been, paid by us. Liability for past taxes may also ~~cause disruptions in,~~include substantial interest and ~~harm to, our business.~~penalty charges. Any successful action by state,

In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers experienced in designing and developing software and SaaS applications and experienced sales professionals. We have, from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors

foreign or other ~~companies, their former employers may attempt~~authorities to ~~assert that these employees~~compel us to collect and remit sales tax, use tax or we have breached their legal obligations, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, it may harm our ability to recruit and retain highly skilled employees. If we fail to attract new personnelother taxes, either retroactively, prospectively or ~~fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.~~

~~Our management team has limited experience managing a public company.~~

Most members of our management team have limited experience managing a publicly-traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, whichboth, could harm our business, results of operations and financial condition.

Our ~~failure~~ability to ~~raise additional capital or generate cash flows necessary~~use our net operating loss carry-forwards and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three year period, the corporation’s ability to ~~expand our operations~~use its pre-change net operating loss carry-forwards and ~~invest~~other pre-change tax attributes, such as research tax credits and distributed interest deduction carryover, to offset its post-change income may be limited. We have experienced ownership changes in ~~new technologies~~the past and any such ownership change in the future could ~~reduce~~result in increased future tax liability. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to ~~compete successfully and harm~~use our ~~results of operations.~~

~~We may need~~pre-change net operating loss carry-forwards 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. If we engage in additional debt financing, weoffset U.S. federal taxable income may be ~~required~~subject to ~~accept terms that restrict our~~limitations, which could potentially result in increased future tax liability to us.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which included temporary relief from the net operating loss limitations imposed by the Tax Cuts and Jobs Act for tax years beginning after December 31, 2017 and before January 1, 2021, and made certain technical corrections to applying the net operating loss utilization limitations for tax years beginning after January 1, 2021.

Our ability to ~~incur additional indebtedness, force us~~use our net operating losses is conditioned upon generating future U.S. federal taxable income. Since we do not know whether or when we will generate the U.S. federal taxable income necessary to ~~maintain specified liquidity or other ratios or restrict~~use our ~~ability to pay dividends or make acquisitions. If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things:~~

~~develop and enhance our products;~~

~~continue to expand our product development, sales and marketing organizations;~~

~~hire, train and retain employees;~~

~~respond to competitive pressures or unanticipated working capital requirements; or~~

~~pursue acquisition opportunities.~~

~~In addition, access~~remaining net operating losses, these net operating loss carryforwards generated prior to our ~~existing line of credit with Silicon Valley Bank is subject to certain financial and other covenants. Our inability to abide by these covenants or do any of the foregoing~~tax year ended January 31, 2018 could ~~reduce our ability to compete successfully and harm our business, results of operations and financial condition.~~expire unused.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the Securities and Exchange Commission, or SEC, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. For example, we have worked to improve the controls around our key accounting processes and our quarterly close process, we have implemented a number of new systems to supplement our core ERP system as part of our control environment, and we have hired additional accounting and finance personnel to help us implement these processes and controls. In order to maintain ~~and improve~~ the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses or significant deficiencies in our controls.

Our ~~current~~ controls ~~and any new controls that we develop~~ may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to ~~develop or~~ maintain effective controls ~~or any difficulties encountered in their implementation or improvement~~ could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to ~~implement and~~ maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we ~~will eventually be~~are required to include in our periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the ~~NASDAQ.~~Nasdaq. We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial ~~reporting commencing with our second annual report on Form 10-K.~~reporting.

Our independent registered public accounting firm is ~~not~~ required to formally attest to the effectiveness of our internal control over financial reporting ~~until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our~~annually. Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could harm our business and results of operations and could cause a decline in the price of our Class A common stock.

Changes in existing financial accounting standards or practices, or taxation rules or practices, may harm our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could harm our results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective.

~~GAAP is~~Accounting principles generally accepted in the United States (GAAP) are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change. ~~For example, in May 2014 the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)(ASU 2014-09)~~, for which certain elements may impact our accounting for revenue and costs incurred to acquire contracts. Under this new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. This new standard is effective for our interim and annual periods beginning February 1, 2018, and we expect this new

standard to have a material impact on the amount and timing of the costs incurred to acquire contracts. Refer to Note 2 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on the new guidance and its potential impact on us. Adoption of ~~this standard~~such new standards and any difficulties in implementation of changes in accounting principles, including the ability to modify our accounting systems, could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include, but are not limited to those related to revenue recognition, ~~capitalized internal-use software costs,~~period of benefit for deferred commissions, incremental borrowing rates for operating leases, effective interest rates for convertible notes, valuation of deferred income ~~taxes, other non-income~~ taxes, business combination and valuation of goodwill and purchased intangible ~~assets and stock-based compensation.~~assets. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock.

~~Catastrophic events may disrupt our business.~~

~~We may be subject to liability claims if we breach our contracts and our insurance may be inadequate to cover our losses.~~

We are subject to numerous obligations in our contracts with our customers and partners. Despite the procedures, systems and internal controls we have implemented to comply with our contracts, we may breach these commitments, whether through a weakness in these procedures, systems and internal controls, negligence or the willful act of an employee or contractor. Our insurance policies, including our errors and omissions insurance, may be inadequate to compensate us for the potentially significant losses that may result from claims arising from breaches of our contracts, disruptions in our services, including those caused by cybersecurity incidents, failures or disruptions to our infrastructure, catastrophic events and disasters or otherwise. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention.

~~We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.~~

We are an “emerging growth company,” as defined in the JOBS Act, and we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including 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 a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Class A common stock less attractive because we will rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and the price of our Class A common stock may be more volatile.

~~Exposure to political developments in the United Kingdom, including the outcome of the U.K. referendum on membership in the EU, could harm us.~~

On June 23, 2016, a referendum was held on the United Kingdom’s membership in the European Union, the outcome of which was a vote in favor of leaving the European Union. The United Kingdom’s vote to leave the European Union creates an uncertain political and economic environment in the United Kingdom and potentially across other EU member states, which may last for a number of months or years.

The result of the referendum means that the long-term nature of the United Kingdom’s relationship with the European Union is unclear and that there is considerable uncertainty as to when any such relationship will be agreed and implemented. The political and economic instability created by the United Kingdom’s vote to leave the European Union has caused and may continue to cause significant volatility in global financial markets and the value of the British Pound or other currencies, including the Euro. Depending on the terms reached regarding any exit from the European Union, it is possible that there may be adverse practical or operational implications on our business.

Our business may be subject to additional obligations to collect and remit sales tax and other taxes, and we may be subject to tax liability for past sales. Any successful action by state, foreign or other authorities to collect additional or past sales tax could harm our business.

~~States and some local taxing jurisdictions have differing rules and regulations governing sales and use taxes, and these rules and regulations are subject to varying interpretations that may change~~over time. In particular, the applicability of sales taxes to our platform in various jurisdictions is unclear. It is possible that we could face sales tax audits and that our liability for these taxes could exceed our estimates as state tax authorities could still assert that we are obligated to collect additional amounts as taxes from our customers and remit those taxes to those authorities. We could also be subject to audits in states and international jurisdictions for which we have not accrued tax liabilities. A successful assertion that we should be collecting additional sales or other taxes on our services in jurisdictions where we have not historically done so and do not accrue for sales taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing our products or otherwise harm our business, results of operations and financial condition.

We file sales tax returns in certain states within the United States as required by law and certain customer contracts for a portion of the products that we provide. We do not collect sales or other similar taxes in other states and many of such states do not apply sales or similar taxes to the vast majority of the products that we provide. However, one or more states or foreign authorities could seek to impose additional sales, use or other tax collection and record-keeping obligations on us or may determine that such taxes should have, but have not been, paid by us. Liability for past taxes may also include substantial interest and penalty charges. Any successful action by state, foreign or other authorities to compel us to collect and remit sales tax, use tax or other taxes, either retroactively, prospectively or both, could harm our business, results of operations and financial condition.

~~Our ability to use our net operating loss carry-forwards and certain other tax attributes may be limited.~~

Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three year period, the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. We have experienced ownership changes in the past and any such ownership change in the future could result in increased future tax liability. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carry-forwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

Risks Related to Ownership of Our Class A Common Stock

The stock price of our Class A common stock may be volatile or may ~~decline regardless of our operating performance.~~decline.

Prior to our IPO, there was no public market for shares of our Class A common stock. The market prices of the securities of other newly public companies have historically been highly ~~volatile.~~volatile, and our stock price has been volatile since our IPO. The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, but not limited to:

•overall performance of the equity markets and/or publicly-listed technology companies;

•actual or anticipated fluctuations in our revenue or other financial or operating metrics;

•changes in the financial projections we provide to the public or our failure to meet these projections;

•failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates and/or recommendations by any securities analysts who follow our ~~company, or~~ company;

•our failure to meet the estimates or the expectations of securities analysts or investors;

•recruitment or departure of key personnel;

•significant security breaches, technical difficulties or interruptions of our ~~services;~~service;

•the economy as a whole and market conditions in our industry;

•rumors and market speculation involving us or other companies in our industry;

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

•new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

•lawsuits threatened or filed against us;

•other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and

•sales of additional shares of our Class A common stock by us, our directors, our officers or our stockholders.

In addition, 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. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business.

The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our IPO, including our directors, executive officers, and their affiliates, who held in the aggregate ~~59.0%~~48% of the voting power of our capital stock as of January 31, ~~2018.~~2021. This will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.

Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. As of January 31, ~~2018,~~2021, our directors, executive officers and their affiliates held in the aggregate ~~59.0% of~~48% the voting power of our capital stock. Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively could continue to control nearly a majority of the combined voting power of our common stock and ~~therefore~~ be able to effectively control all matters submitted to our stockholders for approval until April 12, 2027, the date that is the ten year anniversary of the closing of our IPO. This concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents,and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.

Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning purposes. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who have retained their shares.

Sales of a substantial ~~amounts~~number of shares of our Class A common stock in the public markets, or the perception that sales might occur, could cause the market price of our Class A common stock to decline.

Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers and principal stockholders, or the perception that these sales might occur, could cause the market price of our Class A common stock to decline.

In addition, ~~as of January 31, 2018,~~ we ~~had 24,836,949 options outstanding that, if fully exercised, would result in the issuance of Class B common stock and 80,096~~have options outstanding that, if fully exercised, would result in the issuance of shares of our Class A and Class B common stock. ~~As of January 31, 2018, we~~We also ~~had 2,862,929~~have restricted stock units ~~(“RSUs”)~~(RSUs) outstanding that, if vested and settled, would result in the issuance of shares of Class A common stock. All of the shares of Class A and Class B common stock issuable upon the exercise of stock options and vesting of RSUs and the shares reserved for future issuance under our equity incentive plans, are registered for public resale under the Securities ~~Act.~~Act of 1933, as amended (Securities Act). Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements.

Furthermore, a substantial number of shares of our Class A common stock is reserved for issuance upon the exercise of the ~~2023~~ Notes (as defined below) and the ~~warrants~~Warrants (as defined below) issued at the time of the issuance of the 2023 ~~Notes.~~Notes (as defined below). If we elect to satisfy our conversion obligation on the ~~2023~~ Notes solely in shares of our Class A common stock upon conversion of the notes, we will be required to deliver the shares of our Class A common stock, together with cash for any fractional share, on the second business day following the relevant conversion date.

As of January 31, 2018, the holders of approximately 21.5 million shares of our common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock issuable upon conversion of such shares or to include such shares in registration statements that we may file for us or other stockholders. Any registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the market price of our Class A common stock to decline or be volatile.

~~The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.~~

We are subject to the reporting requirements of the Exchange Act, the listing standards of NASDAQ and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in filings required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations and financial condition.

If securities or industry analysts do not publish or cease publishing research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common stock and trading volume could decline.

The trading market for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If industry analysts do not publish or cease publishing research on our company, the trading price for our Class A common stock would be negatively affected. If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us on a regular basis, demand for our Class A common stock could decrease, which might cause our Class A common stock price and trading volume to decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. ~~In addition, our credit facility contains restrictions on our ability to pay dividends.~~

Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors, and limit the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated 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:

•provide that our board of directors is classified into three classes of directors with staggered three-year terms;

•permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships;

•require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws;

•authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

•provide that only the Chairperson of our board of directors, our Chief Executive Officer, or a majority of our board of directors are authorized to call a special meeting of stockholders;

•provide for a dual class common stock structure in which holders of our Class B common stock have the ability to effectively control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;

•prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and

•advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations and other transactions between us and holders of 15% or more of our common stock.

Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for:

•any derivative action or proceeding brought on our behalf;

•any action asserting a breach of fiduciary duty;

•any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or

or •any action asserting a claim against us that is governed by the internal affairs doctrine.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

Risks Related to our Outstanding Convertible Notes

Servicing our debt may require a significant amount of cash. We may not have sufficient cash flow from our business to pay our ~~indebtedness,~~indebtedness.

Since February 2018, we have issued convertible notes due in 2023 (2023 Notes), 2025 (2025 Notes) and ~~we may not have the ability to raise the funds necessary to settle for cash conversions of~~2026 (2026 Notes, and together with the 2023 Notes ~~or to repurchase~~and 2025 Notes, the ~~2023 Notes for cash upon a fundamental change, which could adversely affect our business and results of operations.~~

In February 2018, we issued $345 million aggregate principal amount of 0.25% convertible senior notes due 2023, or the 2023 Notes, in a private offering. The interest rate is fixed at 0.25% per annum and is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2018.Notes). Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the ~~2023~~ Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.

~~In addition, holders~~We may not have the ability to raise the funds necessary for cash settlement upon conversion of the ~~2023~~Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes.

Holders of the Notes have the right to require us to repurchase their ~~2023~~ Notes upon the occurrence of a fundamental change (as defined in the ~~indenture~~Indentures governing ~~the 2023~~their respective Notes) at a repurchase price equal to 100% of the principal amount of the ~~2023~~ Notes to be repurchased, plus accrued and unpaid interest, if any. Upon conversion of the ~~2023~~ Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the ~~2023~~ Notes being converted. We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of ~~2023~~ Notes surrendered ~~therefor~~ or ~~2023~~ Notes being converted. In

addition, our ability to repurchase the ~~2023~~ Notes or to pay cash upon conversions of the ~~2023~~ Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase ~~2023~~ Notes at a time when the repurchase is required by the indenture governing ~~the~~such notes or to pay any cash payable on future conversions of the ~~2023~~ Notes as required by such indenture would constitute a default under such indenture. A default under the indenture governing the Notes or the fundamental change itself could also lead to a default under

agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the ~~2023~~ Notes or make cash payments upon ~~conversions thereof.~~conversions.

In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could:

•make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;

•limit our flexibility in planning for, or reacting to, changes in our business and our industry;

•place us at a disadvantage compared to our competitors who have less debt;

•limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes; and

•make an acquisition of our company less attractive or more difficult.

Any of these factors could harm our business, results of operations and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.

The conditional conversion feature of the ~~2023~~ Notes, if triggered, may adversely affect our financial condition and ~~operating results.~~

results of operations.

In the event the conditional conversion feature of the ~~2023~~ Notes is triggered, holders of ~~2023~~the Notes will be entitled to convert the ~~2023~~ Notes, as applicable, at any time during specified periods at their option. If one or more holders elect to convert their ~~2023~~ Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. As disclosed in Note 9 to our consolidated financial statements, the conditional conversion features of the 2023 Notes and 2025 Notes were triggered as of January 31, 2021, and the 2023 Notes and 2025 Notes are currently convertible at the option of the holders, in whole or in part, between February 1, 2021 and April 30, 2021. Whether the 2023 Notes or 2025 Notes will be convertible following such fiscal quarter will depend on the continued satisfaction of this condition or another conversion condition in the future. From the date of issuance through January 31, 2021, the conditions allowing holders of the 2026 Notes to convert were not met.

In addition, even if holders do not elect to convert their ~~2023~~ Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The 2023 Notes and 2025 Notes were classified as current liabilities on the consolidated balance sheet as of January 31, 2021.

Transactions relating to our ~~2023~~ Notes may affect the value of our Class A common stock.

The conversion of some or all of the ~~2023~~ Notes would dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our Class A common stock upon any conversion of such ~~2023~~ Notes. Our ~~2023~~ Notes may become in the future convertible at the option of their holders under certain circumstances. If holders of our ~~2023~~ Notes elect to convert their notes, we may settle our conversion obligation by delivering to them a significant number of shares of our Class A common stock, which would cause dilution to our existing stockholders.

In addition, in connection with the issuance of the 2023 Notes, we entered into convertible note ~~hedge transactions~~hedges (Note Hedges) with certain financial institutions (the ~~"Option Counterparties")~~2023 Notes Option Counterparties). We also entered into warrant transactions with the 2023 Notes Option Counterparties pursuant to which we sold warrants for the purchase of our Class A common ~~stock.~~stock (Warrants). The ~~convertible note hedge transactions~~Note Hedges are expected generally to reduce the potential dilution to our Class A common stock upon any conversion or settlement of the 2023 Notes and/or offset any cash payments we

are required to make in excess of the principal amount of converted 2023 Notes, as the case may be. The ~~warrant~~Warrant transactions could separately have a dilutive effect to the extent that the market price per share of our Class A common stock exceeds the strike price of any ~~warrants~~Warrants unless, subject to the terms of the ~~warrant~~Warrant transactions, we elect to cash settle the ~~warrants.~~Warrants. Through January 31, 2021, Note Hedges corresponding to approximately 6.3 million shares have been terminated or settled. As of January 31, 2021, Note Hedges giving us the option to purchase approximately 0.8 million shares (subject to adjustment) remained outstanding. Through January 31, 2021, we have terminated Warrants corresponding to approximately 6.1 million shares. As of January 31, 2021, Warrants to acquire up to approximately 1.0 million shares (subject to adjustment) remained outstanding.

In addition, in connection with the issuance of the 2025 Notes and 2026 Notes, we entered into capped call transactions (Capped Calls) with certain financial institutions (the 2025 Notes and 2026 Notes Capped Call Counterparties and together with the 2023 Notes Option Counterparties, the Option Counterparties). The Capped Calls are generally expected to reduce potential dilution to our Class A common stock upon any conversion or settlement of the 2025 Notes and 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2025 Notes and 2026 Notes, as the case may be, with such reduction and/or offset subject to a cap.

From time to time, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the ~~2023~~ Notes. This activity could cause a decrease in the market price of our Class A common stock.

The accounting method for convertible debt securities that may be settled in cash, such as the ~~2023~~ Notes, could have a material effect on our reported financial results.

Under ~~Financial Accounting Standards Board~~FASB Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20), ~~which we refer to as ASC 470-20,~~ an entity must separately account for the liability and equity components of convertible debt instruments (such as the ~~2023~~ Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. ASC 470-20 requires the value of the conversion ~~option~~options of the ~~2023~~ Notes, representing the equity component, to be recorded as additional paid-in capital within stockholders’ equity in our consolidated balance sheet and as a discount to the ~~2023~~ Notes, which reduces their initial carrying value. The carrying value of the ~~2023~~ Notes, net of the applicable discount recorded, will be accreted up to the principal amount of the ~~2023~~ Notes, as the case may be, from the issuance date until maturity, which will result in non-cash charges to interest expense in our consolidated statement of operations. Accordingly, we will report lower net income or higher net loss in our financial results because ASC 470-20 requires interest to include both the current period’s accretion of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the trading price of our Class A common stock and the respective trading price of the ~~2023~~ Notes.

In addition, under certain circumstances, convertible debt instruments (such as the 2023 Notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the 2023 Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the 2023 Notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of Class A common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accountingAccounting standards in the future will result in changes to the current ASC 470-20 accounting model. The FASB issued an accounting standards update that eliminates the liability and equity component separation model for convertible debt instruments with a cash conversion feature. Among other potential impacts, this change is expected to reduce reported interest expense, increase reported net income or lower net loss and result in a reclassification of certain balance sheet amounts from stockholders' equity to liabilities as it relates to the Notes.

General Risk Factors

We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.

Our success depends largely upon the continued services of our executive officers and other key employees. We rely on our leadership team in the areas of research and development, operations, security, marketing, sales, customer support, general and administrative functions, and on individual contributors in our research and development and operations functions. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, such as the recent retirement of our former President, Worldwide Field Operations and upcoming retirement of our Chief Financial Officer, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to ~~permit~~work for us for any specified period and they could terminate their employment with us at any time. The loss of one or more of our executive officers or key employees, and any failure to have in place and execute an effective succession plan for key executives, could harm our business. Changes in our executive management team may also cause disruptions in, and harm to, our business.

In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the ~~use~~San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers experienced in designing and developing software and SaaS applications and experienced sales professionals. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, and may not be able to fill positions in the desired regions, or at all. Our efforts to attract new personnel may be compounded by intensified restriction on travel (including during the COVID-19 pandemic), changes to immigration policy or the availability of work visas. Many of the ~~treasury stock method.~~companies with which we compete for experienced personnel have greater resources than we have. If we ~~are unable~~hire employees from competitors or other companies, their former employers may attempt to ~~use~~assert that these employees or we have breached their legal obligations, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the ~~treasury stock method in accounting for the shares issuable upon conversion~~value of the ~~2023 Notes, then~~equity awards they receive in connection with their employment. If the perceived value of our ~~diluted earnings per share would~~equity awards declines, it may harm our ability to recruit and retain highly skilled employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.

Catastrophic events may disrupt our business.

Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could harm our business. We have a large employee presence in San Francisco, California and the west coast of the United States contains active earthquake and wildfire zones which have the potential to disrupt our business. For example, in the fall of 2019 and 2020, PG&E shut off power to certain cities in the San Francisco Bay Area in order to reduce the risk of wildfires and this resulted in many of our employees being unable to work remotely. In the event of a major earthquake, hurricane or catastrophic event such as fire, power loss, telecommunications failure, vandalism, cyber-attack, war, terrorist attack or health epidemic (including COVID-19), we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our application development, lengthy interruptions in our products, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition. In addition, the insurance we maintain may be insufficient to cover our losses resulting from disasters, cyber-attacks or other business interruptions, and any incidents may result in loss of, or increased costs of, such insurance.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters is located in San Francisco, California, where we currently lease approximately ~~128,000~~266,366 square feet and 19,129 square feet under a lease, ~~agreements~~as amended, that ~~expire at various times from 2019 through 2024.~~

In December 2017, we entered into an office lease to lease approximately 207,066 rentable square feet in an office building in San Francisco, California expected to become our new corporate headquarters. This lease has a 10 year term, which is expected to expireexpires in October ~~2028.~~2028 and a sublease that expires in August 2021, respectively. The Company is entitled to two five-year options to extend ~~this~~the lease with an October 2028 expiry date, subject to certain requirements.

We also lease ~~facilities~~space in ~~Bellevue, Washington; San Jose, California; Toronto, Canada; London, United Kingdom;~~various locations in North America, Europe and ~~Sydney, Australia. These office leases expire on various dates through August 2024.~~Asia-Pacific.

We believe that our facilities are suitable to meet our current needs. We intend to expand our facilities or add new facilities as we add employees and enter new geographic markets, and we believe that suitable additional or alternative space will be available as needed to accommodate any such growth.

Item 3. Legal Proceedings

~~From time~~We are not a party to ~~time in~~any material legal proceedings on the ~~normal course~~date of ~~business, the Company may be subject~~this report. See Note 11 to ~~various~~our consolidated financial statements "Commitments and Contingencies" for information related to legal ~~matters such as threatened or pending claims or~~ proceedings. ~~There were no material such matters as of January 31, 2018.~~

Item 4. Mine Safety Disclosures

Not Applicable.

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market ~~Price of Our Class A Common Stock~~Information and Holders

Our Class A common stock has been listed on the ~~NASDAQ~~Nasdaq Global Select Market under the symbol "OKTA" since April 7, 2017. Prior to that date, there was no public trading market for our Class A common stock. ~~The following table sets forth for the periods indicated the high and low sale prices per share of our~~Our Class AB common stock ~~as reported~~is not listed or traded on ~~the NASDAQ Global Select Market:~~

Low High
Fiscal year ending January 31, 2018
First Quarter (from April 7, 2017) $ 22.60
$ 26.90
Second Quarter 21.66
28.25
Third Quarter 21.52
33.64
Fourth Quarter 24.93
31.80

any stock exchange.

As of ~~March 7, 2018,~~February 28, 2021, we had ~~185~~37 holders of record of our Class A common stock and 26 holders of record of our Class B common stock. The actual number of Class A beneficial stockholders is substantially greater than ~~this~~the number of holders of record ~~holders and includes stockholders who are beneficial owners but whose shares are~~because a large portion of our Class A common stock is held in street name by brokers and other nominees.

Dividend Policy

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.

Stock Performance Graph

This performance graph shall not be deemed "soliciting material" or to be "filed" with the ~~SEC~~Securities and Exchange Commission (SEC) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the ~~"Exchange Act")~~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 Okta, Inc. under the Securities Act or the Exchange Act.

We have presented below the cumulative total return to our stockholders ~~between~~from April 7, 2017 (the date our Class A common stock commenced trading on the ~~NASDAQ)~~Nasdaq) through January 31, ~~2018~~2021 in comparison to the Standard & Poor’s 500 Index and Standard & Poor Information Technology Index. All values assume a $100 initial investment and data for the Standard & Poor’s 500 Index and Standard & Poor Information Technology Index assume reinvestment of dividends. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our Class A common stock.


Company/Index	Base period 4/7/2017		1/31/2018		1/31/2019		1/31/2020		1/31/2021
Okta	$	100.00	$	125.27	$	350.62	$	544.66	$	1,101.70
S&P 500 Index	100.00		119.88		114.80		136.93		157.68
S&P 500 Information Technology Index	100.00		132.07		129.11		185.80		251.86

Company/Index Base period
4/7/2017 4/30/2017 7/31/2017 10/31/2017 1/31/2018
Okta $ 100.00
$ 110.80
$ 93.36
$ 123.01
$ 125.27
S&P 500 Index 100.00
101.22
104.87
109.33
119.88
S&P 500 Information Technology Index 100.00
103.04
108.82
121.68
132.07

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item with respect to our equity compensation plans is incorporated by reference to our Proxy Statement for the ~~2018~~2021 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended January 31, ~~2018.~~2021.

Unregistered Sales of Equity Securities ~~and Use~~

(a)Unregistered Sales of ~~Proceeds~~


~~(a)~~	~~Unregistered Sales of Equity Securities~~

From February 1, 2017 through January 31, 2018, we issued and sold to our employees and non-employees an aggregate of 926,931 unregistered shares of common stock upon the exercise of options issued under our 2009 Plan at exercise prices ranging from $0.48 to $10.52 per share, for an aggregate exercise price of $2.5 million. From February 1, 2017 through January 31, 2018, we granted to our employees, consultants and other service providers restricted stock awards for an aggregate of 598,500 shares of common stock under our 2009 Plan.Equity Securities

~~From February 1, 2017 through January 31, 2018, we issued 1,000,000 shares of our common stock in connection with a business combination.~~

~~From February 1, 2017 through January 31, 2018, we issued 194,951 shares of our common stock to Silicon Valley Bank in~~In connection with the ~~net exercise~~partial repurchase of ~~warrants.~~

~~We believe these transactions~~the convertible notes due in 2023 (2023 Notes) in June 2020 and the conversion of certain 2023 Notes in August 2020, the Company issued 1,445,927 shares and 214,177 shares of Company Class A common stock on June 12, 2020 and August 31, 2020, respectively. These issuances were ~~exempt~~made in reliance on the exemption from registration ~~under the Securities Act of 1933 in reliance upon~~provided by Section 4(a)(2) of the Securities Act ~~or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)~~of 1933, as amended (Securities Act). The Company relied on this exemption from registration based in part on representations made by the holders of the ~~Securities Act as transactions by an issuer not involving any public offering or~~2023 Notes in the exchange agreements pursuant to ~~benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of~~which the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof. All recipients had adequate access, through their relationships with us, to information about Okta.


~~(b)~~	~~Use of Proceeds from Public Offering of Class A Common Stock~~

~~On April 7, 2017, we closed our initial public offering, in which we sold 12,650,000~~ shares of Class A ~~common stock at a price to the public~~Common Stock were issued.

(b) Issuer Purchases of $17.00 per share, including shares sold in connection with the exercise of the underwriters’ option to purchase additional shares. The offer and sale of all of the shares in the IPO were registered under theEquity Securities Act pursuant to a registration statement on Form S-1 (File No. 333-216654), which was declared effective by the SEC on April 6, 2017. We raised $200.0 million in net proceeds after deducting underwriters’ discounts and commissions of $15.1 million and before deducting offering expenses of approximately $5.6 million. There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on April 7, 2017 pursuant to Rule 424(b). The managing underwriters of our IPO were Goldman, Sachs & Co., J.P. Morgan and Allen & Company LLC. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries and to non-employee directors pursuant to our director compensation policy. Pending the uses described, we have invested or intend to invest the net proceeds in short-term interest-bearing investment-grade securities, certificates of deposit or government securities, pursuant to the investment policy approved by our board of directors.


~~(c)~~	~~Issuer Purchases of Equity Securities~~

None.

~~SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER DATA~~

The following selected consolidated statements of operations data for the years ended January 31, 2018, 2017 and 2016 and the consolidated balance sheet data as of January 31, 2018 and 2017 have been derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read the following selected consolidated financial data and other data below in conjunction with the section titled “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.

Year Ended January 31,
2018 2017 2016
(in thousands, except per share data)
Revenue
Subscription $ 239,177
$ 143,136
$ 76,443
Professional services and other 20,813
17,190
9,464
Total revenue 259,990
160,326
85,907
Cost of revenue
Subscription⁽¹⁾
52,481
34,211
20,684
Professional services and other⁽¹⁾
28,274
21,738
15,340
Total cost of revenue 80,755
55,949
36,024
Gross profit 179,235
104,377
49,883
Operating expenses
Research and development⁽¹⁾
70,821
38,659
28,761
Sales and marketing⁽¹⁾
172,973
118,742
77,915
General and administrative⁽¹⁾
51,803
30,099
19,195
Total operating expenses 295,597
187,500
125,871
Operating loss (116,362 ) (83,123 ) (75,988 )
Other income (expense), net 1,682
39
(19 )
Loss before provision for (benefit from) income taxes (114,680 ) (83,084 ) (76,007 )
Provision for (benefit from) income taxes (321 ) 425
295
Net loss $ (114,359 ) $ (83,509 ) $ (76,302 )
Net loss per share⁽²⁾:

Basic and diluted $ (1.38 ) $ (4.39 ) $ (4.28 )
Weighted-average shares outstanding used to compute net loss per share⁽²⁾:

Basic and diluted 83,004
19,038
17,817


~~(1)~~	~~Amounts include stock-based compensation expense as follows:~~

Year Ended January 31,
2018 2017 2016
(in thousands)
Cost of subscription revenue $ 4,600
$ 1,979
$ 909
Cost of professional services and other revenue 3,137
1,283
553
Research and development 18,107
2,992
1,748
Sales and marketing 13,242
6,029
2,853
General and administrative 10,774
4,844
3,769
Total stock-based compensation expense $ 49,860
$ 17,127
$ 9,832


~~(2)~~	Please refer to Note 13 to our consolidated financial statements for an explanation of the method used to compute the historical net loss per share and the number of shares used in the computation of the per share amounts.

As of January 31,
2018 2017
(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments $ 229,714
$ 37,672
Working capital 124,656
(41,706 )
Total assets 367,397
130,635
Deferred revenue, current and non-current portion 168,667
113,723
Redeemable convertible preferred stock warrant liability —
304
Redeemable convertible preferred stock —
227,954
Total stockholders’ equity (deficit) 163,586
(243,605 )

~~Other Financial Measures and Key Metrics~~ ⁽¹⁾

Year Ended January 31,
2018 2017 2016
(dollars in thousands)
Gross profit $ 179,235
$ 104,377
$ 49,883
Non-GAAP gross profit $ 186,976
$ 107,829
$ 51,535
Gross margin 69 % 65 % 58 %
Non-GAAP gross margin 72 % 67 % 60 %
Operating loss $ (116,362 ) $ (83,123 ) $ (75,988 )
Non-GAAP operating loss $ (65,744 ) $ (65,806 ) $ (65,935 )
Operating margin (45 )% (52 )% (89 )%
Non-GAAP operating margin (25 )% (41 )% (77 )%
Net cash used in operating activities $ (25,240 ) $ (42,101 ) $ (41,536 )
Net cash provided by (used in) investing activities $ (99,704 ) $ 6,965
$ 1,160
Net cash provided by financing activities $ 237,408
$ 457
$ 76,841
Free cash flow $ (37,221 ) $ (53,843 ) $ (48,237 )
Customers (period end) 4,375
3,114
2,225
Calculated billings $ 314,934
$ 194,524
$ 118,023
Dollar-based retention rate for the trailing 12 months ended 121 % 123 % 120 %


~~(1)~~	A reconciliation for each non-GAAP financial measure is included in the "Non-GAAP Financial Measures" section of Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report on Form 10-K.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that is based upon current plans, expectations and beliefs 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 the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K. Our fiscal year ends January 31.

Overview

Okta is the leading independent ~~provider of~~ identity management platform for the enterprise. The Okta Identity Cloud is powered by our category-defining platform that enables our customers to securely connect the right people to ~~technology, anywhere, anytime~~the right technologies and ~~from any device.~~services at the right time. Every day, thousands of organizations and millions of people use Okta to securely access a wide range of cloud, mobile and web applications, ~~websites, mobile applications~~on-premises servers, application program interfaces (APIs), IT infrastructure providers and services from a multitude of devices. ~~Workforces sign into~~Developers leverage our platform to securely and efficiently embed identity into the software they build, allowing them to focus on their core mission. Employees and contractors sign into the Okta Identity Cloud to seamlessly and securely access the applications they need to do their most important work. Organizations use our platform to collaborate with their partners, and to provide their customers with more modern and secure experiences online and via mobile ~~devices,~~devices. Given the growth trends in the number of applications and cloud adoption, and the movement to ~~connect with partners to streamline their operations. Developers leverage our platform to securely embed~~remote workforces, identity ~~into their software.~~

is becoming the most critical layer of an organization’s security. Our approach to identity ~~eliminates duplicative, sprawling credentials and disparate authentication policies, allowing~~allows our customers to simplify and efficiently scale their ~~IT and~~ security infrastructures ~~more efficiently as the number of users, devices, clouds~~across internal IT systems and other technologies in their ecosystem grows. Our customers are able to achieve fast time to value, lower costs and increased efficiency while improving compliance and providing security that is persistent, perimeter-less and context-aware. These benefits are delivered through multiple products on a unified platform, our superior cloud architecture and a vast and increasing network of integrations.external customer facing applications.

We founded the company in 2009 to reinvent identity for the modern cloud era, where identity is the critical foundation for connection and trust between users and technology. Since our inception, we have consistently innovated to enhance our platform and our product offerings.

In parallel to this product innovation, we have rapidly expanded the breadth and depth of the Okta Integration Network, which provides customers with a pre-integrated set of cloud, mobile and web applications that spans the functionality of our products. As of January 31, ~~2018,~~2021, more than 10,000 customers across nearly every industry used the Okta Identity Cloud to secure and manage identities around the world. Our customers consist of leading global organizations ranging from the largest enterprises, to small and medium-sized businesses, universities, non-profits and government agencies. We also partner with leading application, infrastructure and security vendors through our Okta Integration Network. As of January 31, 2021, we had over ~~5,500~~7,000 integrations with these cloud, mobile and web applications and IT infrastructure providers.

We employ a ~~SaaS~~Software-as-a-Service (SaaS) business ~~model.~~model, and generate revenue primarily by selling multi-year subscriptions to our cloud-based offerings. We focus on acquiring and retaining our customers and increasing their spending with us through expanding the number of users who access ~~our platform~~the Okta Identity Cloud and up-selling additional products. We sell our products directly through our field and inside sales teams, as well as indirectly through our network of ~~ISVs~~channel partners, including resellers, system integrators and ~~channel~~other distribution partners. Our subscription fees include the use of our service and our technical support and management of our platform. We base subscription fees primarily on the products used and the number of users on our platform. We generate subscription fees pursuant to noncancelable contracts with a weighted-average duration of 2.4 years as of January 31, 2018. Our customers use our platform to manage and secure their extended enterprise (employees, contractors and partners), which we previously referred to as the internal use case. Organizations also use our platform to manage and secure their customers' identities via the powerful APIs we have developed, which we previously referred to as the external use case. We typically invoice customers in advance in annual installments for subscriptions to our platform.

Impact of Coronavirus (COVID-19) Pandemic

In December 2019, a novel coronavirus (COVID-19) was reported in China, in January 2020, the World Health Organization (WHO) declared it a Public Health Emergency of International Concern and in March 2020, the WHO declared it a pandemic. This contagious disease outbreak has continued to spread across the globe and is impacting worldwide economic activity and financial markets. The extent of the impact of COVID-19 on our future operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, related public health measures, and their impact on the macroeconomy, our current and prospective customers, employees and vendors. None of these impacts can be predicted with certainty.

Our revenue is relatively predictable as a result of our subscription-based business model, which constituted over 95% of total revenue for the year ended January 31, 2021. Future growth may be impacted by longer sales cycles, which we have experienced, which in turn, could result in delays in deals closing, creating near-term headwinds for cash flow, remaining performance obligations (RPO) and billings growth as well as potential future

impacts on revenue growth and other key metrics on a trailing basis. Our allowance for doubtful accounts and sales reserves have increased primarily due to an increase in overall uncertainty in our forecasts of future economic conditions and concession requests. While we see risks associated with more highly impacted companies and industries, we are also seeing new interest from other organizations, driven by rapidly changing work and business environments. As workforces have transitioned to working from home in a distributed model, Zero Trust has become an increasingly important security model and identity an increasingly critical service.

We believe we will be able to continue to deliver our cloud-based platform and support to our customers, without compromising our employees’ safety. Since March 2020, we have put in place mandatory work-from-home procedures for our global office locations, and our employees have the necessary tools and technology to remain connected and productive. In addition, we shifted our annual user conference, Oktane20 Live, to a virtual-only experience, resulting in cost savings, and in the near-term, we have changed our customer, employee and industry events, including Oktane21 Live, to virtual-only format. We have further benefited from cost savings, driven by reduced growth in employee compensation costs due to slower hiring, reductions in employee-related expenses as our sales and marketing activities shift primarily to an online-only sales format and a shift to work-from-home procedures.

See Risk Factors for further discussion of the potential impact of COVID-19 and its related public health measures on our business.

Proposed Acquisition of Auth0

On March 3, 2021, we entered into a definitive agreement to acquire Auth0, Inc. (Auth0) pursuant to an Agreement and Plan of Merger (the Merger Agreement). Upon consummation of the transaction contemplated by the Merger Agreement, all outstanding shares of Auth0 capital stock, options, warrants, convertible securities, phantom equity and other outstanding equity interests will be cancelled in exchange for aggregate consideration of $6.5 billion in the form of shares of Class A common stock of the Company and assumed awards of corresponding Company equity interests, subject to customary purchase price adjustments and certain customary cash payouts in lieu of shares of Company Class A common stock, as provided by the Merger Agreement. The purchase price payable in shares of Class A common stock will be valued at $276.2147 per share (which price was calculated based on the daily volume-weighted average sales price per share of Company Class A common stock for the 20 trading days ending on February 26, 2021). The per share price of these shares has been fixed as of the Merger Agreement signing date, and the aggregate value of these shares will fluctuate based on changes in our share price between the signing and closing dates.

The proposed transaction is expected to close during the Company’s second quarter of fiscal 2022, the quarter ending July 31, 2021. The closing of this transaction is subject to certain customary closing conditions and approvals. If consummated, the acquisition of Auth0 may have a significant impact on our liquidity, financial condition and results of operations. The following discussion and analysis of our results of operations and our liquidity and capital resources focuses on our existing operations exclusive of the impact of the proposed acquisition of Auth0. Any forward-looking statements contained herein do not take into account the impact of the proposed acquisition.

Financial Information and Segments

We operate our business as one reportable segment. Our revenue has grown significantly. For the years ended January 31, ~~2018, 2017~~2021, 2020 and ~~2016,~~2019, our revenue was ~~$260.0~~$835.4 million, ~~$160.3~~$586.1 million and ~~$85.9~~$399.3 million, respectively, representing a growth rate of ~~62%~~43% and ~~87%~~47%, respectively. For the years ended January 31, ~~2018, 2017~~2021, 2020 and ~~2016,~~2019, we generated net losses of ~~$114.4~~$266.3 million, ~~$83.5~~$208.9 million and ~~$76.3~~$125.5 million, respectively. Our accumulated deficit as of January 31, ~~2018~~2021 was ~~$402.5~~$967.5 million.

Key Business Metrics

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


	As of January 31,
	2021			2020			2019
	(dollars in thousands)
Customers with annual contract value (ACV) above $100,000	1,950			1,467			1,038
Dollar-based net retention rate for the trailing 12 months ended	121		%	119		%	120		%
Current remaining performance obligations	$	841,797		$	592,309		$	385,600
Remaining performance obligations	$	1,796,949		$	1,209,659		$	728,900

As of January 31,
2018 2017 2016
Customers with annual contract value (ACV) above $100,000 691
443
255
Dollar-based retention rate for the trailing 12 months ended 121 % 123 % 120 %


	Year Ended January 31,
	2021		2020		2019
	(in thousands)
Calculated billings	$	975,994	$	703,558	$	488,217

Year Ended January 31,
2018 2017 2016
(dollars in thousands)
Calculated billings $ 314,934
$ 194,524
$ 118,023

Total Customers and Number of Customers with Annual Contract Value Above $100,000

As of January 31, ~~2018,~~2021, we had over ~~4,350~~10,000 customers on our platform. We believe that our ability to increase the number of customers on our platform is an indicator of our market penetration, the growth of our business, and our potential future business opportunities. Increasing awareness of our platform and capabilities, coupled with the mainstream adoption of cloud technology, has expanded the diversity of our customer base to include organizations of all sizes across all industries. Over time, larger customers have constituted a greater share of our total revenue, which has contributed to an increase in average revenue per customer. The number of customers who have greater than $100,000 in ~~annual contract value~~ACV with us was ~~691, 443~~1,950, 1,467 and ~~255~~1,038 as of January 31, ~~2018,~~ ~~2017~~2021, 2020 and ~~2016~~,2019, respectively. We expect this trend to continue as larger enterprises recognize the value of our platform and replace their legacy ~~IAM~~identity access management infrastructure. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract with us or one of our partners to access our platform.

Dollar-Based Net Retention Rate

Our ability to generate revenue is dependent upon our ability to maintain our relationships with our customers and to increase their utilization of our platform. We believe we can achieve these goals by focusing on delivering value and functionality that enables us to both retain our existing customers and expand the number of users and products used within an existing customer. We assess our performance in this area by measuring our Dollar-Based Net Retention Rate. Our Dollar-Based Net Retention Rate measures our ability to increase revenue across our existing customer base through expansion of users and products associated with a customer as offset by churn and contraction in the number of users and/or products associated with a customer.

Our Dollar-Based Net Retention Rate is based upon our ~~Annual Contract Value, or~~ ACV which is calculated based on the terms of that customer’s contract and represents the total contracted annual subscription amount as of that period end. We calculate our Dollar-Based Net Retention Rate as of a period end by starting with the ACV from all customers as of twelve months prior to such period end ~~or Prior~~(Prior Period ~~ACV.~~ACV). We then calculate the ACV from these same customers as of the current period end ~~or Current~~(Current Period ~~ACV.~~ACV). Current Period ACV includes any upsells and is net of contraction or churn over the trailing twelve months but excludes ~~revenue~~ACV from new customers in the current period. We then divide the ~~total~~ Current Period ACV by the ~~total~~ Prior Period ACV to arrive at our Dollar-Based Net Retention Rate.

Our strong Dollar-Based Net Retention Rate ~~has consistently exceeded 120%, which~~ is primarily attributable to an expansion of users and ~~up-selling~~upselling additional products within our existing customers. Larger enterprises often implement a limited initial deployment of our platform before increasing their deployment on a broader scale.

Remaining Performance Obligations

Remaining performance obligations (RPO) represent all future, non-cancellable, contracted revenue under our subscription contracts with customers that has not yet been recognized, inclusive of deferred revenue that has

been invoiced and non-cancellable amounts that will be invoiced and recognized as revenue in future periods. Current RPO represents the portion of RPO expected to be recognized during the next 12 months. RPO fluctuates due to a number of factors, including the timing, duration and dollar amount of customer contracts.

Calculated Billings

Calculated Billings represent our total revenue plus the change in deferred revenue and less the change in unbilled receivables in the period. Calculated Billings in any particular period ~~reflects~~reflect sales to new customers plus subscription renewals and upsells to existing

customers, and represent amounts invoiced for subscription, support and professional services. We typically invoice customers in advance in annual installments for subscriptions to our platform.

Calculated Billings increased ~~62%~~39% in the year ended January 31, ~~2018~~2021 over the year ended January 31, ~~2017.~~2020. As our Calculated Billings continue to grow in absolute terms, we expect our Calculated Billings growth rate to trend down over time. See the section titled ~~“Selected Consolidated Financial Data and Other Data—Non-GAAP~~“Non-GAAP Financial Measures” for additional information and a reconciliation of Calculated Billings to total revenue.

Components of Results of Operations

Revenue

Subscription Revenue. Subscription revenue primarily consists of fees for access to and usage of our cloud-based platform and related support. ~~We generate subscription fees pursuant to noncancelable contracts with a weighted average duration of 2.4 years as of January 31, 2018.~~ Subscription revenue is driven primarily by the number of customers, the number of users per customer and the products used. We typically invoice customers in advance in annual installments for subscriptions to our platform. We recognize subscription revenue ratably over the term of the subscription period beginning on the date access to our platform is provided, provided all other revenue recognition criteria have been met.

Professional Services and Other. Professional services revenue includes fees from assisting customers in implementing and optimizing the use of our products. These services include application configuration, system integration and training services.

We generally invoice customers ~~monthly~~ as the work is performed for ~~time~~time-and-materials arrangements, and ~~materials~~up front for fixed fee arrangements. ~~We generally have standalone value for our~~All professional services ~~and recognize~~ revenue ~~for~~is recognized as the ~~estimated fair value as a separate unit of accounting as~~ services are ~~performed or for those fixed-fee contracts, upon completion of the services.~~performed.

Overhead Allocation and Employee Compensation Costs

We allocate shared costs, such as facilities costs (including rent, utilities and depreciation on ~~equipment~~assets shared by all departments), certain information technology costs, and recruiting costs to all departments based on headcount. As such, allocated shared costs are reflected in each cost of revenue and operating expense category. Employee compensation costs include salaries, bonuses, benefits and stock-based compensation for each cost of revenue and operating expense category, ~~and~~ sales commissions for sales and ~~marketing.~~marketing and any compensation related taxes.

Cost of Revenue and Gross Margin

Cost of Subscription. Cost of subscription primarily consists of expenses related to hosting our services and providing support. These expenses include employee-related costs associated with our cloud-based infrastructure and our customer support organization, third-party hosting fees, software and maintenance costs, outside services associated with the delivery of our subscription services, travel-related costs, amortization expense associated with capitalized internal-use software and acquired technology, and allocated overhead.

We intend to continue to invest additional resources in our platform infrastructure and our platform support organizations. As we continue to invest in technology innovation, we ~~expect to have increased~~anticipate that capitalized internal-use software costs and related ~~amortization.~~amortization may increase. We expect our investment in technology to expand the capability of our platform, enabling us to improve our gross margin over time. The level and timing of investment in these areas could affect our cost of subscription revenue in the future.

Cost of Professional Services and Other. Cost of professional services consists primarily of employee-related costs for our professional services delivery team, travel-related costs, and costs of outside services associated with supplementing our professional services delivery team. The cost of providing professional services has historically been higher than the associated revenue we generate.

Gross Margin. Gross margin is gross profit expressed as a percentage of total revenue. Our gross margin may fluctuate from period to period ~~as our revenue fluctuates, and~~ as a result of the timing and amount of investments to expand our hosting capacity, our continued efforts to build platform support and professional services teams, increased stock-based compensation expenses, as well as the amortization of costs associated with capitalized internal-use software and acquired intangible assets.

Operating Expenses

Research and Development. Research and development expenses consist primarily of employee compensation costs and ~~overhead allocation.~~allocated overhead. We believe that continued investment in our platform is important for our growth. We expect our research and development expenses will increase in absolute dollars as our business grows.

Sales and Marketing. Sales and marketing expenses consist primarily of employee compensation costs, costs of general marketing ~~activities~~ and promotional activities, travel-related expenses and allocated overhead. Commissions earned by our sales force that are ~~direct and~~considered incremental and ~~can be associated specifically~~recoverable costs of obtaining a contract with a ~~noncancelable subscription contract~~customer are deferred and then amortized on a straight-line basis over ~~the same~~a period of benefit that ~~revenue is recognized for the related noncancelable contract.~~we have determined to be generally five years. We expect our sales and marketing expenses will increase in absolute dollars and continue to be our largest operating expense category for the foreseeable future as we expand our sales and marketing efforts. However, we expect our sales and marketing expenses to decrease as a percentage of our total revenue as our total revenue grows.

General and Administrative. General and administrative expenses consist primarily of employee compensation costs for finance, accounting, legal, information technology and human resources personnel. In addition, general and administrative expenses include non-personnel costs, such as legal, accounting and other professional fees, charitable contributions, and all other supporting corporate expenses, such as information technology, not allocated to other departments.

We expect to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations and professional services. We expect our general and administrative expenses will increase in absolute dollars as our business grows.

Interest and Other, ~~Income (Expense),~~ Net

~~Other income (expense),~~Interest and other, net consists of interest expense, which primarily includes amortization of debt discount and issuance costs and contractual interest expense for our 2023 Notes, convertible notes due in 2025 (2025 Notes) and convertible notes due in 2026 (2026 Notes, together with the 2023 Notes and 2025 Notes, the Notes), interest income from our investment holdings ~~interest expense~~ and ~~expenses resulting from the revaluation~~loss on early extinguishment and conversion of ~~our redeemable convertible preferred stock warrant liability.~~debt.

Provision for (Benefit from) Income Taxes

~~Provision~~Our provision for (benefit from) income taxes consists of federal and state income taxes in the United States and income taxes in certain foreign jurisdictions. The primary difference between our effective tax rate and the federal statutory rate relates to the net operating losses in jurisdictions with a valuation allowance against related deferred tax assets.

Results of Operations

The following table sets forth our results of operations for the periods presented in ~~dollars and as a percentage of our revenue:~~dollars:


	Year Ended January 31,
	2021		2020		2019
	(in thousands)
Revenue
Subscription	$	796,613	$	552,688	$	370,855
Professional services and other	38,811		33,379		28,399
Total revenue	835,424		586,067		399,254
Cost of revenue
Subscription(1)	170,095		116,445		77,354
Professional services and other(1)	47,586		42,937		36,067
Total cost of revenue	217,681		159,382		113,421
Gross profit	617,743		426,685		285,833
Operating expenses
Research and development(1)	222,826		159,269		102,385
Sales and marketing(1)	427,350		340,356		227,960
General and administrative(1)	171,726		112,892		75,110
Total operating expenses	821,902		612,517		405,455
Operating loss	(204,159)		(185,832)		(119,622)
Interest expense	(72,660)		(27,017)		(15,072)
Interest income and other, net	12,891		17,089		9,180
Loss on early extinguishment and conversion of debt	(2,263)		(14,572)		—
Interest and other, net	(62,032)		(24,500)		(5,892)
Loss before provision for (benefit from) income taxes	(266,191)		(210,332)		(125,514)
Provision for (benefit from) income taxes	141		(1,419)		(17)
Net loss	$	(266,332)	$	(208,913)	$	(125,497)

⁽¹⁾Includes stock-based compensation expense as follows:


	Year Ended January 31,
	2021		2020		2019
	(in thousands)
Cost of subscription revenue	$	21,895	$	12,923	$	7,837
Cost of professional services and other revenue	8,083		7,164		4,983
Research and development	63,270		37,683		22,642
Sales and marketing	53,802		38,077		22,916
General and administrative	49,131		30,777		17,942
Total stock-based compensation expense	$	196,181	$	126,624	$	76,320

The following table sets forth our results of operations for the periods presented as a percentage of our total revenue:


	Year Ended January 31,
	2021		2020		2019
Revenue
Subscription	95	%	94	%	93	%
Professional services and other	5		6		7
Total revenue	100		100		100
Cost of revenue
Subscription	20		20		19
Professional services and other	6		7		9
Total cost of revenue	26		27		28
Gross profit	74		73		72
Operating expenses:
Research and development	27		27		26
Sales and marketing	51		58		57
General and administrative	20		20		19
Total operating expenses	98		105		102
Operating loss	(24)		(32)		(30)
Interest expense	(9)		(5)		(3)
Interest income and other, net	1		3		2
Loss on early extinguishment and conversion of debt	—		(2)		—
Interest and other, net	(8)		(4)		(1)
Loss before provision for (benefit from) income taxes	(32)		(36)		(31)
Provision for (benefit from) income taxes	—		—		—
Net loss	(32)	%	(36)	%	(31)	%

Year Ended January 31,
2018 2017 2016
Revenue
Subscription 92 % 89 % 89 %
Professional services and other 8
11
11
Total revenue 100
100

100
Cost of revenue
Subscription 20
21
24
Professional services and other 11
14
18
Total cost of revenue 31
35
42
Gross profit 69
65
58
Operating expenses:
Research and development 27
24
34
Sales and marketing 67
74
91
General and administrative 20
19
22
Total operating expenses 114
117
147
Operating loss (45 ) (52 ) (89 )
Other income (expense), net 1
—
—
Loss before provision for (benefit from) income taxes (44 ) (52 ) (89 )
Provision for (benefit from) income taxes —
—
—
Net loss (44 )% (52 )% (89 )%

A discussion regarding our financial condition and results of operations for the year ended January 31, 2021 compared to the year ended January 31, 2020 is presented below. A discussion regarding our financial condition and results of operations for the year ended January 31, 2020 compared to the year ended January 31, 2019 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the SEC on March 6, 2020, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.okta.com.

Comparison of the Years Ended January 31, ~~2018~~2021 and ~~2017~~2020

Revenue


	Year Ended January 31,
	2018			2017			$ Change		% Change			Year Ended January 31,
												2021			2020			$ Change		% Change
	(dollars in thousands)											(dollars in thousands)
Revenue:											Revenue:
Subscription	$	239,177		$	143,136		$	96,041	67	%	Subscription	$	796,613		$	552,688		$	243,925	44	%
Professional services and other	20,813			17,190			3,623		21		Professional services and other	38,811			33,379			5,432		16
Total revenue	$	259,990		$	160,326		$	99,664	62		Total revenue	$	835,424		$	586,067		$	249,357	43	%
Percentage of revenue:											Percentage of revenue:
Subscription	92		%	89		%					Subscription	95		%	94		%
Professional services and other	8			11							Professional services and other	5			6
Total	100		%	100		%					Total	100		%	100		%

Subscription revenue increased by ~~$96.0~~$243.9 million, or ~~67%~~44%, for the year ended January 31, ~~2018~~2021 compared to the year ended January 31, ~~2017.~~2020. The increase was primarily due to the addition of new customers as well as an increase in users and sales of additional products to existing customers.

Professional services and other revenue increased by ~~$3.6~~$5.4 million, or ~~21%~~16%, for the year ended January 31, ~~2018~~2021 compared to the year ended January 31, ~~2017.~~2020. The increase in professional services revenue was primarily related to an increase in implementation ~~services priced on a time~~ and ~~materials basis,~~other services associated with an increase in the number of new customers purchasing our subscription services.

Cost of Revenue, Gross Profit and Gross Margin


	Year Ended January 31,
	2018			2017			$ Change		% Change			Year Ended January 31,
												2021			2020			$ Change		% Change
	(dollars in thousands)											(dollars in thousands)
Cost of revenue:											Cost of revenue:
Subscription	$	52,481		$	34,211		$	18,270	53	%	Subscription	$	170,095		$	116,445		$	53,650	46	%
Professional services and other	28,274			21,738			6,536		30		Professional services and other	47,586			42,937			4,649		11
Total cost of revenue	$	80,755		$	55,949		$	24,806	44		Total cost of revenue	$	217,681		$	159,382		$	58,299	37	%
Gross profit	$	179,235		$	104,377		$	74,858	72		Gross profit	$	617,743		$	426,685		$	191,058	45	%
Gross margin:											Gross margin:
Subscription	78		%	76		%					Subscription	79		%	79		%
Professional services and other	(36		)	(26		)					Professional services and other	(23)			(29)
Total gross margin	69			65							Total gross margin	74		%	73		%



				Page
Part I
Item 1.		Business		46
Item 1A.		Risk Factors		15
~~Item 1A.~~		~~Risk Factors~~	12
Item 1B.	Unresolved Staff Comments		4050
Item 2.		Properties		4050
Item 3.		Legal Proceedings		4050
Item 4.		Mine Safety Disclosures		4050
Part II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		4151
Item 6.		~~Selected Consolidated Financial Data~~Removed and ~~Other Data~~ Reserved		44
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		4654
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		6673
Item 8.		Financial Statements and Supplementary Data		6875
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		~~103~~115
Item 9A.		Controls and Procedures		~~103~~115
Item 9B.		Other Information		~~103~~115
Part III
Item 10.		Directors, Executive Officers and Corporate Governance		~~104~~116
Item 11.		Executive Compensation		~~104~~116
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		~~104~~116
Item 13.		Certain Relationships and Related Transactions, and Director Independence		~~104~~116
Item 14.		Principal Accountant Fees and Services		~~104~~116
Part IV
Item 15.		Exhibits, Financial Statement Schedules		~~104~~116
Item 16.		Form 10-K Summary		~~104~~116



	Three Months Ended
	Apr 30, 2016			Jul 31, 2016			Oct 31, 2016			Jan 31, 2017			Apr 30, 2017			Jul 31, 2017			Oct 31, 2017			Jan 31, 2018
	(in thousands)
Revenue
Subscription	$	27,563		$	33,439		$	38,123		$	44,011		$	48,357		$	56,080		$	62,705		$	72,035
Professional services and other	4,224			3,997			4,160			4,809			4,650			4,915			5,533			5,715
Total revenue	31,787			37,436			42,283			48,820			53,007			60,995			68,238			77,750
Cost of revenue
Subscription⁽¹⁾	7,460			8,466			8,597			9,688			11,157			12,691			13,553			15,080
Professional services and other⁽¹⁾	4,919			5,314			5,506			5,999			6,306			6,991			7,570			7,407
Total cost of revenue	12,379			13,780			14,103			15,687			17,463			19,682			21,123			22,487
Gross profit	19,408			23,656			28,180			33,133			35,544			41,313			47,115			55,263
Operating expenses
Research and development⁽¹⁾	8,766			9,655			9,706			10,532			15,359			16,923			19,190			19,349
Sales and marketing⁽¹⁾	26,401			28,421			32,442			31,478			37,180			39,597			49,606			46,590
General and administrative⁽¹⁾	6,945			6,142			7,922			9,090			11,639			11,948			13,546			14,670
Total operating expenses	42,112			44,218			50,070			51,100			64,178			68,468			82,342			80,609
Operating loss	(22,704		)	(20,562		)	(21,890		)	(17,967		)	(28,634		)	(27,155		)	(35,227		)	(25,346		)
Other income (expense), net	32			56			50			(99		)	(19		)	382			509			810
Loss before provision for (benefit from) income taxes	(22,672		)	(20,506		)	(21,840		)	(18,066		)	(28,653		)	(26,773		)	(34,718		)	(24,536		)
Provision for (benefit from) income taxes	81			95			91			158			248			229			(940		)	142
Net loss	$	(22,753	)	$	(20,601	)	$	(21,931	)	$	(18,224	)	$	(28,901	)	$	(27,002	)	$	(33,778	)	$	(24,678	)



	Three Months Ended
	Apr 30, 2016		Jul 31, 2016		Oct 31, 2016		Jan 31, 2017		Apr 30, 2017		Jul 31, 2017		Oct 31, 2017		Jan 31, 2018
	(in thousands)
Cost of subscription revenue	$	393	$	446	$	578	$	562	$	686	$	1,056	$	1,421	$	1,437
Cost of professional services and other revenue	273		313		304		393		469		738		979		951
Research and development	618		736		808		830		3,301		4,438		5,174		5,194
Sales and marketing	1,354		1,412		1,619		1,644		2,375		3,021		3,894		3,952
General and administrative	731		757		1,527		1,829		2,075		2,725		2,940		3,034
Total stock-based compensation expense	$	3,369	$	3,664	$	4,836	$	5,258	$	8,906	$	11,978	$	14,408	$	14,568


	Year Ended January 31,
	2021			2020(1)			2019(1)
	(dollars in thousands)
Net loss	$	(266,332)		$	(208,913)		$	(125,497)
Add:
Stock-based compensation expense	196,181			126,624			76,320
Non-cash charitable contributions	9,292			1,746			1,008
Amortization of acquired intangibles	6,373			5,488			832
Acquisition-related expenses(2)	—			3,449			—
Amortization of debt discount and debt issuance costs(3)	68,424			25,892			14,387
Loss on early extinguishment and conversion of debt(4)	2,263			14,572			—
Non-GAAP net income (loss)	$	16,201		$	(31,142)		$	(32,950)
Net margin	(32)		%	(36)		%	(31)		%
Non-GAAP net margin	2		%	(5)		%	(8)		%


	Year Ended January 31,
	2021		2020(1)		2019(1)
	(dollars in thousands)
Net loss	$	(266,332)	$	(208,913)	$	(125,497)
Add:
Stock-based compensation expense	196,181		126,624		76,320
Non-cash charitable contributions	9,292		1,746		1,008
Amortization of acquired intangibles	6,373		5,488		832
Acquisition-related expenses(2)	—		3,449		—
Amortization of debt discount and debt issuance costs(3)	68,424		25,892		14,387
Loss on early extinguishment and conversion of debt(4)	2,263		14,572		—
Non-GAAP net income (loss)	$	16,201	$	(31,142)	$	(32,950)

Weighted-average shares used to compute net loss per share, basic and diluted	127,212		117,221		107,504
Non-GAAP weighted-average effect of potentially dilutive securities	15,171		—		—
Non-GAAP weighted-average shares used to compute non-GAAP net income (loss) per share, diluted	142,383		117,221		107,504

Net loss per share, basic and diluted	$	(2.09)	$	(1.78)	$	(1.17)
Non-GAAP net income (loss) per share, basic(5)	$	0.13	$	(0.27)	$	(0.31)
Non-GAAP net income (loss) per share, diluted(5)	$	0.11	$	(0.27)	$	(0.31)



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



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


•	~~Authentication providers, such as Computer Associates, Microsoft, IBM, Oracle and SailPoint;~~



	Low		High
Fiscal year ending January 31, 2018
First Quarter (from April 7, 2017)	$	22.60	$	26.90
Second Quarter	21.66		28.25
Third Quarter	21.52		33.64
Fourth Quarter	24.93		31.80



Company/Index	Base period 4/7/2017		4/30/2017		7/31/2017		10/31/2017		1/31/2018
Okta	$	100.00	$	110.80	$	93.36	$	123.01	$	125.27
S&P 500 Index	100.00		101.22		104.87		109.33		119.88
S&P 500 Information Technology Index	100.00		103.04		108.82		121.68		132.07



	Year Ended January 31,
	2017			2016			$ Change		% Change

	(dollars in thousands)
Revenue:
Subscription	$	143,136		$	76,443		$	66,693	87	%
Professional services and other	17,190			9,464			7,726		82
Total revenue	$	160,326		$	85,907		$	74,419	87
Percentage of revenue:
Subscription	89		%	89		%
Professional services and other	11			11
Total	100		%	100		%



	Payments Due by Period
	Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years		Total
	(in thousands)
Operating lease obligations	$	14,105	$	42,962	$	53,008	$	144,386	$	254,461
Other obligations	13,048		17,424		—		—		30,472
Total contractual obligations	$	27,153	$	60,386	$	53,008	$	144,386	$	284,933



	Page
~~Report~~Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm		6976
Consolidated Balance Sheets		7080
Consolidated Statements of Operations		7181
Consolidated Statements of Comprehensive Loss		7282
Consolidated Statements of ~~Redeemable Convertible Preferred Stock and~~ Stockholders’ Equity (Deficit)		7383
Consolidated Statements of Cash Flows		7585
Notes to Consolidated Financial Statements		7787


						Revenue recognition - Identifying and evaluating terms and conditions in contracts


Description of the Matter						As explained in Note 2 to the consolidated financial statements, the Company derives revenue from subscription fees and professional services fees. The Company’s arrangements are generally non-cancellable and non-refundable. In addition, the arrangements do not provide customers with the right to take possession of the software and, as a result, are accounted for as service arrangements. Subscription revenue, which includes support, is recognized on a straight-line basis over the non-cancellable contractual term of the arrangement, generally beginning on the date that the Company’s service is made available to the customer. Revenue for the Company’s professional services is recognized as services are performed in proportion to their pattern of transfer. Auditing the Company’s accounting for revenue recognition was challenging, specifically related to the appropriate identification and evaluation of non-standard terms and conditions. For example, certain non-standard terms and conditions required judgment to identify the distinct performance obligations and determine the timing of revenue recognition.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls over the identification and evaluation of terms and conditions in contracts that impact revenue recognition, including the identification of performance obligations and the determination of the timing of revenue recognition. This included testing relevant controls over the information systems that are used in the initiation, billing and recording of revenue transactions. Among other procedures, on a sample basis, we tested the completeness and accuracy of management’s identification and evaluation of the non-standard terms and conditions in contracts. We also tested amounts recognized pursuant to contractual terms and conditions by examining the relationship between revenue recognized and accounts receivable and related cash collections. Further, we selected a sample of contractual arrangements to test that management had properly assessed the impact of any non-standard terms on the identified performance obligations and timing of revenue recognition. Additionally, to verify completeness of non-standard terms and conditions, we obtained confirmations of terms and conditions for a sample of arrangements with customers.
						Convertible Notes


Description of the Matter						As explained in Note 9 to the consolidated financial statements, in June 2020 the Company issued $1.15 billion of convertible senior notes due June 15, 2026 (2026 Notes), which permit the Company to settle in cash or stock at its option. Concurrent with the offering of the 2026 Notes, the Company entered into separate capped call transactions to reduce potential dilution upon conversion of the 2026 Notes. Simultaneous with the issuance of the 2026 Notes, the Company repurchased a portion of the convertible notes issued in February 2018, due February 15, 2023 (2023 Notes) (Second Partial Repurchase of 2023 Notes), and accounted for this transaction as a debt extinguishment. These transactions are collectively referred to as the Convertible Notes Transactions. Auditing the Company’s accounting for the Convertible Notes Transactions was complex due to the significant judgment required in determining the liability component of the related convertible notes as well as the balance sheet classification of the elements of the 2026 Notes. The Company accounted for the Convertible Notes Transactions as separate liability and equity components, determined the fair value of the respective liability components based on an estimate of the fair value of a similar liability without a conversion option and assigned the residual value to the equity component. The Company estimated the fair value of the liability component of the 2026 Notes, 2025 Notes and 2023 Notes using a discounted cash flow model with a risk adjusted yield for similar debt instruments, absent any embedded conversion feature. In estimating the risk adjusted yield, the Company used both an income and market approach. For the income approach, the Company used a convertible bond pricing model, which included several assumptions including volatility, risk-free rate, and observable trading activity for the Company’s existing Notes. For the market approach, the Company performed an evaluation of issuances of convertible debt securities by other comparable companies. Additionally, a detailed analysis of the terms of the 2026 Notes was required to determine existence of any derivatives that may require separate mark-to-market accounting under applicable accounting guidance.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s Convertible Notes Transactions. For example, we tested the Company’s controls over the initial recognition and measurement of the Convertible Notes Transactions, including the recording of the associated liability and equity components. Our testing of the Company’s initial accounting for the Convertible Notes Transactions, among other procedures, included reading the underlying agreements and evaluating the Company’s accounting analysis of the initial accounting of the Convertible Notes Transactions, including the determination of the balance sheet classification of each transaction, identification of any derivatives included in the arrangements, and determination that the Second Partial Repurchase of 2023 Notes was a debt extinguishment. Our testing of the fair value of the liability components of the 2026 Notes and the Second Partial Repurchase of 2023 Notes, included, among other procedures, evaluating the Company's selection of the valuation methodology and significant assumptions and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. Specifically, when assessing the key assumptions, we focused on the Company’s assumptions used to determine the risk adjusted yield as well as its analysis of comparable issuances of debt securities by other companies. In addition, we involved a valuation specialist to assist in our evaluation of the significant assumptions and methodology used by the Company.


	Class A Common Stock		Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
		Shares	Amount		Shares									Amount
























Balances as of January 31, 2018		70,609,898	$	7	33,361,106	$	3	$	565,653	$	391	$	(366,714)		$	199,340

Issuance of common stock upon exercise of stock options and other activity, net		6,465,957	1		104,084	—		37,610		—		—			37,611
Issuance of common stock under employee stock purchase plan		615,210	—		—	—		13,727		—		—			13,727
Issuance of common stock for settlement of RSUs		976,248	—		—	—		—		—		—			—
Issuance of common stock pursuant to charitable donation		20,000	—		—	—		1,008		—		—			1,008


Conversion of Class B common stock to Class A common stock		22,406,009	2		(22,406,009)	(2)		—		—		—			0
Equity component of convertible senior notes, net of issuance costs		—	—		—	—		77,631		—		—			77,631
Issuance of warrants related to convertible senior notes		—	—		—	—		52,440		—		—			52,440
Purchases of hedges related to convertible senior notes		—	—		—	—		(80,040)		—		—			(80,040)
Stock-based compensation		—	—		—	—		76,867		—		—			76,867
Other comprehensive loss		—	—		—	—		—		(710)		—			(710)
Net loss		—	—		—	—		—		—		(125,497)			(125,497)
Balances as of January 31, 2019		101,093,322	10		11,059,181	1		744,896		(319)		(492,211)			252,377
Issuance of common stock upon exercise of stock options and other activity, net		5,323,410	1		100,007	—		45,731		—		—			45,732
Issuance of common stock under employee stock purchase plan		322,795	—		—	—		18,767		—		—			18,767
Issuance of common stock for settlement of RSUs		1,716,222	—		—	—		—		—		—			—
Issuance of common stock for bonus settlement		34,600	—		—	—		2,809		—		—			2,809
Issuance of common stock pursuant to charitable donation		15,000	—		—	—		1,746		—		—			1,746
Conversion of Class B common stock to Class A common stock		2,511,409	—		(2,511,409)	—		—		—		—			0
Equity component of convertible senior notes, net of issuance costs		—	—		—	—		217,347		—		—			217,347
Equity component of early extinguishment of convertible senior notes		2,973,311	—		—	—		(26,713)		—		—			(26,713)
Proceeds from hedges related to convertible senior notes		—	—		—	—		405,851							405,851
Payments for warrants related to convertible senior notes		—	—		—	—		(358,622)		—		—			(358,622)
Purchases of capped calls related to convertible senior notes								(74,094)							(74,094)
Stock-based compensation		—	—		—	—		127,846		—		—			127,846
Other comprehensive income		—	—		—	—		—		1,211		—			1,211
Net loss		—	—		—	—		—		—		(208,913)			(208,913)
Balances as of January 31, 2020		113,990,069	$	11	8,647,779	$	1	$	1,105,564	$	892	$	(701,124)		$	405,344



	Redeemable Convertible Preferred Stock					Class A Common Stock			Class B Common Stock				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount			Shares	Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balances as of January 31, 2015	53,223,503		$	154,530		—	$	—	18,042,388		$	2	$	10,908	$	(10	)	$	(128,098	)	$	(117,198	)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs of $1,576	6,241,936		73,424			—	—		—		—		—		—			—			—
Issuance of common stock upon exercise of stock options	—		—			—	—		1,291,099		—		1,194		—			—			1,194
Repurchases of unvested common stock	—		—			—	—		(25,846	)	—		—		—			—			—
Issuance of common stock pursuant to charitable donation	—		—			—	—		17,433		—		132		—			—			132
Vesting of early exercised stock options	—		—			—	—		—		—		1,014		—			—			1,014
Stock-based compensation	—		—			—	—		—		—		10,076		—			—			10,076
Excess tax benefits from share-based compensation	—		—			—	—		—		—		69		—			—			69
Other comprehensive loss	—		—			—	—		—		—		—		(47		)	—			(47		)
Net loss	—		—			—	—		—		—		—		—			(76,302		)	(76,302		)
Balances as of January 31, 2016	59,465,439		227,954			—	—		19,325,074		2		23,393		(57		)	(204,400		)	(181,062		)
Issuance of common stock upon exercise of stock options	—		—			—	—		980,074		—		2,001		—			—			2,001
Repurchases of unvested common stock	—		—			—	—		(25,745	)	—		—		—			—			—
Issuance of common stock pursuant to charitable donation	—		—			—	—		13,935		—		129		—			—			129
Vesting of early exercised stock options	—		—			—	—		—		—		1,297		—			—			1,297
Stock-based compensation	—		—			—	—		—		—		17,649		—			—			17,649
Other comprehensive loss	—		—			—	—		—		—		—		(110		)	—			(110		)
Net loss	—		—			—	—		—		—		—		—			(83,509		)	(83,509		)
Balances as of January 31, 2017	59,465,439		227,954			—	—		20,293,338		2		44,469		(167		)	(287,909		)	(243,605		)
Issuance of common stock upon exercise of stock options	—		—			8,277,412	1		902,830		—		33,362		—			—			33,363
Issuance of common stock upon net exercise of warrant	—		—			—	—		168,750		—		—		—			—			—
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs	—		—			12,650,000	1		—		—		194,344		—			—			194,345
Issuance of Series B redeemable convertible preferred stock upon net exercise of warrants	26,201		408			—	—		—		—		—		—			—			—
Conversion of convertible preferred stock to common stock in connection with initial public offering	(59,491,640	)	(228,362		)	—	—		59,491,640		6		228,356		—			—			228,362
Issuance of common stock and restricted stock in connection with acquisition	—		—			—	—		1,598,500		—		3,652		—			—			3,652


		Useful lives
		~~Useful lives~~
Capitalized internal-use software costs	3 years
Computers and equipment		3 years
Furniture and fixtures		7 years
Leasehold improvements		Shorter of ~~7 years~~estimated useful life or remaining lease term



	As of January 31, 2018									As of January 31, 2017
	As Reported			Adoption of ASU 2014-09			As Adjusted			As Reported			Adoption of ASU 2014-09			As Adjusted
Assets
Current assets:
Deferred commissions	$	16.5		$	1.3		$	17.8		$	13.5		$	(0.3	)	$	13.2
Prepaid expenses and other current assets	17.0			0.4			17.4			7.0			1.3			8.3
Total current assets	315.4			1.7			317.1			92.8			1.0			93.8
Deferred commissions, noncurrent	11.0			29.8			40.8			10.1			23.4			33.5
Total assets	$	367.4		$	31.5		$	398.9		$	130.6		$	24.4		$	155.0

Liabilities and stockholders’ equity (deficit)
Deferred revenue	$	162.6		$	(3.3	)	$	159.3		$	108.0		$	(3.9	)	$	104.1
Total current liabilities	190.8			(3.3		)	187.5			134.5			(3.9		)	130.6
Deferred revenue, noncurrent	6.0			(0.7		)	5.3			5.7			(1.0		)	4.7
Total liabilities	203.8			(4.0		)	199.8			146.3			(5.0		)	141.3
Accumulated deficit	(402.5		)	35.5			(367.0		)	(287.9		)	29.4			(258.5		)
Total stockholders’ equity (deficit)	$	163.6		$	35.5		$	199.1		$	(243.6	)	$	29.4		$	(214.2	)


	As of January 31, 2021
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents:
Money market funds	$	311,257	$	0	$	0	$	311,257



Total cash equivalents	311,257		0		0		311,257
Short-term investments:


U.S. treasury securities	1,888,882		1,571		(22)		1,890,431
Corporate debt securities	230,726		429		(2)		231,153
Total short-term investments	2,119,608		2,000		(24)		2,121,584
Total	$	2,430,865	$	2,000	$	(24)	$	2,432,841


	As of January 31, 2017										As of January 31, 2020
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value			Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents:										Cash equivalents:
Money market funds	$	10,565	$	—	$	—		$	10,565	Money market funds	$	416,584	$	0	$	0	$	416,584
U.S. treasury securities										U.S. treasury securities	19,996		0		0		19,996
Total cash equivalents	$	10,565	$	—	$	—		$	10,565	Total cash equivalents	436,580		0		0		436,580
Short-term investments:										Short-term investments:
Asset-backed securities	$	1,538	$	—	$	—		$	1,538

U.S. treasury securities										U.S. treasury securities	575,920		686		(8)		576,598
Corporate debt securities	12,842		13		(3		)	12,852		Corporate debt securities	305,859		519		0		306,378
Total short-term investments	14,380		13		(3		)	14,390		Total short-term investments	881,779		1,205		(8)		882,976
Total	$	24,945	$	13	$	(3	)	$	24,955	Total	$	1,318,359	$	1,205	$	(8)	$	1,319,556


	As of January 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	311,257	$	0	$	0	$	311,257



Total cash equivalents	311,257		0		0		311,257
Short-term investments:


U.S. treasury securities	0		1,890,431		0		1,890,431
Corporate debt securities	0		231,153		0		231,153
Total short-term investments	0		2,121,584		0		2,121,584
Total cash equivalents and short-term investments	$	311,257	$	2,121,584	$	0	$	2,432,841



Balance at January 31, 2016	$	237
Increase in fair value of warrant	67
Balance at January 31, 2017	304
Increase in fair value of warrant	104
Reclassification of remaining warrant liability to additional paid-in capital	(408		)
Balance at January 31, 2018	$	—


	As of January 31, 2021
	Net Carrying Amount(1)		Estimated Fair Value
2023 convertible senior notes	$	36,092	$	216,926
2025 convertible senior notes	$	885,465	$	1,605,508
2026 convertible senior notes	$	867,643	$	1,493,850




Balance as of January 31, 2017	$	2,630
Goodwill recorded in connection with Stormpath acquisition	3,652
Balance as of January 31, 2018	$	6,282


	As of January 31, 2021
	Gross		Accumulated Amortization		Write-offs		Net
Capitalized internal-use software costs	$	30,259	$	(19,478)	$	0	$	10,781
Purchased developed technology	28,800		(12,694)		0		16,106
Software licenses	126		(4)		0		122
	$	59,185	$	(32,176)	$	0	$	27,009



	Remaining Amortization
2022	$	10,354
2023	8,416
2024	7,354
2025	885


Total	$	27,009


	As of January 31, 2021
Liability component:
Principal	$	40,246
Less: unamortized debt issuance costs and debt discount	(4,591)
Net carrying amount	$	35,655

Equity component:
2023 Notes	$	9,328
Less: issuance costs	(271)
Carrying amount of the equity component(1)	$	9,057


	Year Ended
		January 31, 2021

Contractual interest expense		$	2,731
Amortization of debt issuance costs		813
Amortization of debt discount		27,954
Total		$	31,498


	Operating Leases
2022	$	34,410
2023	37,910
2024	38,823
2025	36,289
2026	26,839
Thereafter	73,135
Total lease payments	247,406
Less imputed interest	(44,279)
Total operating lease liabilities	$	203,127



	Operating Leases		Purchase Obligations		Total
2019	$	14,105	$	13,048	$	27,153
2020	18,243		13,077		31,320
2021	24,719		4,347		29,066
2022	26,521		—		26,521
2023	26,487		—		26,487
Thereafter	144,386		—		144,386
Total contractual obligations	$	254,461	$	30,472	$	284,933


	Purchase Obligations
2022	$	53,992
2023	38,370
2024	32,844
2025	1,604
2026	1,417

Total contractual obligations	$	128,227



Series	Authorized Shares	Issued and Outstanding Shares	Liquidation Preference		Carrying Value
Series A	14,210,789	14,210,783	$	11,373,000	$	11,322,000
Series B	12,015,123	11,986,055	16,500,000		16,420,000
Series C	10,708,782	10,708,780	25,000,000		24,872,000
Series D	6,833,654	6,833,651	27,500,000		27,416,000
Series E	9,484,234	9,484,234	75,000,000		74,500,000
Series F	6,242,000	6,241,936	75,000,000		73,424,000
	59,494,582	59,465,439	$	230,373,000	$	227,954,000



			As of January 31, 2021
Options and unvested RSUs outstanding			~~27,779,974~~12,702,220
Available for future stock option and RSU grants			~~9,842,925~~20,574,441
Available for ESPP			~~2,430,627~~4,633,093
			~~40,053,526~~37,909,754