Cover
Cover - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Jan. 31, 2023 | Feb. 28, 2023 | Jul. 31, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 31, 2023 | ||
Current Fiscal Year End Date | --01-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38451 | ||
Entity Registrant Name | Zuora, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-5530976 | ||
Entity Address, Address Line One | 101 Redwood Shores Parkway | ||
Entity Address, City or Town | Redwood City | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94065 | ||
City Area Code | 888 | ||
Local Phone Number | 976-9056 | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | ZUO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1 | ||
Documents Incorporated by Reference | Portions of the Registrant's definitive Proxy Statement relating to the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended January 31, 2023. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K. | ||
Entity Central Index Key | 0001423774 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 127.4 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 8.1 |
Audit Information
Audit Information | 12 Months Ended |
Jan. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Santa Clara, California |
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 203,239 | $ 113,507 |
Short-term investments | 183,006 | 101,882 |
Accounts receivable, net of allowance for credit losses of $4,001 and $3,188 as of January 31, 2023 and January 31, 2022, respectively | 91,740 | 82,263 |
Deferred commissions, current portion | 16,282 | 15,080 |
Prepaid expenses and other current assets | 24,285 | 15,603 |
Total current assets | 518,552 | 328,335 |
Property and equipment, net | 27,159 | 27,676 |
Operating lease right-of-use assets | 22,768 | 32,643 |
Purchased intangibles, net | 13,201 | 3,452 |
Deferred commissions, net of current portion | 28,250 | 26,727 |
Goodwill | 53,991 | 17,632 |
Other assets | 4,677 | 4,787 |
Total assets | 668,598 | 441,252 |
Current liabilities: | ||
Accounts payable | 1,073 | 6,785 |
Accrued expenses and other current liabilities | 103,678 | 14,225 |
Accrued employee liabilities | 30,483 | 32,425 |
Debt, current portion | 0 | 1,660 |
Deferred revenue, current portion | 167,145 | 152,740 |
Operating lease liabilities, current portion | 9,240 | 11,462 |
Total current liabilities | 311,619 | 219,297 |
Debt, net of current portion | 210,403 | 0 |
Deferred revenue, net of current portion | 442 | 771 |
Operating lease liabilities, net of current portion | 37,924 | 45,633 |
Deferred tax liabilities | 3,717 | 3,243 |
Other long-term liabilities | 7,333 | 1,701 |
Total liabilities | 571,438 | 270,645 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Additional paid-in capital | 859,482 | 734,149 |
Accumulated other comprehensive loss | (919) | (108) |
Accumulated deficit | (761,417) | (563,447) |
Total stockholders’ equity | 97,160 | 170,607 |
Total liabilities and stockholders’ equity | 668,598 | 441,252 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 13 | 12 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 1 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Allowance for credit losses | $ 4,001 | $ 3,188 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 500,000 | 500,000 |
Common stock, issued (in shares) | 127,384 | 119,008 |
Common stock, outstanding (in shares) | 127,384 | 119,008 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 500,000 | 500,000 |
Common stock, issued (in shares) | 8,121 | 9,048 |
Common stock, outstanding (in shares) | 8,121 | 9,048 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Revenue: | |||
Total revenue | $ 396,087 | $ 346,738 | $ 305,420 |
Cost of revenue: | |||
Total cost of revenue | 153,229 | 140,106 | 130,770 |
Gross profit | 242,858 | 206,632 | 174,650 |
Operating expenses: | |||
Research and development | 102,564 | 83,219 | 76,795 |
Sales and marketing | 173,871 | 143,366 | 116,914 |
General and administrative | 78,878 | 76,223 | 54,803 |
Litigation settlement | 75,000 | 0 | 0 |
Total operating expenses | 430,313 | 302,808 | 248,512 |
Loss from operations | (187,455) | (96,176) | (73,862) |
Change in fair value of warrant liability | 9,214 | 0 | 0 |
Interest expense | (15,133) | (152) | (334) |
Interest and other income (expense), net | 5,986 | (1,670) | 2,895 |
Loss before income taxes | (187,388) | (97,998) | (71,301) |
Income tax provision | 10,582 | 1,427 | 1,873 |
Net loss | (197,970) | (99,425) | (73,174) |
Comprehensive loss: | |||
Foreign currency translation adjustment | (461) | (673) | 696 |
Unrealized loss on available-for-sale securities, net of tax | (350) | (231) | (88) |
Comprehensive loss | $ (198,781) | $ (100,329) | $ (72,566) |
Net loss per share, basic (in dollars per share) | $ (1.51) | $ (0.80) | $ (0.62) |
Net loss per share, diluted (in dollars per share) | $ (1.51) | $ (0.80) | $ (0.62) |
Weighted-average shares outstanding used in calculating net loss per share, basic (in shares) | 131,441 | 124,206 | 117,598 |
Weighted-average shares outstanding used in calculating net loss per share, diluted (in shares) | 131,441 | 124,206 | 117,598 |
Subscription | |||
Revenue: | |||
Total revenue | $ 338,391 | $ 287,747 | $ 242,340 |
Cost of revenue: | |||
Total cost of revenue | 81,094 | 68,285 | 58,808 |
Professional services | |||
Revenue: | |||
Total revenue | 57,696 | 58,991 | 63,080 |
Cost of revenue: | |||
Total cost of revenue | $ 72,135 | $ 71,821 | $ 71,962 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common Stock Class A common stock | Common Stock Class B common stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Jan. 31, 2020 | 97,134,000 | 17,348,000 | ||||||
Beginning balance at Jan. 31, 2020 | $ 164,659 | $ 10 | $ 2 | $ 555,307 | $ 188 | $ (390,848) | ||
Conversion of Class B common stock to Class A common stock (in shares) | 9,176,000 | (9,176,000) | ||||||
Conversion of Class B common stock to Class A common stock | 0 | $ 1 | $ (1) | |||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 8,000 | 2,714,000 | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases | 11,784 | 11,784 | ||||||
Lapse of restrictions on common stock related to early exercise of stock options | 116 | 116 | ||||||
RSU releases (in shares) | 2,778,000 | 118,000 | ||||||
Issuance of common stock under the ESPP (in shares) | 730,000 | |||||||
Issuance of common stock under the ESPP | 7,637 | 7,637 | ||||||
Charitable donation of stock (in shares) | 74,000 | |||||||
Charitable donation of stock | 1,000 | 1,000 | ||||||
Stock-based compensation | 59,283 | 59,283 | ||||||
Other comprehensive income (loss) | 608 | 608 | ||||||
Net loss | (73,174) | (73,174) | ||||||
Ending balance (in shares) at Jan. 31, 2021 | 109,900,000 | 11,004,000 | ||||||
Ending balance at Jan. 31, 2021 | 171,913 | $ 11 | $ 1 | 635,127 | 796 | (464,022) | ||
Conversion of Class B common stock to Class A common stock (in shares) | 4,371,000 | (4,371,000) | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 509,000 | 2,389,000 | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases | 18,499 | $ 1 | 18,498 | |||||
Lapse of restrictions on common stock related to early exercise of stock options | 26 | 26 | ||||||
RSU releases (in shares) | 3,462,000 | 26,000 | ||||||
RSU releases | 1 | $ 1 | ||||||
Issuance of common stock under the ESPP (in shares) | 705,000 | |||||||
Issuance of common stock under the ESPP | $ 7,428 | 7,428 | ||||||
Charitable donation of stock (in shares) | 61,012 | 61,000 | ||||||
Charitable donation of stock | $ 1,000 | 1,000 | ||||||
Stock-based compensation | 72,070 | 72,070 | ||||||
Other comprehensive income (loss) | (904) | (904) | ||||||
Net loss | (99,425) | (99,425) | ||||||
Ending balance (in shares) at Jan. 31, 2022 | 119,008,000 | 9,048,000 | 119,008,000 | 9,048,000 | ||||
Ending balance at Jan. 31, 2022 | $ 170,607 | $ 12 | $ 1 | 734,149 | (108) | (563,447) | ||
Conversion of Class B common stock to Class A common stock (in shares) | 1,355,000 | (1,355,000) | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 477,000 | 49,000 | 428,000 | |||||
Issuance of common stock upon exercise of stock options, net of repurchases | $ 2,471 | 2,471 | ||||||
RSU releases (in shares) | 5,795,000 | |||||||
Issuance of common stock under the ESPP (in shares) | 1,076,000 | |||||||
Issuance of common stock under the ESPP | $ 7,019 | 7,019 | ||||||
Charitable donation of stock (in shares) | 101,317 | 101,000 | ||||||
Charitable donation of stock | $ 1,000 | 1,000 | ||||||
Stock-based compensation | 96,401 | 96,401 | ||||||
Issuance of warrants | 18,442 | 18,442 | ||||||
Other comprehensive income (loss) | (811) | (811) | ||||||
Net loss | (197,970) | (197,970) | ||||||
Ending balance (in shares) at Jan. 31, 2023 | 127,384,000 | 8,121,000 | 127,384,000 | 8,121,000 | ||||
Ending balance at Jan. 31, 2023 | $ 97,160 | $ 13 | $ 1 | $ 859,482 | $ (919) | $ (761,417) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Cash flows from operating activities: | |||
Net loss | $ (197,970,000) | $ (99,425,000) | $ (73,174,000) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation, amortization and accretion | 18,738,000 | 16,760,000 | 15,308,000 |
Stock-based compensation | 96,401,000 | 72,070,000 | 59,283,000 |
Provision for credit losses | 2,245,000 | 2,919,000 | 3,686,000 |
Donation of common stock to charitable foundation | 1,000,000 | 1,000,000 | 1,000,000 |
Amortization of deferred commissions | 19,291,000 | 16,330,000 | 12,401,000 |
Reduction in carrying amount of right-of-use assets | 7,363,000 | 9,717,000 | 8,265,000 |
Asset impairment | 4,537,000 | 12,783,000 | 0 |
Change in fair value of warrant liability | (9,214,000) | 0 | 0 |
Change in fair value of contingent consideration | (380,000) | 0 | 0 |
Other | (391,000) | 802,000 | 73,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (11,081,000) | (6,322,000) | (13,671,000) |
Prepaid expenses and other assets | (7,379,000) | (1,179,000) | 895,000 |
Deferred commissions | (22,802,000) | (24,127,000) | (17,842,000) |
Accounts payable | (6,084,000) | 4,457,000 | 106,000 |
Accrued expenses and other liabilities | 88,353,000 | 1,424,000 | 53,000 |
Accrued employee liabilities | (2,161,000) | 1,165,000 | 7,065,000 |
Deferred revenue | 12,020,000 | 24,281,000 | 16,812,000 |
Operating lease liabilities | (13,131,000) | (13,969,000) | (8,974,000) |
Net cash (used in) provided by operating activities | (20,644,000) | 18,686,000 | 11,286,000 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (10,634,000) | (8,776,000) | (13,144,000) |
Insurance proceeds for damaged property and equipment | 0 | 344,000 | 988,000 |
Purchase of intangible assets | 0 | (1,349,000) | 0 |
Purchases of short-term investments | (234,246,000) | (109,510,000) | (97,363,000) |
Sales of short-term investments | 0 | 0 | 2,511,000 |
Maturities of short-term investments | 154,806,000 | 99,192,000 | 119,880,000 |
Cash paid for acquisition, net of cash acquired | (41,000,000) | 0 | 0 |
Net cash (used in) provided by investing activities | (131,074,000) | (20,099,000) | 12,872,000 |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible senior notes, net of issuance costs | 233,901,000 | 0 | 0 |
Proceeds from issuance of common stock upon exercise of stock options | 2,471,000 | 18,499,000 | 11,784,000 |
Proceeds from issuance of common stock under employee stock purchase plan | 7,019,000 | 7,428,000 | 7,637,000 |
Principal payments on long-term debt | (1,480,000) | (4,444,000) | (4,440,000) |
Net cash provided by financing activities | 241,911,000 | 21,483,000 | 14,981,000 |
Effect of exchange rates on cash and cash equivalents | (461,000) | (673,000) | 696,000 |
Net increase in cash and cash equivalents | 89,732,000 | 19,397,000 | 39,835,000 |
Cash and cash equivalents, beginning of year | 113,507,000 | 94,110,000 | 54,275,000 |
Cash and cash equivalents, end of year | 203,239,000 | 113,507,000 | 94,110,000 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 7,608,000 | 94,000 | 262,000 |
Cash paid for tax | 1,445,000 | 1,395,000 | 1,159,000 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Lapse in restrictions on early exercised common stock options | 0 | 26,000 | 116,000 |
Property and equipment purchases accrued or in accounts payable | 4,000 | 164,000 | 70,000 |
Purchase of intangible assets included in accrued expenses and other current liabilities | $ 0 | $ 225,000 | $ 0 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 12 Months Ended |
Jan. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation Description of Business Zuora, Inc. was incorporated in the state of Delaware in 2006 and began operations in 2007. Zuora ’ s fiscal year ends on January 31. Zuora is headquartered in Redwood City, California. Zuora provides a cloud-based subscription management platform, built to help companies monetize new services and operate dynamic, recurring revenue business models. Our solution enables companies across multiple industries and geographies to launch, manage and scale a subscription business, automating the entire quote-to-cash and revenue recognition process, including quoting, billing, collections and revenue recognition. With Zuora’s solution, businesses can change pricing and packaging for products and services to grow and scale, efficiently comply with revenue recognition standards, analyze customer data to optimize their subscription offerings, and build meaningful relationships with their subscribers. References to "Zuora”, "us”, “our”, or “we” in these notes refer to Zuora, Inc. and its subsidiaries on a consolidated basis. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of Zuora and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Our most significant estimates and assumptions are related to revenue recognition with respect to the determination of the relative standalone selling prices for our services; the expected period of benefit over which deferred commissions are amortized; valuation of stock-based awards, our convertible senior notes and warrants; estimates of allowance for credit losses; estimates of the fair value of goodwill and long-lived assets when evaluating for impairments and for assets acquired from acquisitions; useful lives of intangibles and other long-lived assets; and the valuation of deferred income tax assets and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ materially from these estimates under different assumptions or conditions. Foreign Currency The functional currencies of our foreign subsidiaries are the respective local currencies. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss within our consolidated balance sheets. Foreign currency transaction gains and losses are included in interest and other income (expense), net in the consolidated statements of comprehensive loss and were not material for fiscal 2023, 2022 and 2021. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the average exchange rate during the period, and equity balances are translated using historical exchange rates. Segment Information We operate as one operating segment. Our chief operating decision maker is our Chief Executive Officer, who primarily reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Revenue Recognition Policy We generate revenue primarily from two sources: (1) subscription services, which is comprised of revenue from subscription fees from customers accessing our cloud-based software; and (2) professional services and other revenue. For the fiscal year ended January 31, 2023, subscription revenue was $338.4 million and professional services and other revenue was $57.7 million. Revenue is recognized upon satisfaction of performance obligations in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine the amount of revenue to be recognized through application of the following steps: ◦ Identification of the contract, or contracts with a customer; ◦ Identification of the performance obligations in the contract; ◦ Determination of the transaction price; ◦ Allocation of the transaction price to the performance obligations in the contract; and ◦ Recognition of revenue when or as we satisfy the performance obligations. Our subscription service arrangements are typically non-cancelable for a pre-specified subscription term and do not typically contain refund-type provisions. Subscription Services Subscription services revenue is primarily comprised of fees that provide customers with access to our cloud-based software during the term of the arrangement. Cloud-based services typically allow our customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract, which is the date our cloud-based software is made available to customers. We generally invoice for subscription services annually or quarterly in advance of services being performed. Subscription agreements generally have terms ranging from one Professional Services and Other Revenue Professional services revenue consists of fees for services related to helping our customers deploy, configure, and optimize the use of our solutions. These services include system integration, data migration, and process enhancement. Professional services projects generally take three Contracts with Multiple Performance Obligations We enter into contracts with our customers that often include cloud-based software subscriptions and professional services performance obligations. A performance obligation is a commitment in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require judgment. Our cloud-based software subscriptions are distinct as such services are often sold separately. In addition, our subscription services contracts can include multi-year agreements that include a fixed annual platform fee and a volume block usage fee that may vary based on permitted volume usage each year. To the extent that permitted volume usage each year is the same, we have concluded that there is one multi-year stand-ready performance obligation. To the extent that permitted volume usage each year varies, we have concluded that each year represents a distinct stand-ready performance obligations and we allocate the transaction price to the performance obligations on a relative standalone-selling price basis and revenue is recognized ratably over each year. We consider the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the cloud-based software, start date and the contractual dependence of the cloud-based software on the customer’s satisfaction with the professional services work. To date, we have concluded that all of the professional services included in contracts with multiple performance obligations are distinct. We allocate the transaction price to each performance obligation on a relative standalone selling price (SSP) basis. The SSP is the estimated price at which we would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. We establish SSP for both our subscription services and professional services elements primarily by considering the actual sales prices of the element when sold on a stand-alone basis or when sold together with other elements. If we are unable to rely on actual observable sales inputs, we determine SSP based on inputs such as actual sales prices when sold together with other promised subscriptions or services and other factors such as our overarching pricing objectives and strategies. Deferred Commissions We capitalize sales commission expenses and associated payroll taxes paid to internal sales personnel that are incremental to obtaining customer contracts. These costs are deferred and then amortized over the expected period of benefit, which is estimated to be five years for new customers. Commissions for existing customer renewals are deferred and amortized over twelve months. We have determined the period of benefit taking into consideration several factors including the expected subscription term and expected renewals of our customer contracts, the duration of our relationships with our customers, and the life of our technology. Amortization expense is included in Sales and marketing in the accompanying consolidated statements of comprehensive loss. Contract Assets Subscription services revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract. A contract asset results when revenue recognition occurs in advance of billing the customer. Contract assets are included in Prepaid expenses and other current assets in our consolidated balance sheets. The total value of our contract assets was $1.3 million as of January 31, 2023 and 2022. For further detail regarding our remaining performance obligations, please refer to Note 10. Deferred Revenue and Performance Obligations. Cost of Revenue Cost of subscription revenue primarily consists of costs relating to the hosting of our cloud-based software platform, including salaries and benefits of technical operations and support personnel, data communications costs, allocated overhead and property and equipment depreciation, amortization of internal-use software and purchased intangibles and the reduction in the carrying amount of ROU assets. Cost of professional services revenue primarily consists of the costs of delivering implementation services to customers of our cloud-based software platform, including salaries and benefits of professional services personnel and fees for third-party resources used in the delivery of implementation services. Advertising Expense Advertising costs are expensed as incurred. For the periods presented, advertising expense was not material. Concentrations of Credit Risk and Significant Clients and Suppliers Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. We deposit our cash and short-term investments primarily with one financial institution and, accordingly, such deposits regularly exceed federally insured limits. No single customer accounted for more than 10% of Zuora’s revenue or accounts receivable balance in any of the periods presented. Cash and Cash Equivalents We consider all highly liquid investments with original or remaining maturities of three months or less on the purchase date to be cash equivalents. Cash and cash equivalents carrying value approximate fair value and consist primarily of bank deposits and money market funds. Short-term Investments We typically invest in high quality, investment grade securities from diverse issuers. We classify our short-term investments as available-for-sale. In general, these investments are free of trading restrictions. We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive loss, which is reflected as a separate component of stockholders’ equity in our consolidated balance sheets. Gains and losses are recognized when realized in our consolidated statements of comprehensive loss. When we have determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in income. Gains and losses are determined using the specific identification method. We review our debt securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. We consider factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and our intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s amortized cost basis. If we believe that an other-than-temporary decline exists in one of these securities, we will write down these investments to fair value. The portion of the write-down related to credit loss would be recorded to Interest and other income (expense), net in our consolidated statements of comprehensive loss. Any portion not related to credit loss would be recorded to accumulated other comprehensive loss, which is reflected as a separate component of stockholders' equity in our consolidated balance sheets. We may sell our short-term investments at any time, without significant penalty, for use in current operations or for other purposes, even if they have not yet reached maturity. As a result, we have classified our investments, including any securities with maturities beyond 12 months, as current assets in the accompanying consolidated balance sheets. Accounts Receivable Our accounts receivable consists of client obligations due under normal trade terms, and are reported at the principal amount outstanding, net of the allowance for credit losses. We maintain an allowance for credit losses that is based upon historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss related to certain accounts with high collection risk. The allowance for credit losses consists of the following activity (in thousands): Fiscal Year Ended January 31, 2023 2022 Allowance for credit losses, beginning balance $ 3,188 $ 4,522 Additions: Charged to revenue 2,245 2,919 Charged to deferred revenue 1,818 1,801 Deductions: Write-offs to revenue (2,201) (3,423) Write-offs to deferred revenue (1,049) (2,631) Allowance for credit losses, ending balance $ 4,001 $ 3,188 Property and Equipment, Net Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, generally three Acquisitions We assess acquisitions under ASC Topic 805, Business Combinations (ASC 805) to determine whether a transaction represents the acquisition of assets or a business combination. Under this guidance, we apply a two-step model. The first step involves a screening test where we evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in either a single asset or a group of similar assets. If the screening test is met, we account for the set as an asset acquisition. If the screening test is not met, we apply the second step of the model to determine if the set meets the definition of a business based on the guidance in ASC 805. If the second step is met, the transaction is treated as a business combination. If the second step is not met, it is treated as an asset acquisition. A business combination is accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date. Any excess fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. The allocation of the consideration requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted average cost of capital, and the cost savings related to the business combination. These estimates are inherently uncertain and unpredictable. Contingent consideration incurred in connection with the business combination is recorded at its fair value on the acquisition date and is remeasured through credits or charges to the consolidated statements of comprehensive loss each subsequent reporting period and is classified as contingent consideration in the condensed consolidated balance sheet until the related contingencies are resolved. Goodwill, Acquired Intangible Assets, Internal-Use Software and Web Site Development Costs, and Impairment of Long-Lived Assets Goodwill. Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on December 1, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. We have the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. No impairment charges were recorded during fiscal 2023, 2022 or 2021. Acquired Intangible Assets . Acquired intangible assets consist of developed technology, customer relationships, and trade names, resulting from Zuora’s acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives on a straight-line basis. Internal-Use Software and Web Site Development Costs . We capitalize costs related to developing our suite of software solutions and our website when it is probable the expenditures will result in significant new functionality. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalized costs are recorded as part of property and equipment, net in our consolidated balance sheets. Maintenance and training costs are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years. Impairment of Long-Lived Assets . The carrying amounts of long-lived assets, including property and equipment, capitalized internal-use software, acquired intangible assets, deferred commissions, and ROU assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to future undiscounted net cash flows the asset is expected to generate over its remaining life. If the asset is determined to be impaired, the amount of any impairment recognized is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During fiscal 2023 and fiscal 2022, we recognized impairment charges totaling $4.5 million and $12.8 million, respectively, related to exiting certain excess office space that we have marketed for sublease. See Note 12. Leases for further details of these charges. There were no material impairments recognized for fiscal 2021. Income Taxes We use the asset-and-liability method of accounting for income taxes. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. In assessing the need for a valuation allowance, we have considered our historical levels of income, expectations of future taxable income and ongoing tax planning strategies. Because of the uncertainty of the realization of the deferred tax assets in the U.S., we have recorded a full valuation allowance against our deferred tax assets. Realization of our deferred tax assets is dependent primarily upon future U.S. taxable income. We recognize and measure tax benefits from uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Significant judgment is required to evaluate uncertain tax positions. Although we believe that we have adequately reserved for our uncertain tax positions, it can provide no assurance that the final tax outcome of these matters will not be materially different. We evaluate our uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. The provision for income taxes includes the effects of any accruals that we believe are appropriate, as well as the related net interest and penalties. Stock-Based Compensation We measure our employee and director stock-based compensation awards, including purchase rights issued under the ESPP, based on the award's estimated fair value on the date of grant. We estimate the fair value of stock options, and purchase rights under the ESPP, using the Black-Scholes option-pricing model. The fair value of restricted stock units (RSUs) and PSUs is equal to the fair value of our common stock on the date of grant. Expense associated with our equity awards is recognized net of estimated forfeitures in our consolidated statements of comprehensive loss using the straight-line attribution method over the requisite service period for stock options and RSUs; over the period we expect the service and performance conditions under the award will be achieved for PSUs; and over the offering period for the purchase rights issued under the ESPP. Estimated forfeitures are based upon our historical experience and we revise our estimates, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. For PSUs, we evaluate the vesting conditions on an ongoing basis and stop recognizing expense when we deem the PSU is no longer probable of vesting. If we deem the PSU to be improbable of vesting, we record an adjustment to reverse all previously recognized expense associated with the PSU in the current period. Stock options generally vest over four years and have a contractual term of ten years. ESPP purchase rights vest over the two year offering period. RSUs generally vest over three one Determining the grant date fair value of options, RSUs, and PSUs requires management to make assumptions and judgments. These estimates involve inherent uncertainties and if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded. The assumptions and estimates for valuing stock options are as follows: • Fair value per share of Company’s common stock. We use the publicly quoted price of our common stock as reported on the New York Stock Exchange as the fair value of our common stock. • Expected volatility. We determine the expected volatility based on historical average volatilities of similar publicly traded companies corresponding to the expected term of the awards. • Expected term. We determine the expected term of awards which contain only service conditions using the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award, as we do not have sufficient historical data relating to stock-option exercises. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect during the period the options were granted corresponding to the expected term of the awards. • Estimated dividend yield. The estimated dividend yield is zero, as we do not currently intend to declare dividends in the foreseeable future. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Options subject to early exercise that are exercised prior to vesting are excluded from the computation of weighted-average number of shares of common stock outstanding until such shares have vested. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period increased by giving effect to all potentially dilutive securities to the extent they are dilutive. Leases We determine if a contract is a lease or contains a lease at the inception of the contract and reassess that conclusion if the contract is modified. All leases are assessed for classification as an operating lease or a finance lease. Operating lease right-of-use (ROU) assets are presented separately in our consolidated balance sheets. Operating lease liabilities are also presented separately as current and non-current liabilities in our consolidated balance sheets. We do not have any finance lease ROU assets or liabilities. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We do not obtain and control our right to use the identified asset until the lease commencement date. Our lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. When the rate implicit in the lease is not readily determinable, we use the incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date and factors in a hypothetical interest rate on a collateralized basis with similar terms, payments and economic environments. Our ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement, minus any lease incentives received, and any direct costs incurred by the lessee. Any variable lease payments are expensed as incurred and do not factor into the measurement of the applicable ROU asset or lease liability. The term of our leases equals the non-cancellable period of the lease, including any rent-free periods provided by the lessor, and also includes options to renew or extend the lease (including by not terminating the lease) that we are reasonably certain to exercise. We establish the term of each lease at lease commencement and reassess that term in subsequent periods when one of the triggering events outlined in Topic 842 occurs. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. Our lease contracts often include lease and non-lease components. We have elected the practical expedient offered by the standard to not separate lease from non-lease components for our facilities leases and account for them as a single lease component. We have elected not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for these short-term leases is recognized on a straight-line basis over the lease term. We have one sublease, which is classified as an operating lease. We recognize sublease income on a straight-line basis over the sublease term. Sublease income is reported as a reduction in our operating lease cost and is allocated across the consolidated statements of comprehensive loss. Derivative Financial Instruments The accounting treatment of derivative financial instruments requires that we record certain embedded features and warrants as assets or liabilities at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date with any change in fair value recorded as income or expense. In connection with our issuance of the Initial Notes to Silver Lake on March 24, 2022 as described in Note 9. Debt and Note 17. Warrants to Purchase Shares of Common Stock , we adopted a sequencing policy in accordance with ASC 815-40 whereby financial instruments issued will be ordered by conversion or exercise price. Deferred Debt Issuance Costs Costs directly associated with obtaining debt financing are deferred and amortized using the effective interest rate method over the expected term of the related debt agreement. We determine the expected term of debt agreements by assessing the contractual term of the debt as well as any non-contingent put rights provided to the lenders. Unamortized amounts related to long-term debt are reflected on the consolidated balance sheets as a direct deduction from the carrying amounts of the related long-term debt liability. Amortization expense of deferred loan costs was approximately $6.6 million for the fiscal year ended January 31, 2023, and is included in Interest expense on the accompanying consolidated statements of comprehensive loss. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements). For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. Recent Accounting Pronouncements—Adopted in Fiscal 2023 In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models previously required under U.S. GAAP, including the beneficial conversion feature and cash conversion models. This ASU also simplifies the diluted earnings per share calculation in certain areas. The standard was effective for us beginning February 1, 2022 and we utilized the modified retrospective transition method of adoption. The adoption of this standard had no impact on our retained earnings or other components of equity as of the February 1, 2022 adoption date and had no impact to our earnings per share during the period of adoption. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. We retroactively adopted this standard as of February 1, 2022. The adoption of this standard on February 1, 2022 had no impact on our condensed consolidated financial statements. |
Investments
Investments | 12 Months Ended |
Jan. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Note 3. Investments The amortized costs, unrealized gains and losses and estimated fair values of our short-term investments were as follows (in thousands): January 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 34,865 $ — $ (377) $ 34,488 Corporate bonds 41,974 — (189) 41,785 Commercial paper 102,720 — — 102,720 Foreign government securities 4,023 — (10) 4,013 Total short-term investments $ 183,582 $ — $ (576) $ 183,006 January 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 18,082 $ — $ (155) $ 17,927 Corporate bonds 21,225 — (49) 21,176 Commercial paper 55,234 — — 55,234 Supranational bonds 3,503 — — 3,503 Foreign government securities 4,064 — (22) 4,042 Total short-term investments $ 102,108 $ — $ (226) $ 101,882 There were no material realized gains or losses from sales of marketable securities that were reclassified out of accumulated other comprehensive loss into investment income during fiscal 2023 and 2022. We had no significant unrealized losses on our available-for-sale securities as of January 31, 2023 and January 31, 2022, and we do not expect material credit losses on our current investments in future periods. All securities had stated effective maturities of less than one year as of January 31, 2023. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4. Fair Value Measurements The accounting guidance for fair value measurements establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level input Input definition Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date Level 3 Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. The following tables summarize our fair value hierarchy for our financial assets measured at fair value on a recurring basis (in thousands): January 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 184,580 $ — $ — $ 184,580 Short-term investments: U.S. government securities $ — $ 34,488 $ — $ 34,488 Corporate bonds — 41,785 — 41,785 Commercial paper — 102,720 — 102,720 Foreign government securities — 4,013 — 4,013 Total short-term investments $ — $ 183,006 $ — $ 183,006 Liabilities: Warrant liability $ — $ — $ 2,829 $ 2,829 January 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 92,668 $ — $ — $ 92,668 Short-term investments: U.S. government securities $ — $ 17,927 $ — $ 17,927 Corporate bonds — 21,176 — 21,176 Commercial paper — 55,234 — 55,234 Supranational bonds — 3,503 — 3,503 Foreign government securities — 4,042 — 4,042 Total short-term investments $ — $ 101,882 $ — $ 101,882 Changes in our Level 3 fair value measurements were as follows (in thousands): Warrant Liability Balance, January 31, 2022 $ — Issuances 12,043 Gain on change in fair value (9,214) Balance, January 31, 2023 $ 2,829 The carrying amounts of certain financial instruments, including cash held in bank accounts, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their relatively short maturities. As of January 31, 2023, the net carrying amount of the Initial Notes was $210.4 million, and the estimated fair value was $147.8 million. The fair value of the Initial Notes is classified as a Level 3 measurement. Additional information regarding the Initial Notes and Warrant liability is included in Note 9. Debt and Note 17. Warrants to Purchase Shares of Common Stock , respectively. Our long- and indefinite-lived assets are measured at fair value on a non-recurring basis and are reduced if the assets are determined to be impaired. During the fiscal years ended January 31, 2023 and January 31, 2022, we recognized impairment charges of $4.5 million and $12.8 million, respectively, related to ROU assets, leasehold improvements, and furniture and fixtures associated with certain of our operating leases for office spaces we have marketed for sublease. We estimated the fair value of these assets when we identified indicators of impairment using a market approach based on expected future cash flows from sublease income, which relied on certain assumptions made by management based on both internal and external data. These assumptions included estimates of the rental rate, discount rate, period of vacancy, incentives and annual rent increases, which were determined based on recent market comparable data and other data regarding general market conditions we reviewed in consultation with third-party commercial real estate experts. See Note 12. Leases |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Jan. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): January 31, 2023 2022 Prepaid software subscriptions $ 7,533 $ 6,854 Taxes 3,860 1,270 Prepaid insurance 3,225 3,220 Insurance payments receivable 2,000 — Contract assets 1,325 1,289 Deposits 1,168 250 Prepaid hosting costs 871 767 Other 4,303 1,953 Total $ 24,285 $ 15,603 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jan. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 6. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): January 31, 2023 2022 Software $ 32,778 $ 25,495 Leasehold improvements 1 15,254 17,277 Computer equipment 11,780 14,746 Furniture and fixtures 1 3,793 4,424 63,605 61,942 Less: accumulated depreciation and amortization (36,446) (34,266) Total $ 27,159 $ 27,676 _________________________________ (1) The cost basis of leasehold improvements and furniture and fixtures was reduced to reflect impairments of $1.1 million and $0.1 million, respectively, recorded during the fiscal year ended January 31, 2023. For more information, refer to Note 12. Leases . The following table summarizes the capitalized internal-use software costs included within the Software line item in the table above (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Internal-use software costs capitalized during the period $ 7,066 $ 5,785 $ 4,235 January 31, 2023 2022 Total capitalized internal-use software, net of accumulated amortization $ 14,138 $ 11,534 The following table summarizes total depreciation and amortization expense related to property and equipment, including amortization of internal-use software, included primarily in Cost of subscription revenue and General and administrative in the accompanying consolidated statements of comprehensive loss (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Total depreciation and amortization expense $ 9,668 $ 11,430 $ 10,571 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 7. Intangible Assets and Goodwill Intangible Assets The following table summarizes the purchased intangible asset balances (in thousands): January 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 19,571 $ (9,194) $ 10,377 Customer relationships 5,187 (3,225) 1,962 Trade names 1,709 (847) 862 Total $ 26,467 $ (13,266) $ 13,201 January 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 9,271 $ (7,692) $ 1,579 Customer relationships 4,287 (2,717) 1,570 Trade names 909 (606) 303 Total $ 14,467 $ (11,015) $ 3,452 Purchased intangible assets are being amortized primarily to Cost of subscription revenue in the accompanying consolidated statements of comprehensive loss on a straight-line basis over their estimated useful lives ranging from three Fiscal Year Ended January 31, 2023 2022 2021 Purchased intangible assets amortization expense $ 2,251 $ 2,050 $ 1,692 Estimated future amortization expense for purchased intangible assets as of January 31, 2023 was as follows (in thousands): Fiscal 2024 $ 2,953 Fiscal 2025 2,509 Fiscal 2026 1,874 Fiscal 2027 1,561 Fiscal 2028 1,561 Thereafter 2,743 $ 13,201 Goodwill The following table represents the changes to goodwill (in thousands): Goodwill Balance, January 31, 2022 $ 17,632 Addition from acquisition 35,009 Effects of foreign currency translation 1,350 Balance, January 31, 2023 $ 53,991 There were no changes in the carrying amount of goodwill for the fiscal year ended January 31, 2022. Zuora has one reporting unit. We performed an annual test for goodwill impairment as of December 1, 2022 and determined that goodwill was not impaired as a result of our qualitative assessment. In addition, there have |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Jan. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): January 31, 2023 2022 Litigation settlement $ 75,000 $ — Accrued contingent consideration 4,420 — Accrued hosting and third-party licenses 4,374 3,865 Accrued taxes 4,088 2,422 Accrued outside services and consulting 3,507 3,712 Warrant liability 2,829 — Accrued interest 850 3 Other accrued expenses 8,610 4,223 Total $ 103,678 $ 14,225 |
Debt
Debt | 12 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 9. Debt 2029 Notes On March 24, 2022 (Initial Closing Date), we issued convertible senior notes (Initial Notes) in the aggregate principal amount of $250.0 million pursuant to an investment agreement (Investment Agreement) and indenture agreement (Indenture) to certain entities affiliated with Silver Lake Alpine II, L.P. (Silver Lake). Pursuant to the Investment Agreement, we have agreed to issue additional convertible senior notes in the aggregate principal amount of $150.0 million (Additional Notes), (together with the Initial Notes, the “2029 Notes”) to Silver Lake 18 months after the Initial Closing Date, with an earlier issuance upon our completion of a Material Acquisition that meets the conditions described in Section 2.02(a) of the Investment Agreement. In addition, in the event that a Change in Control (as defined in the Indenture) occurs prior to the Additional Notes being issued, the noteholder would have the right to receive, at the noteholder's election, the Additional Notes, a cash payment, or common stock, as described in Section 2.02(b) of the Investment Agreement. The Initial Notes and the Additional Notes, once issued, represent senior unsecured obligations of Zuora. As a condition of the Investment Agreement, we also issued warrants to Silver Lake to acquire up to 7.5 million shares of Class A common stock (Warrants), of which (i) up to 2.5 million Warrants are exercisable at $20.00 per share, (ii) up to 2.5 million Warrants are exercisable at $22.00 per share and (iii) up to 2.5 million Warrants are exercisable at $24.00 per share. The Warrants are exercisable for a period of seven years from the Initial Closing Date. The purchase price of the 2029 Notes is 98% of the par value. The 2029 Notes bear interest at a rate of 3.95% per annum, payable quarterly in cash, provided that we have the option to pay interest in kind at 5.50% per annum. If elected, any such paid in kind interest will be added to the principal balance at each quarterly interest payment date. The 2029 Notes will mature on March 31, 2029, subject to earlier conversion or redemption. The Initial Notes are convertible at Silver Lake’s option into shares of our Class A common stock at an initial conversion rate of 50.0 shares per $1,000 principal amount ($20.00 per share, representing 12.5 million shares of Class A common stock), subject to customary anti-dilution adjustments. Any 2029 Notes that are converted in connection with a Make-Whole Fundamental Change (as defined in the Indenture) are subject to an increase in the conversion rate under certain circumstances. With certain exceptions, upon a Fundamental Change, the holders of the 2029 Notes may require that we repurchase all or part of the principal amount of the 2029 Notes at a purchase price equal to the principal amount and accrued but unpaid interest outstanding, plus the total sum of all remaining scheduled interest payments through the remainder of the term of the 2029 Notes, at the 5.50% paid in kind interest rate. At any time on or after the fifth anniversary of the Initial Closing Date, the holders of the 2029 Notes may require that we repurchase all or part of the principal amount of the Notes at a purchase price equal to the principal amount plus accrued interest through the date of repurchase. Upon certain events of default, the 2029 Notes may be declared due and payable (or will automatically become so under certain events of default), at a purchase price equal to the principal amount plus accrued interest through the date of repurchase. We have no right to redeem the 2029 Notes prior to maturity. Pursuant to the Investment Agreement, without our prior written consent, Silver Lake is restricted from converting any 2029 Note, exercising any Warrant or transferring any 2029 Note or Warrant to parties other than affiliates or members of Silver Lake (with certain limited exceptions) for 18 months following the Initial Closing Date, or if sooner, upon the consummation of any Change in Control (as defined in the Investment Agreement) or entry into a definitive agreement for a transaction that, if consummated, would result in a Change in Control. We determined that the Initial Notes arrangement consisted of three freestanding instruments: the Initial Notes, the Warrants and the loan commitment related to the Additional Notes. In addition, we evaluated the embedded features in the Initial Notes and identified certain embedded features which were not clearly and closely related to the Initial Notes and met the definition of a derivative, and therefore required bifurcation from the host contract. We determined that the fair value of these bifurcated derivatives was de minimis as of the Initial Closing Date and as of January 31, 2023. As further discussed in Note 17. Warrants to Purchase Shares of Common Stock , a portion of the Warrants issued were determined to require liability classification with the remaining Warrants eligible to be classified in stockholders’ equity. As such, we allocated the proceeds obtained from the Initial Notes first to the liability-classified Warrants and then, on a relative fair value basis, between the equity-classified Warrants and the Initial Notes. We incurred approximately $8.1 million of debt issuance costs associated with the 2029 Notes and Warrants. Of this amount, we allocated $7.1 million as a component of the discount on the 2029 Notes, $0.7 million against the proceeds allocated to the equity-classified Warrants and $0.3 million was allocated to the liability-classified Warrants and recorded to General and administrative expense in the accompanying consolidated statements of comprehensive loss. The 2029 Notes debt discount is being amortized using the effective interest rate method over the five year expected life of the 2029 Notes (representing the period from the contract date to the earliest noncontingent put date of May 24, 2027) and reflects an effective interest rate of 8.5%. The carrying value of the Initial Notes was classified as long-term and consisted of the following (in thousands): January 31, 2023 Initial Notes principal $ 250,000 Unamortized debt discount (39,597) Carrying value $ 210,403 Interest expense related to the Initial Notes, included in Interest expense in the accompanying audited condensed consolidated statements of comprehensive loss, was as follows (in thousands): Fiscal Year Ended January 31, 2023 Contractual interest expense $ 8,421 Amortization of debt discount 6,644 Total interest expense $ 15,065 Debt Agreement We have a $30.0 million revolving credit facility, which is currently undrawn, under an agreement (Debt Agreement) originally entered into with Silicon Valley Bank (SVB). This credit facility matures in October 2025. Following the closure of SVB in March 2023, the credit facility was subsequently assumed by First Citizens Bank & Trust Company. The interest rate under the credit facility is equal to the prime rate published by the Wall Street Journal minus 1.00%. We had not drawn down any amounts under the facility as of January 31, 2023. |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 12 Months Ended |
Jan. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Note 10. Deferred Revenue and Performance Obligations The following table summarizes revenue recognized during the period that was included in the deferred revenue balance at the beginning of each respective period (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Revenue recognized from deferred revenue $ 147,036 $ 126,245 $ 107,091 As of January 31, 2023, total remaining non-cancellable performance obligations under our subscription contracts with customers was approximately $500.3 million and we expect to recognize revenue on approximately 59% of these remaining performance obligations over the next 12 months. Remaining performance obligations under our professional services contracts as of January 31, 2023 were not material. |
Geographical Information
Geographical Information | 12 Months Ended |
Jan. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Geographical Information | Note 11. Geographical Information Disaggregation of Revenue Revenue by country, based on the customer’s address at the time of sale, was as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 United States $ 257,653 $ 218,502 $ 200,273 Others 138,434 128,236 105,147 Total $ 396,087 $ 346,738 $ 305,420 Percentage of revenue by country: United States 65 % 63 % 66 % Other 35 % 37 % 34 % Other than the United States, no individual country exceeded 10% of total revenue for fiscal 2023, 2022 and 2021. Long-lived assets Long-lived assets, which consist of property and equipment, net, deferred commissions, purchased intangible assets, net and operating lease right-of-use assets by geographic location, are based on the location of the legal entity that owns the asset. As of January 31, 2023 and 2022, no individual country exceeded 10% of total long-lived assets other than the United States. |
Leases
Leases | 12 Months Ended |
Jan. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 12. Leases We have non-cancelable operating leases for our offices located in the U.S. and abroad. As of January 31, 2023, these leases expire on various dates between 2023 and 2030. Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease up to seven years. We have the right to exercise or forego the lease renewal options. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of our long-term operating leases and related operating lease cost were as follows (in thousands): January 31, 2023 2022 Operating lease right-of-use assets $ 22,768 $ 32,643 Operating lease liabilities, current portion $ 9,240 $ 11,462 Operating lease liabilities, net of current portion 37,924 45,633 Total operating lease liabilities $ 47,164 $ 57,095 Fiscal Year Ended January 31, 2023 2022 2021 Operating lease cost 1 $ 9,933 $ 12,681 $ 11,933 _________________________________ (1) Includes costs related to our short-term operating leases and is net of sublease income as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Short-term operating lease cost $ 483 $ 402 $ 193 Sublease income $ (98) $ — $ — The future maturities of long-term operating lease liabilities for each fiscal year were as follows (in thousands): Maturities of Operating Lease Liabilities 2024 $ 11,288 2025 6,874 2026 6,493 2027 6,705 2028 6,800 Thereafter 17,412 Total lease payments 55,572 Less imputed interest (8,408) Present value of lease liabilities $ 47,164 Other supplemental information related to our long-term operating leases includes the following (dollars in thousands): January 31, 2023 2022 Weighted-average remaining operating lease term 6.7 years 7.0 years Weighted-average operating lease discount rate 4.8 % 4.6 % Fiscal Year Ended January 31, 2023 2022 2021 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ 12,802 $ 13,701 $ 9,693 Operating cash flows resulting from operating leases $ 12,802 $ 13,701 $ 9,693 New right-of-use assets obtained in exchange for lease liabilities: Operating leases obtained $ 799 $ 5,040 $ 1,064 As of January 31, 2023, we had $3.4 million of undiscounted future payments for an operating lease that had not yet commenced, which is excluded from the tables above and is not yet recognized in our consolidated balance sheets. This operating lease is expected to commence in fiscal year 2024 and has a lease term of 36 months. During the fiscal years ended January 31, 2023 and January 31, 2022, we identified indicators of impairment for certain of our excess office spaces that we have marketed for sublease. In accordance with ASC Topic 360, we evaluated the associated asset groups for impairment, which included the ROU assets, leasehold improvements, and furniture and fixtures for each office space, as the change in circumstances indicated that the carrying amount of the asset groups may not be recoverable. We compared the expected future undiscounted cash flows for each office space to the carrying amount of each respective asset group and determined that they were impaired. We recognized the excess of the carrying value over the fair value of the asset groups, which totaled $4.5 million and $12.8 million during the fiscal years ended January 31, 2023 and January 31, 2022, respectively, as an impairment expense in the accompanying consolidated statements of comprehensive loss under General and administrative. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Letters of Credit In connection with the execution of certain facility leases, we had bank issued irrevocable letters of credit for $4.5 million, $4.5 million and $4.7 million as of January 31, 2023, 2022 and 2021, respectively. No draws have been made under such letters of credit. Legal Proceedings From time to time, we may be subject to legal proceedings, as well as demands, claims and threatened litigation. The outcomes of legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. Regardless of the outcome, litigation can have an adverse impact on our business because of defense and settlement costs, diversion of management resources, and other factors. Other than the matters described below, we are not currently party to any legal proceeding that we believe could have a material adverse effect on our business, operating results, cash flows, or financial condition should such litigation or claim be resolved unfavorably. Securities Class Action Litigation Federal Litigation . In June 2019, a putative securities class action lawsuit was filed in the U.S. District Court for the Northern District of California naming Zuora and certain of its officers as defendants. The complaint purports to bring suit on behalf of stockholders who purchased or otherwise acquired Zuora's securities between April 12, 2018 and May 30, 2019. The complaint alleges that defendants made false and misleading statements about Zuora's business, operations and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (Exchange Act), and seeks unspecified compensatory damages, fees and costs. In November 2019, the lead plaintiff filed a consolidated amended complaint asserting the same claims. This consolidated class action litigation is captioned Roberts v. Zuora, Inc. , Case No. 3:19-CV-03422. In April 2020, the court denied defendants’ motion to dismiss. On March 15, 2021, the court granted plaintiff’s motion to certify a class consisting of persons and entities who purchased or acquired Zuora common stock between April 12, 2018 and May 30, 2019 and who were allegedly damaged thereby. Discovery in this case concluded in October 2022. On March 31, 2023, Zuora entered into an agreement to settle this consolidated class action litigation. The settlement provides for a payment of $75.0 million by Zuora, which we recorded as an accrual and is included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheet as of January 31, 2023. We expect approximately $6.6 million of the settlement to be funded by our remaining insurance coverage. The settlement is subject to court approval. Zuora entered into the settlement to eliminate the uncertainty, burden, and expense of further protracted litigation. Zuora denies the claims alleged in the litigation, and the settlement does not assign or reflect any admission of wrongdoing or liability by Zuora or the named defendants. State Litigation . In April and May 2020, two putative securities class action lawsuits were filed in the Superior Court of the State of California, County of San Mateo, naming as defendants Zuora and certain of its current and former officers, its directors and the underwriters of Zuora's initial public offering (IPO). The complaints purport to bring suit on behalf of stockholders who purchased or otherwise acquired Zuora's securities pursuant or traceable to the Registration Statement and Prospectus issued in connection with Zuora's IPO and allege claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The suits seek unspecified damages and other relief. In July 2020, the court entered an order consolidating the two lawsuits, and the lead plaintiffs filed a consolidated amended complaint asserting the same claims. This consolidated class action litigation is captioned Olsen v. Zuora, Inc ., Case No. 20-civ-1918. In October 2020, the court denied defendants’ demurrer as to the Section 11 and Section 15 claims and granted the demurrer as to the Section 12(a)(2) claim with leave to file an amended complaint. In November 2020, the lead plaintiffs filed an amended consolidated complaint. Defendants' demurrer to the Section 12(a)(2) claim was sustained with leave to amend. In October 2021, the court certified a class for the Section 11 and Section 15 claims, consisting of persons and entities who purchased or acquired Zuora common stock pursuant or traceable to the Registration Statement and Prospectus issued in connection with Zuora’s IPO. The lead plaintiffs voluntarily dismissed the Section 12(a)(2) claim without prejudice. Discovery in this case is ongoing. We dispute the claims and intend to vigorously defend against them. While Zuora cannot predict the ultimate outcome of this litigation, Zuora recorded an accrual of $1.0 million based on its assessment of the potential loss that may result from this matter, which amount is included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheet as of January 31, 2023. Derivative Litigation In September 2019, two stockholder derivative lawsuits were filed in the U.S. District Court for the Northern District of California against certain of Zuora's directors and executive officers and naming Zuora as a nominal defendant. The derivative actions allege claims based on events similar to those in the securities class actions and assert causes of action against the individual defendants for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and for making false and misleading statements about Zuora's business, operations, and prospects in violation of Section 14(a) of the Exchange Act. Plaintiffs seek corporate reforms, unspecified damages and restitution, and fees and costs. In November 2019, the stockholder derivative lawsuits, which are related to the federal securities class action, were assigned to the same judge who is overseeing the federal securities class action lawsuit. In February 2020, the court entered an order consolidating the two derivative lawsuits, and in March 2022, plaintiffs filed a consolidated complaint. In May and June 2020, two stockholder derivative lawsuits were filed in the U.S. District Court for the District of Delaware against certain of Zuora's directors and current and former executive officers. The derivative actions allege claims based on events similar to those in the securities class actions and the derivative actions pending in the Northern District of California and assert causes of action against the individual defendants for breach of fiduciary duty, unjust enrichment, waste of corporate assets, contribution, and for making false and misleading statements about Zuora's business, operations, and prospects in violation of Section 14(a) of the Exchange Act. Plaintiff seeks corporate reforms, unspecified damages and restitution, and fees and costs. In June 2020, the court entered an order consolidating the two District of Delaware derivative lawsuits. In February and March 2021, two additional stockholder derivative lawsuits were filed in Delaware Chancery Court alleging similar claims based on the same underlying events. The two Chancery Court cases were consolidated and an amended consolidated complaint was filed. In May 2022, a stockholder derivative lawsuit was filed in the U.S. District Court for the Northern District of California against certain of Zuora’s directors and executive officers and naming Zuora as a nominal defendant. The derivative action alleges claims based on events similar to those in the securities class actions and asserts causes of action against the individual defendants for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and contribution. Plaintiff seeks corporate reforms, unspecified damages and restitution, and fees and costs. In February 2023, Zuora reached an agreement to settle the derivative litigation matters without any admission or concession of wrongdoing or liability by Zuora or the named defendants. In connection with the settlement, Zuora has agreed to adopt and implement certain corporate governance modifications and pay for certain plaintiffs' attorney fees, which amount Zuora expects to be fully covered by insurance proceeds. The settlement is subject to court approval. Other Contractual Obligations As of January 31, 2023, we have contractual obligations to make $31.5 million in purchases of cloud computing services provided by one of our vendors by September 2024, and $2.8 million in purchases of software services provided by one of our vendors by January 2025. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes Net loss before provision for income taxes consisted of the following (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Domestic $ (193,031) $ (101,626) $ (77,140) Foreign 5,643 3,628 5,839 Loss before income taxes $ (187,388) $ (97,998) $ (71,301) The components of our income tax provision are as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Current: Federal $ — $ — $ — State 189 163 46 International 10,332 799 1,480 $ 10,521 $ 962 $ 1,526 Deferred: Federal $ — $ — $ — State — — — International 61 465 347 Income tax provision $ 10,582 $ 1,427 $ 1,873 A reconciliation of the U.S. federal statutory tax rate to our provision for income tax is as follows (dollars in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Federal income tax benefit at statutory rates $ (39,351) $ (20,580) $ (14,973) State income taxes, net of effect of federal (5,312) (3,466) (2,072) Permanent differences 450 772 718 Warrant adjustment (1,935) — — Federal and state R&D credits (6,144) (11,263) (1,325) Impact from international operations 9,230 502 600 Stock-based compensation 7,772 (3,427) 1,250 Tax effects of intercompany transactions (7,204) — — Other 312 (1,174) 2,435 Change in valuation allowance 52,764 40,063 15,240 Income tax provision $ 10,582 $ 1,427 $ 1,873 Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our deferred income tax assets and liabilities consisted of the following (in thousands): January 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 139,298 $ 133,994 Tax credit carryforwards 27,256 21,112 Allowances and other 34,884 14,220 Intangibles/Goodwill 3,684 — Depreciation and amortization 1,949 2,771 Operating lease liability 11,314 13,894 R&D Capitalization 21,040 — Total deferred tax assets $ 239,425 $ 185,991 Deferred tax liabilities: Deferred commissions $ (11,938) $ (10,949) Intangibles — (3,253) Operating lease right-of-use asset (5,368) (8,001) Total deferred tax liabilities (17,306) (22,203) Valuation allowance (224,648) (166,212) Net deferred tax liabilities $ (2,529) $ (2,424) We have assessed, based on available evidence, both positive and negative, it is more likely than not that the deferred tax assets will not be utilized, such that a valuation allowance has been recorded. The valuation allowance increased by $58.4 million and $40.1 million, respectively, for fiscal 2023 and 2022. As of January 31, 2023, we had U.S. federal and state net operating loss carryforwards of approximately $523.5 million and $349.7 million, respectively, available to offset future taxable income. As of January 31, 2022, we had U.S. federal and state net operating loss carryforwards of approximately $530.8 million and $345.1 million, respectively, available to offset future taxable income. If not utilized, these carryforward losses will expire in various amounts for federal and state tax purposes beginning in 2031 and 2028, respectively. In addition, Zuora has approximately $296.9 million of federal net operating loss carryforwards that arose after the 2017 tax year, which are available to reduce future federal taxable income, if any, over an indefinite period. The utilization of those net operating loss carryforwards is limited to 80% of taxable income in any given year. We have approximately $20.5 million and $18.5 million of federal and state research and development tax credits, respectively, available to offset future taxes as of January 31, 2023, and approximately $15.7 million and $14.5 million of federal and state research and development tax credits, respectively, available to offset future taxes as of January 31, 2022. If not utilized, the federal credits will begin to expire in 2031. California state research and development tax credits may be carried forward indefinitely. Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the "ownership change" limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and other similar state provisions. Any annual limitation may result in the expiration of net operation loss and tax credit carryforwards before utilization. On March 27, 2020, the CARES Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. Changes in tax laws or rates are accounted for in the period of enactment. Under the CARES Act, we deferred payment of $3.6 million in employer FICA taxes related to the period from March 27, 2020 through December 31, 2020, of which $1.6 million was paid on December 31, 2021. The remaining $2.0 million was paid on December 31, 2022. The income tax provisions of the CARES Act did not have a significant impact on our current taxes, deferred taxes, and uncertain tax positions. The amount of accumulated foreign earnings of our foreign subsidiaries was immaterial as of January 31, 2023. If our foreign earnings were repatriated, additional tax expense might result. Any additional taxes associated with such repatriation would be immaterial. We are required to inventory, evaluate, and measure all uncertain tax positions taken or to be taken on tax returns and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. As of January 31, 2023, our total gross unrecognized tax benefits were $18.4 million exclusive of interest and penalties described below. As of January 31, 2022, our total gross unrecognized tax benefits were $10.2 million exclusive of interest and penalties described below. Because of our valuation allowance position, $7.0 million of unrecognized tax benefits, if recognized, would reduce the effective tax rate in a future period. We do not expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date. A reconciliation of the beginning and ending amounts of uncertain tax position is as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Gross amount of unrecognized tax benefits as of the beginning of the period $ 10,228 $ 9,385 $ 8,070 Increase for tax positions related to prior years — 1,135 — Decrease for tax positions related to prior years (124) (2,895) (5) Increase for tax positions related to the current year 8,247 2,603 1,320 Gross amount of unrecognized tax benefits as of the end of the period $ 18,351 $ 10,228 $ 9,385 We file tax returns in the U.S. federal, and various state and foreign jurisdictions. All U.S. federal and state jurisdictions' tax years remain subject to examination by tax authorities due to the carryforward of unused net operating losses and research and development credits. In addition, tax years starting from 2008 are subject to examination. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Note 15. Stockholders' Equity Preferred Stock As of January 31, 2023, we had authorized 10 million shares of preferred stock, each with a par value of $0.0001 per share. As of January 31, 2023, no shares of preferred stock were issued and outstanding. Common Stock Prior to Zuora's IPO, all shares of common stock then outstanding were reclassified into Class B common stock. Shares offered and sold in the IPO consisted of newly authorized shares of Class A common stock. Holders of Class A and Class B common stock are entitled to one vote per share and ten votes per share, respectively, and the shares of Class A common stock and Class B common stock are identical, except for voting rights and the right to convert Class B shares to Class A shares. As of January 31, 2023, Zuora had authorized 500 million shares of Class A common stock and 500 million shares of Class B common stock, each with a par value of $0.0001 per share. As of January 31, 2023, 127.4 million shares of Class A common stock and 8.1 million shares of Class B common stock were issued and outstanding. Charitable Contributions During fiscal 2023 and fiscal 2022, we donated 101,317 and 61,012 shares of our Class A common stock, respectively, to a charitable donor-advised fund and recognized $1.0 million in both fiscal years as a non-cash general and administrative expense in our consolidated statement of comprehensive loss. Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows (in thousands): Foreign Currency Translation Adjustment Unrealized Loss on Available-for-Sale Securities Total Balance, January 31, 2022 $ 118 $ (226) $ (108) Foreign currency translation adjustment (461) — (461) Unrealized loss on available-for-sale securities — (350) (350) Balance, January 31, 2023 $ (343) $ (576) $ (919) |
Employee Stock Plans
Employee Stock Plans | 12 Months Ended |
Jan. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Employee Stock Plans | Note 16. Employee Stock Plans Equity Incentive Plans In March 2018, our Board of Directors adopted and our stockholders approved the 2018 Equity Incentive Plan (2018 Plan). The 2018 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units (RSUs), performance awards, and stock bonuses. As of January 31, 2023, approximately 25.3 million shares of Class A common stock were reserved and available for issuance under the 2018 Plan. In addition, as of January 31, 2023, 4.2 million stock options and RSUs exercisable or settleable for Class B common stock were outstanding in the aggregate under our 2006 Stock Plan (2006 Plan) and 2015 Equity Incentive Plan (2015 Plan), which plans were terminated in May 2015 and April 2018, respectively. The 2006 Plan and 2015 Plan continue to govern outstanding equity awards granted thereunder. Stock Options The following table summarizes stock option activity and related information (in thousands, except weighted-average exercise price, weighted-average grant date fair value and average remaining contractual term): Shares Weighted Average Aggregate Balance as of January 31, 2022 8,560 $ 9.22 5.9 $ 67,259 Granted 20 12.52 Exercised (477) 5.12 Forfeited (342) 13.62 Balance as of January 31, 2023 7,761 9.28 5.0 14,505 Exercisable as of January 31, 2023 3,198 3.38 2.5 14,505 Vested and expected to vest as of January 31, 2023 7,660 $ 9.22 4.9 $ 14,505 Fiscal Year Ended January 31, 2023 2022 2021 Weighted-average grant date fair value per share of options granted during each respective period $ 5.54 $ 6.54 $ 4.69 Aggregate intrinsic value of options exercised during each respective period $ 2,600 $ 32,179 $ 22,677 We used the Black-Scholes option-pricing model to estimate the fair value of our stock options granted during each respective period using the following assumptions: Fiscal Year Ended January 31, 2023 2022 2021 Fair value of common stock $ 12.52 $15.64 - $15.87 $9.99 - $14.75 Expected volatility 42.6 % 42.3% - 42.7% 41.4% - 42.4% Expected term (in years) 5.8 6.0 - 6.1 6.0 - 6.1 Risk-free interest rate 3.0 % 1.0% - 1.1% 0.4% - 0.6% Expected dividend yield — — — RSUs The following table summarizes RSU activity and related information (in thousands except weighted-average grant date fair value): Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Balance as of January 31, 2022 12,171 $ 15.46 Granted 9,292 11.46 Vested (5,795) 15.02 Forfeited (3,164) 14.35 Balance as of January 31, 2023 12,504 $ 12.98 Performance Stock Units (PSUs) In March 2022, we granted PSUs to certain executives under our 2018 Plan. Each grant is divided into three tranches, each tranche having pre-established performance targets that if met, as determined quarterly by our Compensation Committee, would result in the shares attributable to such tranche being earned, subject to a service-based vesting condition. The shares attributable to unearned tranches will be forfeited on January 31, 2025, if the applicable performance criteria for such tranches are not met. Stock-based compensation expense is recognized if it is probable the performance targets (for each respective tranche) will be met during the performance period. As of January 31, 2023, we deemed all outstanding PSUs to be improbable of vesting and we recorded an adjustment to reverse all $7.0 million of previously recognized expense incurred during fiscal 2023. The following table summarizes PSU activity and related information (in thousands, except weighted-average grant date fair value): Number of PSUs Outstanding Weighted-Average Grant Date Fair Value Balance as of January 31, 2022 — $ — Granted 2,905 15.21 Vested — — Forfeited — — Balance as of January 31, 2023 2,905 $ 15.21 2018 Employee Stock Purchase Plan In March 2018, our Board of Directors adopted and our stockholders approved the 2018 Employee Stock Purchase Plan (ESPP). This plan is broadly available to our employees in most of the countries in which we operate. A total of 4.2 million shares of Class A common stock were reserved and available for issuance under the ESPP as of January 31, 2023. The ESPP provides for 24-month offering periods beginning June 15 and December 15 of each year, and each offering period contains four, six-month purchase periods. On each purchase date, ESPP participants will purchase shares of our Class A common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Class A common stock on the offering date or (2) the fair market value of the Class A common stock on the purchase date. We estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended January 31, 2023 2022 2021 Fair value of common stock $6.15 - $8.91 $16.07 - $19.82 $12.15 - $13.50 Expected volatility 42.4% - 52.3% 34.4% - 53.2% 43.6% - 69.1% Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Risk-free interest rate 2.3% - 4.7% 0.1% - 0.7% 0.1% - 0.2% Expected dividend yield — — — Stock-based Compensation Expense Stock-based compensation expense was recorded in the following cost and expense categories in the accompanying consolidated statements of comprehensive loss (in thousands): January 31, 2023 2022 2021 Cost of subscription revenue $ 8,141 $ 5,875 $ 4,849 Cost of professional services revenue 12,297 10,274 9,952 Research and development 25,819 21,072 19,562 Sales and marketing 33,075 22,484 15,839 General and administrative 17,069 12,365 9,081 Total stock-based compensation expense $ 96,401 $ 72,070 $ 59,283 During the three months ended July 31, 2020, in light of the COVID-19 pandemic and for retention purposes, we issued RSU grants for 0.7 million shares of Class A common stock to eligible non-executive employees. These RSU awards have fully vested and we recognized $7.6 million of stock-based compensation expense related to these awards during fiscal year 2021. As of January 31, 2023, unrecognized compensation costs related to unvested equity awards and the weighted-average remaining period over which those costs are expected to be realized were as follows (dollars in thousands): Stock Options RSUs PSUs ESPP Unrecognized compensation costs $ 5,604 $ 131,879 $ 44,185 $ 9,406 Weighted-average remaining recognition period 1.6 years 2.1 years 2.2 years 1.2 years |
Warrants to Purchase Shares of
Warrants to Purchase Shares of Common Stock | 12 Months Ended |
Jan. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Warrants to Purchase Shares of Common Stock | Note 17. Warrants to Purchase Shares of Common Stock In connection with the issuance of the 2029 Notes (discussed Note 9. Debt ), we issued to Silver Lake the Warrants to acquire up to 7.5 million shares of Class A common stock, exercisable for a period of approximately seven years from the Initial Closing Date, and of which (i) Warrants to purchase up to 2.5 million shares of Class A common stock are exercisable at $20.00 per share, (ii) Warrants to purchase up to 2.5 million shares of Class A common stock are exercisable at $22.00 per share and (iii) Warrants to purchase up to 2.5 million shares of Class A common stock are exercisable at $24.00 per share. In addition, Silver Lake can elect to exercise the Warrants on a net-exercise basis. If a Make-Whole Fundamental Change (as defined in the Form of Warrant) occurs, then the number of shares issuable upon exercise of the Warrants may be increased, and the exercise price for the Warrants adjusted. Beginning on the Initial Closing Date and ending on the earlier of (i) the date that is 18 months following the Initial Closing Date and (ii) the consummation of any Change in Control, except for certain limited exceptions, the Warrants are only exercisable with our written approval. As of January 31, 2023 , all 7.5 million Warrants were outstanding. We have classified a portion of the Warrants as a current liability due to certain settlement provisions in the Warrants. Under certain Make-Whole Fundamental Change scenarios, we would be required to, at our option, either (i) obtain shareholder approval prior to issuing 20% or more of our outstanding common stock or (ii) pay cash in lieu of delivering any shares at or above such 20% threshold. As a result, we concluded that approximately 2.8 million Warrants valued at $12.0 million as of the Initial Closing Date do not qualify for equity classification under ASC 815-40, pursuant to our sequencing policy described in Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements. We will reassess the classification of the Warrant liability in future reporting periods to determine if any change is required. The Warrants were measured using the Black-Scholes option pricing model at the issuance date (Initial Closing Date) and the Warrant liability was remeasured using the same model as of January 31, 2023 using the following inputs: January 31, 2023 March 24, 2022 Fair value of common stock 1 $ 7.24 $ 13.77 Exercise price² $22.00 - $24.00 $22.00 - $24.00 Expected volatility 41.2 % 41.9 % Expected term (in years) 6.2 7.0 Risk-free interest rate 3.6 % 2.4 % Expected dividend yield — — ______________ (1) The fair value of common stock was adjusted to reflect certain restrictions on the Warrants for 18 months following the issuance date. (2) The range of exercise prices reflects the Warrants that were liability-classified. As of January 31, 2023, the liability-classified Warrants were revalued to $2.8 million. This resulted in a realized gain of $9.2 million in fiscal year 2023, which is included in Change in fair value of warrant liability |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Jan. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 18. Net Loss Per Share We calculate our basic and diluted net loss per share in conformity with the two-class method required for companies with participating securities. Under the two-class method, basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, less shares subject to repurchase. The diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, RSUs, PSUs, shares issuable pursuant to our ESPP, and shares subject to repurchase from early exercised options and unvested restricted stock are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive. The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting and conversion. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis. We did not present dilutive net loss per share on an as-if converted basis because the impact was not dilutive. The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Fiscal Year Ended January 31, 2023 2022 2021 Numerator: Net loss $ (197,970) $ (99,425) $ (73,174) Denominator: Weighted-average common shares outstanding, basic and diluted 131,441 124,206 117,598 Net loss per share, basic and diluted $ (1.51) $ (0.80) $ (0.62) Since we were in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands): As of January 31, 2023 2022 2021 Unvested RSUs issued and outstanding 12,504 12,171 8,278 Initial Notes conversion 12,500 — — Issued and outstanding stock options 7,761 8,560 11,812 Warrants 7,500 — — Unvested PSUs issued and outstanding 2,905 — — Shares committed under ESPP 316 144 139 Total 43,486 20,875 20,229 |
Zephr Acquisition
Zephr Acquisition | 12 Months Ended |
Jan. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Zephr Acquisition | Note 19. Zephr Acquisition On September 2, 2022 (Acquisition Closing Date), we acquired all of the outstanding equity securities of Zephr, a leading Subscription Experience Platform used by global digital publishing and media companies, pursuant to a Share Purchase Agreement (Zephr SPA). Purchase Consideration The purchase consideration for the Zephr acquisition was $47.9 million, which includes (1) cash payments of $43.1 million and (2) contingent consideration with an estimated fair value of $4.8 million on the Acquisition Closing Date, payable if certain conditions are met. The contingent consideration arrangement requires us to pay the former stockholders of Zephr a multiple of the amount by which Zephr’s Annual Recurring Revenue (ARR) as of January 31, 2023 exceeds a target set in the Zephr SPA. The payment is between zero and $6.0 million, dependent upon Zephr's ARR achievement. The fair value of the contingent consideration arrangement as of the Acquisition Closing Date was $4.8 million and was estimated by applying a probability-weighted discounted cash flow method. This analysis reflects the contractual terms of the Zephr SPA (e.g., potential payment amounts, length of measurement periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows, and a discount rate. As of January 31, 2023, the contingent consideration arrangement was revalued to $4.4 million based on the expected final payout amount, resulting in a credit of $0.4 million which is included in General and administrative in the accompanying consolidated statements of comprehensive loss. Contingent consideration was classified as a liability and included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Assets and Liabilities Acquired The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The excess of the purchase price over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed has been recorded as goodwill. The Zephr acquisition resulted in recorded goodwill as a result of the synergies expected to be realized and how we expect to leverage the business to create additional value for our shareholders. The goodwill is not expected to be deductible for income tax purposes. The following table summarizes the preliminary estimate of the fair value of the assets acquired and liabilities assumed as of September 2, 2022 (in thousands): Total Cash $ 2,103 Accounts receivable 641 Prepaid expenses and other current assets 916 Fixed Assets 120 Intangible assets: Tradename 800 Developed technology 10,300 Customer relationships 900 Goodwill 35,009 Accounts payable (292) Accrued liabilities (303) Other current liabilities (225) Deferred revenue (2,056) Fair value of net assets acquired $ 47,913 The fair value of the acquired trade accounts receivables approximates the carrying value of trade accounts receivables due to the short-term nature of the expected timeframe to collect the amounts due to us and the contractual cash flows, which are expected to be collected related to these receivables. We engaged a third-party specialist to assist management in the determination of the estimated fair value of intangible assets acquired. Variations of the income approach were used to estimate the fair values. Specifically, the relief from royalty method was used to measure the trade name, the multi period excess earnings method was used to measure the developed technology, and the distributor method was used to measure the customer relationships. The following table summarizes the acquired identifiable intangible assets, Acquisition Closing Date estimated fair values, and estimated useful lives (dollars in thousands): Fair Value Useful Life Trade name $ 800 3.0 years Developed technology 10,300 7.0 years Customer relationships 900 10.0 years Total intangible assets acquired $ 12,000 The estimated fair values of the consideration transferred and net assets acquired are subject to refinement for up to one year after the Acquisition Closing Date as additional information regarding closing date fair value becomes available. During this one-year period, the causes of any changes in cash flow estimates are considered to determine whether the change results from circumstances that existed at the acquisition date, or if the change results from an event that occurred after the Acquisition Closing Date. As of January 31, 2023, the purchase price allocation for Zephr is preliminary as we finalize our internal reviews. Transaction Costs We incurred transaction costs in connection with the acquisition of $3.2 million during the fiscal year ended January 31, 2023, which were expensed as incurred and reflected as part of General and administrative within the accompanying consolidated statements of comprehensive loss. Employee Deferral We agreed to pay $2.9 million to certain former Zephr employees, half of which is payable on September 2, 2023 and the remainder of which is payable on September 2, 2024, contingent upon continued employment with us through those dates. These costs are being recognized as compensation expense as service is provided through the respective payment dates. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 20. Subsequent Events Litigation Settlements In February 2023, Zuora reached an agreement to settle the previously disclosed stockholder derivative litigation matters without any admission or concession of wrongdoing or liability by Zuora or the named defendants. In connection with the settlement, Zuora has agreed to adopt and implement certain corporate governance modifications and pay for certain plaintiffs' attorney fees, which amount Zuora expects to be fully covered by insurance proceeds. The settlement is subject to court approval. In addition, on March 31, 2023, Zuora agreed to settle the previously disclosed consolidated securities class action litigation pending in the U.S. District Court for the Northern District of California and consolidated under the caption Roberts v. Zuora, Inc . The settlement provides for a payment of $75.0 million by Zuora, which we recorded as an accrual in the consolidated balance sheet as of January 31, 2023. We expect approximately $6.6 million of the settlement to be funded by our remaining insurance coverage. The settlement is subject to court approval. Zuora entered into the settlement to eliminate the uncertainty, burden, and expense of further protracted litigation. Zuora denies the claims alleged in the litigation, and the settlement does not assign or reflect any admission of wrongdoing or liability by Zuora or the named defendants. For more information, see Note 13. Commitments and Contingencies . Silicon Valley Bank Closure On March 10, 2023, Silicon Valley Bank (SVB) was closed, and the Federal Deposit Insurance Corporation (FDIC) was named as receiver. While SVB was our primary bank at the time of its closure, the vast majority of our total cash, cash equivalents and short-term investments resided in custodial accounts held by U.S. Bank for which SVB Asset Management was the advisor. The FDIC subsequently transferred SVB’s deposits and loans to a newly created bridge bank, named Silicon Valley Bridge Bank, N.A. On March 27, 2023, First Citizens Bank & Trust Company (First Citizens Bank) purchased and assumed all deposits and loans of Silicon Valley Bridge Bank. As a result, all of our deposits that were at SVB and our undrawn $30.0 million revolving credit facility are now with First Citizens Bank. We currently have access to all cash, cash equivalents and short-term investments that had been in SVB accounts, and do not expect losses or material disruptions to our ongoing operations due to SVB's closure. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of Zuora and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Our most significant estimates and assumptions are related to revenue recognition with respect to the determination of the relative standalone selling prices for our services; the expected period of benefit over which deferred commissions are amortized; valuation of stock-based awards, our convertible senior notes and warrants; estimates of allowance for credit losses; estimates of the fair value of goodwill and long-lived assets when evaluating for impairments and for assets acquired from acquisitions; useful lives of intangibles and other long-lived assets; and the valuation of deferred income tax assets and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ materially from these estimates under different assumptions or conditions. |
Foreign Currency | Foreign Currency The functional currencies of our foreign subsidiaries are the respective local currencies. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss within our consolidated balance sheets. Foreign currency transaction gains and losses are included in interest and other income (expense), net in the consolidated statements of comprehensive loss and were not material for fiscal 2023, 2022 and 2021. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the average exchange rate during the period, and equity balances are translated using historical exchange rates. |
Segment Information | Segment Information We operate as one operating segment. Our chief operating decision maker is our Chief Executive Officer, who primarily reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. |
Revenue Recognition Policy | Revenue Recognition Policy We generate revenue primarily from two sources: (1) subscription services, which is comprised of revenue from subscription fees from customers accessing our cloud-based software; and (2) professional services and other revenue. For the fiscal year ended January 31, 2023, subscription revenue was $338.4 million and professional services and other revenue was $57.7 million. Revenue is recognized upon satisfaction of performance obligations in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine the amount of revenue to be recognized through application of the following steps: ◦ Identification of the contract, or contracts with a customer; ◦ Identification of the performance obligations in the contract; ◦ Determination of the transaction price; ◦ Allocation of the transaction price to the performance obligations in the contract; and ◦ Recognition of revenue when or as we satisfy the performance obligations. Our subscription service arrangements are typically non-cancelable for a pre-specified subscription term and do not typically contain refund-type provisions. Subscription Services Subscription services revenue is primarily comprised of fees that provide customers with access to our cloud-based software during the term of the arrangement. Cloud-based services typically allow our customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract, which is the date our cloud-based software is made available to customers. We generally invoice for subscription services annually or quarterly in advance of services being performed. Subscription agreements generally have terms ranging from one Professional Services and Other Revenue Professional services revenue consists of fees for services related to helping our customers deploy, configure, and optimize the use of our solutions. These services include system integration, data migration, and process enhancement. Professional services projects generally take three Contracts with Multiple Performance Obligations We enter into contracts with our customers that often include cloud-based software subscriptions and professional services performance obligations. A performance obligation is a commitment in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require judgment. Our cloud-based software subscriptions are distinct as such services are often sold separately. In addition, our subscription services contracts can include multi-year agreements that include a fixed annual platform fee and a volume block usage fee that may vary based on permitted volume usage each year. To the extent that permitted volume usage each year is the same, we have concluded that there is one multi-year stand-ready performance obligation. To the extent that permitted volume usage each year varies, we have concluded that each year represents a distinct stand-ready performance obligations and we allocate the transaction price to the performance obligations on a relative standalone-selling price basis and revenue is recognized ratably over each year. We consider the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the cloud-based software, start date and the contractual dependence of the cloud-based software on the customer’s satisfaction with the professional services work. To date, we have concluded that all of the professional services included in contracts with multiple performance obligations are distinct. We allocate the transaction price to each performance obligation on a relative standalone selling price (SSP) basis. The SSP is the estimated price at which we would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. We establish SSP for both our subscription services and professional services elements primarily by considering the actual sales prices of the element when sold on a stand-alone basis or when sold together with other elements. If we are unable to rely on actual observable sales inputs, we determine SSP based on inputs such as actual sales prices when sold together with other promised subscriptions or services and other factors such as our overarching pricing objectives and strategies. Deferred Commissions We capitalize sales commission expenses and associated payroll taxes paid to internal sales personnel that are incremental to obtaining customer contracts. These costs are deferred and then amortized over the expected period of benefit, which is estimated to be five years for new customers. Commissions for existing customer renewals are deferred and amortized over twelve months. We have determined the period of benefit taking into consideration several factors including the expected subscription term and expected renewals of our customer contracts, the duration of our relationships with our customers, and the life of our technology. Amortization expense is included in Sales and marketing in the accompanying consolidated statements of comprehensive loss. Contract Assets Subscription services revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract. A contract asset results when revenue recognition occurs in advance of billing the customer. Contract assets are included in Prepaid expenses and other current assets in our consolidated balance sheets. The total value of our contract assets was $1.3 million as of January 31, 2023 and 2022. |
Cost of Revenue | Cost of Revenue Cost of subscription revenue primarily consists of costs relating to the hosting of our cloud-based software platform, including salaries and benefits of technical operations and support personnel, data communications costs, allocated overhead and property and equipment depreciation, amortization of internal-use software and purchased intangibles and the reduction in the carrying amount of ROU assets. Cost of professional services revenue primarily consists of the costs of delivering implementation services to customers of our cloud-based software platform, including salaries and benefits of professional services personnel and fees for third-party resources used in the delivery of implementation services. |
Advertising Expense | Advertising ExpenseAdvertising costs are expensed as incurred. |
Concentrations of Credit Risk and Significant Clients and Suppliers | Concentrations of Credit Risk and Significant Clients and SuppliersOur financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. We deposit our cash and short-term investments primarily with one financial institution and, accordingly, such deposits regularly exceed federally insured limits. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original or remaining maturities of three months or less on the purchase date to be cash equivalents. Cash and cash equivalents carrying value approximate fair value and consist primarily of bank deposits and money market funds. |
Short-term Investments | Short-term Investments We typically invest in high quality, investment grade securities from diverse issuers. We classify our short-term investments as available-for-sale. In general, these investments are free of trading restrictions. We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive loss, which is reflected as a separate component of stockholders’ equity in our consolidated balance sheets. Gains and losses are recognized when realized in our consolidated statements of comprehensive loss. When we have determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in income. Gains and losses are determined using the specific identification method. We review our debt securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. We consider factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and our intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s amortized cost basis. If we believe that an other-than-temporary decline exists in one of these securities, we will write down these investments to fair value. The portion of the write-down related to credit loss would be recorded to Interest and other income (expense), net in our consolidated statements of comprehensive loss. Any portion not related to credit loss would be recorded to accumulated other comprehensive loss, which is reflected as a separate component of stockholders' equity in our consolidated balance sheets. |
Accounts Receivable | Accounts ReceivableOur accounts receivable consists of client obligations due under normal trade terms, and are reported at the principal amount outstanding, net of the allowance for credit losses. We maintain an allowance for credit losses that is based upon historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss related to certain accounts with high collection risk. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, generally three |
Acquisitions | Acquisitions We assess acquisitions under ASC Topic 805, Business Combinations (ASC 805) to determine whether a transaction represents the acquisition of assets or a business combination. Under this guidance, we apply a two-step model. The first step involves a screening test where we evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in either a single asset or a group of similar assets. If the screening test is met, we account for the set as an asset acquisition. If the screening test is not met, we apply the second step of the model to determine if the set meets the definition of a business based on the guidance in ASC 805. If the second step is met, the transaction is treated as a business combination. If the second step is not met, it is treated as an asset acquisition. |
Goodwill | Goodwill. Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on December 1, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. We have the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. |
Acquired Intangible Assets | Acquired Intangible Assets . Acquired intangible assets consist of developed technology, customer relationships, and trade names, resulting from Zuora’s acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives on a straight-line basis. |
Internal-Use Software and Web Site Development Costs | Internal-Use Software and Web Site Development Costs. We capitalize costs related to developing our suite of software solutions and our website when it is probable the expenditures will result in significant new functionality. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalized costs are recorded as part of property and equipment, net in our consolidated balance sheets. Maintenance and training costs are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. The carrying amounts of long-lived assets, including property and equipment, capitalized internal-use software, acquired intangible assets, deferred commissions, and ROU assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to future undiscounted net cash flows the asset is expected to generate over its remaining life. If the asset is determined to be impaired, the amount of any impairment recognized is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. |
Income Taxes | Income Taxes We use the asset-and-liability method of accounting for income taxes. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. In assessing the need for a valuation allowance, we have considered our historical levels of income, expectations of future taxable income and ongoing tax planning strategies. Because of the uncertainty of the realization of the deferred tax assets in the U.S., we have recorded a full valuation allowance against our deferred tax assets. Realization of our deferred tax assets is dependent primarily upon future U.S. taxable income. We recognize and measure tax benefits from uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Significant judgment is required to evaluate uncertain tax positions. Although we believe that we have adequately reserved for our uncertain tax positions, it can provide no assurance that the final tax outcome of these matters will not be materially different. We evaluate our uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. The provision for income taxes includes the effects of any accruals that we believe are appropriate, as well as the related net interest and penalties. |
Stock-Based Compensation | Stock-Based Compensation We measure our employee and director stock-based compensation awards, including purchase rights issued under the ESPP, based on the award's estimated fair value on the date of grant. We estimate the fair value of stock options, and purchase rights under the ESPP, using the Black-Scholes option-pricing model. The fair value of restricted stock units (RSUs) and PSUs is equal to the fair value of our common stock on the date of grant. Expense associated with our equity awards is recognized net of estimated forfeitures in our consolidated statements of comprehensive loss using the straight-line attribution method over the requisite service period for stock options and RSUs; over the period we expect the service and performance conditions under the award will be achieved for PSUs; and over the offering period for the purchase rights issued under the ESPP. Estimated forfeitures are based upon our historical experience and we revise our estimates, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. For PSUs, we evaluate the vesting conditions on an ongoing basis and stop recognizing expense when we deem the PSU is no longer probable of vesting. If we deem the PSU to be improbable of vesting, we record an adjustment to reverse all previously recognized expense associated with the PSU in the current period. Stock options generally vest over four years and have a contractual term of ten years. ESPP purchase rights vest over the two year offering period. RSUs generally vest over three one Determining the grant date fair value of options, RSUs, and PSUs requires management to make assumptions and judgments. These estimates involve inherent uncertainties and if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded. The assumptions and estimates for valuing stock options are as follows: • Fair value per share of Company’s common stock. We use the publicly quoted price of our common stock as reported on the New York Stock Exchange as the fair value of our common stock. • Expected volatility. We determine the expected volatility based on historical average volatilities of similar publicly traded companies corresponding to the expected term of the awards. • Expected term. We determine the expected term of awards which contain only service conditions using the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award, as we do not have sufficient historical data relating to stock-option exercises. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect during the period the options were granted corresponding to the expected term of the awards. • Estimated dividend yield. The estimated dividend yield is zero, as we do not currently intend to declare dividends in the foreseeable future. |
Net Loss per Share and Earnings per Share | Net Loss per ShareBasic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Options subject to early exercise that are exercised prior to vesting are excluded from the computation of weighted-average number of shares of common stock outstanding until such shares have vested. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period increased by giving effect to all potentially dilutive securities to the extent they are dilutive. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements). For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. |
Leases | Leases We determine if a contract is a lease or contains a lease at the inception of the contract and reassess that conclusion if the contract is modified. All leases are assessed for classification as an operating lease or a finance lease. Operating lease right-of-use (ROU) assets are presented separately in our consolidated balance sheets. Operating lease liabilities are also presented separately as current and non-current liabilities in our consolidated balance sheets. We do not have any finance lease ROU assets or liabilities. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We do not obtain and control our right to use the identified asset until the lease commencement date. Our lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. When the rate implicit in the lease is not readily determinable, we use the incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date and factors in a hypothetical interest rate on a collateralized basis with similar terms, payments and economic environments. Our ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement, minus any lease incentives received, and any direct costs incurred by the lessee. Any variable lease payments are expensed as incurred and do not factor into the measurement of the applicable ROU asset or lease liability. The term of our leases equals the non-cancellable period of the lease, including any rent-free periods provided by the lessor, and also includes options to renew or extend the lease (including by not terminating the lease) that we are reasonably certain to exercise. We establish the term of each lease at lease commencement and reassess that term in subsequent periods when one of the triggering events outlined in Topic 842 occurs. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. Our lease contracts often include lease and non-lease components. We have elected the practical expedient offered by the standard to not separate lease from non-lease components for our facilities leases and account for them as a single lease component. We have elected not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for these short-term leases is recognized on a straight-line basis over the lease term. |
Derivative Financial Instruments | Derivative Financial Instruments The accounting treatment of derivative financial instruments requires that we record certain embedded features and warrants as assets or liabilities at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date with any change in fair value recorded as income or expense. In connection with our issuance of the Initial Notes to Silver Lake on March 24, 2022 as described in Note 9. Debt and Note 17. Warrants to Purchase Shares of Common Stock |
Deferred Debt Issuance Costs | Deferred Debt Issuance CostsCosts directly associated with obtaining debt financing are deferred and amortized using the effective interest rate method over the expected term of the related debt agreement. We determine the expected term of debt agreements by assessing the contractual term of the debt as well as any non-contingent put rights provided to the lenders. Unamortized amounts related to long-term debt are reflected on the consolidated balance sheets as a direct deduction from the carrying amounts of the related long-term debt liability. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements—Adopted in Fiscal 2023 In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models previously required under U.S. GAAP, including the beneficial conversion feature and cash conversion models. This ASU also simplifies the diluted earnings per share calculation in certain areas. The standard was effective for us beginning February 1, 2022 and we utilized the modified retrospective transition method of adoption. The adoption of this standard had no impact on our retained earnings or other components of equity as of the February 1, 2022 adoption date and had no impact to our earnings per share during the period of adoption. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. We retroactively adopted this standard as of February 1, 2022. The adoption of this standard on February 1, 2022 had no impact on our condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Credit Losses | The allowance for credit losses consists of the following activity (in thousands): Fiscal Year Ended January 31, 2023 2022 Allowance for credit losses, beginning balance $ 3,188 $ 4,522 Additions: Charged to revenue 2,245 2,919 Charged to deferred revenue 1,818 1,801 Deductions: Write-offs to revenue (2,201) (3,423) Write-offs to deferred revenue (1,049) (2,631) Allowance for credit losses, ending balance $ 4,001 $ 3,188 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Unrealized Gains and Losses, and Estimated Fair Value of Short-term Investments | The amortized costs, unrealized gains and losses and estimated fair values of our short-term investments were as follows (in thousands): January 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 34,865 $ — $ (377) $ 34,488 Corporate bonds 41,974 — (189) 41,785 Commercial paper 102,720 — — 102,720 Foreign government securities 4,023 — (10) 4,013 Total short-term investments $ 183,582 $ — $ (576) $ 183,006 January 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 18,082 $ — $ (155) $ 17,927 Corporate bonds 21,225 — (49) 21,176 Commercial paper 55,234 — — 55,234 Supranational bonds 3,503 — — 3,503 Foreign government securities 4,064 — (22) 4,042 Total short-term investments $ 102,108 $ — $ (226) $ 101,882 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Hierarchy for Financial Assets Measured on a Recurring Basis | The following tables summarize our fair value hierarchy for our financial assets measured at fair value on a recurring basis (in thousands): January 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 184,580 $ — $ — $ 184,580 Short-term investments: U.S. government securities $ — $ 34,488 $ — $ 34,488 Corporate bonds — 41,785 — 41,785 Commercial paper — 102,720 — 102,720 Foreign government securities — 4,013 — 4,013 Total short-term investments $ — $ 183,006 $ — $ 183,006 Liabilities: Warrant liability $ — $ — $ 2,829 $ 2,829 January 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 92,668 $ — $ — $ 92,668 Short-term investments: U.S. government securities $ — $ 17,927 $ — $ 17,927 Corporate bonds — 21,176 — 21,176 Commercial paper — 55,234 — 55,234 Supranational bonds — 3,503 — 3,503 Foreign government securities — 4,042 — 4,042 Total short-term investments $ — $ 101,882 $ — $ 101,882 |
Schedule of Changes in Level 3 Fair Value Measurements | Changes in our Level 3 fair value measurements were as follows (in thousands): Warrant Liability Balance, January 31, 2022 $ — Issuances 12,043 Gain on change in fair value (9,214) Balance, January 31, 2023 $ 2,829 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): January 31, 2023 2022 Prepaid software subscriptions $ 7,533 $ 6,854 Taxes 3,860 1,270 Prepaid insurance 3,225 3,220 Insurance payments receivable 2,000 — Contract assets 1,325 1,289 Deposits 1,168 250 Prepaid hosting costs 871 767 Other 4,303 1,953 Total $ 24,285 $ 15,603 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): January 31, 2023 2022 Software $ 32,778 $ 25,495 Leasehold improvements 1 15,254 17,277 Computer equipment 11,780 14,746 Furniture and fixtures 1 3,793 4,424 63,605 61,942 Less: accumulated depreciation and amortization (36,446) (34,266) Total $ 27,159 $ 27,676 _________________________________ (1) The cost basis of leasehold improvements and furniture and fixtures was reduced to reflect impairments of $1.1 million and $0.1 million, respectively, recorded during the fiscal year ended January 31, 2023. For more information, refer to Note 12. Leases . The following table summarizes the capitalized internal-use software costs included within the Software line item in the table above (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Internal-use software costs capitalized during the period $ 7,066 $ 5,785 $ 4,235 January 31, 2023 2022 Total capitalized internal-use software, net of accumulated amortization $ 14,138 $ 11,534 The following table summarizes total depreciation and amortization expense related to property and equipment, including amortization of internal-use software, included primarily in Cost of subscription revenue and General and administrative in the accompanying consolidated statements of comprehensive loss (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Total depreciation and amortization expense $ 9,668 $ 11,430 $ 10,571 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Purchased Intangible Assets | The following table summarizes the purchased intangible asset balances (in thousands): January 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 19,571 $ (9,194) $ 10,377 Customer relationships 5,187 (3,225) 1,962 Trade names 1,709 (847) 862 Total $ 26,467 $ (13,266) $ 13,201 January 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 9,271 $ (7,692) $ 1,579 Customer relationships 4,287 (2,717) 1,570 Trade names 909 (606) 303 Total $ 14,467 $ (11,015) $ 3,452 |
Schedule of Amortization Expense Related to Purchased Intangible Assets | The following table summarizes amortization expense recognized on purchased intangible assets during the periods indicated (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Purchased intangible assets amortization expense $ 2,251 $ 2,050 $ 1,692 |
Schedule of Expected Future Amortization Expense for Intangible Assets | Estimated future amortization expense for purchased intangible assets as of January 31, 2023 was as follows (in thousands): Fiscal 2024 $ 2,953 Fiscal 2025 2,509 Fiscal 2026 1,874 Fiscal 2027 1,561 Fiscal 2028 1,561 Thereafter 2,743 $ 13,201 |
Schedule of Carrying Amount of Goodwill | The following table represents the changes to goodwill (in thousands): Goodwill Balance, January 31, 2022 $ 17,632 Addition from acquisition 35,009 Effects of foreign currency translation 1,350 Balance, January 31, 2023 $ 53,991 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): January 31, 2023 2022 Litigation settlement $ 75,000 $ — Accrued contingent consideration 4,420 — Accrued hosting and third-party licenses 4,374 3,865 Accrued taxes 4,088 2,422 Accrued outside services and consulting 3,507 3,712 Warrant liability 2,829 — Accrued interest 850 3 Other accrued expenses 8,610 4,223 Total $ 103,678 $ 14,225 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carry Value of Long-term Debt | The carrying value of the Initial Notes was classified as long-term and consisted of the following (in thousands): January 31, 2023 Initial Notes principal $ 250,000 Unamortized debt discount (39,597) Carrying value $ 210,403 |
Schedule of Interest Expense | Interest expense related to the Initial Notes, included in Interest expense in the accompanying audited condensed consolidated statements of comprehensive loss, was as follows (in thousands): Fiscal Year Ended January 31, 2023 Contractual interest expense $ 8,421 Amortization of debt discount 6,644 Total interest expense $ 15,065 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Recognized that was Previously Included In Deferred Revenue | The following table summarizes revenue recognized during the period that was included in the deferred revenue balance at the beginning of each respective period (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Revenue recognized from deferred revenue $ 147,036 $ 126,245 $ 107,091 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Country Based on Customer Address at Time of Sale | Revenue by country, based on the customer’s address at the time of sale, was as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 United States $ 257,653 $ 218,502 $ 200,273 Others 138,434 128,236 105,147 Total $ 396,087 $ 346,738 $ 305,420 Percentage of revenue by country: United States 65 % 63 % 66 % Other 35 % 37 % 34 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Leases and Lease Costs | The components of our long-term operating leases and related operating lease cost were as follows (in thousands): January 31, 2023 2022 Operating lease right-of-use assets $ 22,768 $ 32,643 Operating lease liabilities, current portion $ 9,240 $ 11,462 Operating lease liabilities, net of current portion 37,924 45,633 Total operating lease liabilities $ 47,164 $ 57,095 Fiscal Year Ended January 31, 2023 2022 2021 Operating lease cost 1 $ 9,933 $ 12,681 $ 11,933 _________________________________ (1) Includes costs related to our short-term operating leases and is net of sublease income as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Short-term operating lease cost $ 483 $ 402 $ 193 Sublease income $ (98) $ — $ — |
Schedule of Maturities of Operating Lease Liabilities | The future maturities of long-term operating lease liabilities for each fiscal year were as follows (in thousands): Maturities of Operating Lease Liabilities 2024 $ 11,288 2025 6,874 2026 6,493 2027 6,705 2028 6,800 Thereafter 17,412 Total lease payments 55,572 Less imputed interest (8,408) Present value of lease liabilities $ 47,164 |
Schedule of Supplemental Operating Lease Information | Other supplemental information related to our long-term operating leases includes the following (dollars in thousands): January 31, 2023 2022 Weighted-average remaining operating lease term 6.7 years 7.0 years Weighted-average operating lease discount rate 4.8 % 4.6 % Fiscal Year Ended January 31, 2023 2022 2021 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ 12,802 $ 13,701 $ 9,693 Operating cash flows resulting from operating leases $ 12,802 $ 13,701 $ 9,693 New right-of-use assets obtained in exchange for lease liabilities: Operating leases obtained $ 799 $ 5,040 $ 1,064 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Net Loss Before Provision for Income Taxes | Net loss before provision for income taxes consisted of the following (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Domestic $ (193,031) $ (101,626) $ (77,140) Foreign 5,643 3,628 5,839 Loss before income taxes $ (187,388) $ (97,998) $ (71,301) |
Schedule of Components of Income Tax Provision | The components of our income tax provision are as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Current: Federal $ — $ — $ — State 189 163 46 International 10,332 799 1,480 $ 10,521 $ 962 $ 1,526 Deferred: Federal $ — $ — $ — State — — — International 61 465 347 Income tax provision $ 10,582 $ 1,427 $ 1,873 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. federal statutory tax rate to our provision for income tax is as follows (dollars in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Federal income tax benefit at statutory rates $ (39,351) $ (20,580) $ (14,973) State income taxes, net of effect of federal (5,312) (3,466) (2,072) Permanent differences 450 772 718 Warrant adjustment (1,935) — — Federal and state R&D credits (6,144) (11,263) (1,325) Impact from international operations 9,230 502 600 Stock-based compensation 7,772 (3,427) 1,250 Tax effects of intercompany transactions (7,204) — — Other 312 (1,174) 2,435 Change in valuation allowance 52,764 40,063 15,240 Income tax provision $ 10,582 $ 1,427 $ 1,873 |
Schedule of Deferred Tax Assets and Liabilities | Our deferred income tax assets and liabilities consisted of the following (in thousands): January 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 139,298 $ 133,994 Tax credit carryforwards 27,256 21,112 Allowances and other 34,884 14,220 Intangibles/Goodwill 3,684 — Depreciation and amortization 1,949 2,771 Operating lease liability 11,314 13,894 R&D Capitalization 21,040 — Total deferred tax assets $ 239,425 $ 185,991 Deferred tax liabilities: Deferred commissions $ (11,938) $ (10,949) Intangibles — (3,253) Operating lease right-of-use asset (5,368) (8,001) Total deferred tax liabilities (17,306) (22,203) Valuation allowance (224,648) (166,212) Net deferred tax liabilities $ (2,529) $ (2,424) |
Schedule of Uncertain Tax Position | A reconciliation of the beginning and ending amounts of uncertain tax position is as follows (in thousands): Fiscal Year Ended January 31, 2023 2022 2021 Gross amount of unrecognized tax benefits as of the beginning of the period $ 10,228 $ 9,385 $ 8,070 Increase for tax positions related to prior years — 1,135 — Decrease for tax positions related to prior years (124) (2,895) (5) Increase for tax positions related to the current year 8,247 2,603 1,320 Gross amount of unrecognized tax benefits as of the end of the period $ 18,351 $ 10,228 $ 9,385 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Loss | Components of accumulated other comprehensive loss were as follows (in thousands): Foreign Currency Translation Adjustment Unrealized Loss on Available-for-Sale Securities Total Balance, January 31, 2022 $ 118 $ (226) $ (108) Foreign currency translation adjustment (461) — (461) Unrealized loss on available-for-sale securities — (350) (350) Balance, January 31, 2023 $ (343) $ (576) $ (919) |
Employee Stock Plans (Tables)
Employee Stock Plans (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity and related information (in thousands, except weighted-average exercise price, weighted-average grant date fair value and average remaining contractual term): Shares Weighted Average Aggregate Balance as of January 31, 2022 8,560 $ 9.22 5.9 $ 67,259 Granted 20 12.52 Exercised (477) 5.12 Forfeited (342) 13.62 Balance as of January 31, 2023 7,761 9.28 5.0 14,505 Exercisable as of January 31, 2023 3,198 3.38 2.5 14,505 Vested and expected to vest as of January 31, 2023 7,660 $ 9.22 4.9 $ 14,505 |
Schedule of Stock Option Grant Date Fair Value and Intrinsic Value of Options Exercised | Fiscal Year Ended January 31, 2023 2022 2021 Weighted-average grant date fair value per share of options granted during each respective period $ 5.54 $ 6.54 $ 4.69 Aggregate intrinsic value of options exercised during each respective period $ 2,600 $ 32,179 $ 22,677 |
Schedule of Valuation Assumptions for Estimated Fair Value of Stock Options | We used the Black-Scholes option-pricing model to estimate the fair value of our stock options granted during each respective period using the following assumptions: Fiscal Year Ended January 31, 2023 2022 2021 Fair value of common stock $ 12.52 $15.64 - $15.87 $9.99 - $14.75 Expected volatility 42.6 % 42.3% - 42.7% 41.4% - 42.4% Expected term (in years) 5.8 6.0 - 6.1 6.0 - 6.1 Risk-free interest rate 3.0 % 1.0% - 1.1% 0.4% - 0.6% Expected dividend yield — — — |
Schedule of RSU Activity | The following table summarizes RSU activity and related information (in thousands except weighted-average grant date fair value): Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Balance as of January 31, 2022 12,171 $ 15.46 Granted 9,292 11.46 Vested (5,795) 15.02 Forfeited (3,164) 14.35 Balance as of January 31, 2023 12,504 $ 12.98 |
Schedule of PSU Activity | The following table summarizes PSU activity and related information (in thousands, except weighted-average grant date fair value): Number of PSUs Outstanding Weighted-Average Grant Date Fair Value Balance as of January 31, 2022 — $ — Granted 2,905 15.21 Vested — — Forfeited — — Balance as of January 31, 2023 2,905 $ 15.21 |
Schedule of Valuation Assumptions for Estimated Fair Value of Employee Stock Purchase Plan | We estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended January 31, 2023 2022 2021 Fair value of common stock $6.15 - $8.91 $16.07 - $19.82 $12.15 - $13.50 Expected volatility 42.4% - 52.3% 34.4% - 53.2% 43.6% - 69.1% Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Risk-free interest rate 2.3% - 4.7% 0.1% - 0.7% 0.1% - 0.2% Expected dividend yield — — — |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense was recorded in the following cost and expense categories in the accompanying consolidated statements of comprehensive loss (in thousands): January 31, 2023 2022 2021 Cost of subscription revenue $ 8,141 $ 5,875 $ 4,849 Cost of professional services revenue 12,297 10,274 9,952 Research and development 25,819 21,072 19,562 Sales and marketing 33,075 22,484 15,839 General and administrative 17,069 12,365 9,081 Total stock-based compensation expense $ 96,401 $ 72,070 $ 59,283 |
Schedule of Unrecognized Compensation Costs Related to Unvested Equity Awards | As of January 31, 2023, unrecognized compensation costs related to unvested equity awards and the weighted-average remaining period over which those costs are expected to be realized were as follows (dollars in thousands): Stock Options RSUs PSUs ESPP Unrecognized compensation costs $ 5,604 $ 131,879 $ 44,185 $ 9,406 Weighted-average remaining recognition period 1.6 years 2.1 years 2.2 years 1.2 years |
Warrants to Purchase Shares o_2
Warrants to Purchase Shares of Common Stock (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The Warrants were measured using the Black-Scholes option pricing model at the issuance date (Initial Closing Date) and the Warrant liability was remeasured using the same model as of January 31, 2023 using the following inputs: January 31, 2023 March 24, 2022 Fair value of common stock 1 $ 7.24 $ 13.77 Exercise price² $22.00 - $24.00 $22.00 - $24.00 Expected volatility 41.2 % 41.9 % Expected term (in years) 6.2 7.0 Risk-free interest rate 3.6 % 2.4 % Expected dividend yield — — ______________ (1) The fair value of common stock was adjusted to reflect certain restrictions on the Warrants for 18 months following the issuance date. (2) The range of exercise prices reflects the Warrants that were liability-classified. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Fiscal Year Ended January 31, 2023 2022 2021 Numerator: Net loss $ (197,970) $ (99,425) $ (73,174) Denominator: Weighted-average common shares outstanding, basic and diluted 131,441 124,206 117,598 Net loss per share, basic and diluted $ (1.51) $ (0.80) $ (0.62) |
Schedule of Potentially Dilutive Securities Not Included in the Diluted Per Share Calculations | Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in thousands): As of January 31, 2023 2022 2021 Unvested RSUs issued and outstanding 12,504 12,171 8,278 Initial Notes conversion 12,500 — — Issued and outstanding stock options 7,761 8,560 11,812 Warrants 7,500 — — Unvested PSUs issued and outstanding 2,905 — — Shares committed under ESPP 316 144 139 Total 43,486 20,875 20,229 |
Zephr Acquisition (Tables)
Zephr Acquisition (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimate of the fair value of the assets acquired and liabilities assumed as of September 2, 2022 (in thousands): Total Cash $ 2,103 Accounts receivable 641 Prepaid expenses and other current assets 916 Fixed Assets 120 Intangible assets: Tradename 800 Developed technology 10,300 Customer relationships 900 Goodwill 35,009 Accounts payable (292) Accrued liabilities (303) Other current liabilities (225) Deferred revenue (2,056) Fair value of net assets acquired $ 47,913 |
Schedule of Acquired Identifiable Intangible Assets | The following table summarizes the acquired identifiable intangible assets, Acquisition Closing Date estimated fair values, and estimated useful lives (dollars in thousands): Fair Value Useful Life Trade name $ 800 3.0 years Developed technology 10,300 7.0 years Customer relationships 900 10.0 years Total intangible assets acquired $ 12,000 |
Overview and Basis of Present_2
Overview and Basis of Presentation (Details) | 12 Months Ended |
Jan. 31, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Narrative (Details) | 12 Months Ended | ||
Jan. 31, 2023 USD ($) sublease | Jan. 31, 2022 USD ($) | Jan. 31, 2021 USD ($) | |
Accounting Policies [Line Items] | |||
Revenue | $ 396,087,000 | $ 346,738,000 | $ 305,420,000 |
Incremental commission costs to obtain contract, amortization period (in years) | 5 years | ||
Contract assets | $ 1,300,000 | 1,300,000 | |
Goodwill impairment charges | 0 | 0 | 0 |
Asset impairment charges | $ 4,537,000 | $ 12,783,000 | $ 0 |
ESPP offering period (in years) | 2 years | ||
Number of sublease | sublease | 1 | ||
Amortization of debt discount | $ 6,600,000 | ||
Stock options | |||
Accounting Policies [Line Items] | |||
Vesting period (in years) | 4 years | ||
Contractual terms (in years) | 10 years | ||
Expected dividend yield (percent) | 0% | 0% | 0% |
Internal-use software | |||
Accounting Policies [Line Items] | |||
Property and equipment estimated useful life (in years) | 3 years | ||
Minimum | |||
Accounting Policies [Line Items] | |||
Subscription agreements term (in years) | 1 year | ||
Professional services projects term to completion (in months) | 3 months | ||
Property and equipment estimated useful life (in years) | 3 years | ||
Minimum | PSU | |||
Accounting Policies [Line Items] | |||
Vesting period (in years) | 1 year | ||
Minimum | RSUs | |||
Accounting Policies [Line Items] | |||
Vesting period (in years) | 3 years | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Subscription agreements term (in years) | 3 years | ||
Professional services projects term to completion (in months) | 12 months | ||
Property and equipment estimated useful life (in years) | 5 years | ||
Maximum | PSU | |||
Accounting Policies [Line Items] | |||
Vesting period (in years) | 3 years | ||
Maximum | RSUs | |||
Accounting Policies [Line Items] | |||
Vesting period (in years) | 4 years | ||
Subscription | |||
Accounting Policies [Line Items] | |||
Revenue | $ 338,391,000 | $ 287,747,000 | $ 242,340,000 |
Professional services | |||
Accounting Policies [Line Items] | |||
Revenue | $ 57,696,000 | $ 58,991,000 | $ 63,080,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | $ 3,188 | $ 4,522 |
Charged to revenue | 2,245 | 2,919 |
Charged to deferred revenue | 1,818 | 1,801 |
Write-offs to revenue | (2,201) | (3,423) |
Write-offs to deferred revenue | (1,049) | (2,631) |
Allowance for credit losses, ending balance | $ 4,001 | $ 3,188 |
Investments - Amortized Cost to
Investments - Amortized Cost to Fair Value (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 183,582 | $ 102,108 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (576) | (226) |
Fair Value | 183,006 | 101,882 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 34,865 | 18,082 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (377) | (155) |
Fair Value | 34,488 | 17,927 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 41,974 | 21,225 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (189) | (49) |
Fair Value | 41,785 | 21,176 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 102,720 | 55,234 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 102,720 | 55,234 |
Supranational bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,503 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 3,503 | |
Foreign government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,023 | 4,064 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (10) | (22) |
Fair Value | $ 4,013 | $ 4,042 |
Investments - Narrative (Detail
Investments - Narrative (Details) | Jan. 31, 2023 |
Maximum | |
Debt Securities, Available-for-sale [Line Items] | |
Securities stated effective maturities (in years) | 1 year |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy for Financial Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Short-term investments: | ||
Short-term investments | $ 183,006 | $ 101,882 |
U.S. government securities | ||
Short-term investments: | ||
Short-term investments | 34,488 | 17,927 |
Corporate bonds | ||
Short-term investments: | ||
Short-term investments | 41,785 | 21,176 |
Commercial paper | ||
Short-term investments: | ||
Short-term investments | 102,720 | 55,234 |
Supranational bonds | ||
Short-term investments: | ||
Short-term investments | 3,503 | |
Foreign government securities | ||
Short-term investments: | ||
Short-term investments | 4,013 | 4,042 |
Recurring | ||
Short-term investments: | ||
Short-term investments | 183,006 | 101,882 |
Recurring | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 184,580 | 92,668 |
Recurring | U.S. government securities | ||
Short-term investments: | ||
Short-term investments | 34,488 | 17,927 |
Recurring | Corporate bonds | ||
Short-term investments: | ||
Short-term investments | 41,785 | 21,176 |
Recurring | Commercial paper | ||
Short-term investments: | ||
Short-term investments | 102,720 | 55,234 |
Recurring | Supranational bonds | ||
Short-term investments: | ||
Short-term investments | 3,503 | |
Recurring | Foreign government securities | ||
Short-term investments: | ||
Short-term investments | 4,013 | 4,042 |
Recurring | Warrants | ||
Liabilities: | ||
Warrant liability | 2,829 | |
Recurring | Level 1 | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 184,580 | 92,668 |
Recurring | Level 1 | U.S. government securities | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | Corporate bonds | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | Commercial paper | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | Supranational bonds | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 1 | Foreign government securities | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | Warrants | ||
Liabilities: | ||
Warrant liability | 0 | |
Recurring | Level 2 | ||
Short-term investments: | ||
Short-term investments | 183,006 | 101,882 |
Recurring | Level 2 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Recurring | Level 2 | U.S. government securities | ||
Short-term investments: | ||
Short-term investments | 34,488 | 17,927 |
Recurring | Level 2 | Corporate bonds | ||
Short-term investments: | ||
Short-term investments | 41,785 | 21,176 |
Recurring | Level 2 | Commercial paper | ||
Short-term investments: | ||
Short-term investments | 102,720 | 55,234 |
Recurring | Level 2 | Supranational bonds | ||
Short-term investments: | ||
Short-term investments | 3,503 | |
Recurring | Level 2 | Foreign government securities | ||
Short-term investments: | ||
Short-term investments | 4,013 | 4,042 |
Recurring | Level 2 | Warrants | ||
Liabilities: | ||
Warrant liability | 0 | |
Recurring | Level 3 | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Recurring | Level 3 | U.S. government securities | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 3 | Corporate bonds | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 3 | Commercial paper | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 3 | Supranational bonds | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 3 | Foreign government securities | ||
Short-term investments: | ||
Short-term investments | 0 | $ 0 |
Recurring | Level 3 | Warrants | ||
Liabilities: | ||
Warrant liability | $ 2,829 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Fair Value Measurements (Details) - Warrants $ in Thousands | 12 Months Ended |
Jan. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Issuances | 12,043 |
Gain on change in fair value | (9,214) |
Ending balance | $ 2,829 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Assets Measured on Recurring Basis | |||
Debt, net of current portion | $ 210,403,000 | $ 0 | |
Convertible debt | 147,800,000 | ||
Asset impairment | 4,537,000 | $ 12,783,000 | $ 0 |
Initial Notes | Convertible senior notes | |||
Assets Measured on Recurring Basis | |||
Balance on term loan | $ 210,403,000 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid software subscriptions | $ 7,533 | $ 6,854 |
Taxes | 3,860 | 1,270 |
Prepaid insurance | 3,225 | 3,220 |
Insurance payments receivable | 2,000 | 0 |
Contract assets | 1,325 | 1,289 |
Deposits | 1,168 | 250 |
Prepaid hosting costs | 871 | 767 |
Other | 4,303 | 1,953 |
Total | $ 24,285 | $ 15,603 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 63,605 | $ 61,942 |
Less: accumulated depreciation and amortization | (36,446) | (34,266) |
Total | 27,159 | 27,676 |
Impairment of leasehold improvements | 1,100 | 2,200 |
Impairment of furniture and fixtures | 100 | 800 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 32,778 | 25,495 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,254 | 17,277 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,780 | 14,746 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,793 | $ 4,424 |
Property and Equipment, Net - C
Property and Equipment, Net - Capitalized Internal-use Software Costs (Details) - Internal-use software - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Internal-use software costs capitalized during the period | $ 7,066 | $ 5,785 | $ 4,235 |
Total capitalized internal-use software, net of accumulated amortization | $ 14,138 | $ 11,534 |
Property and Equipment, Net - D
Property and Equipment, Net - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Total depreciation and amortization expense | $ 9,668 | $ 11,430 | $ 10,571 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Summary of Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 26,467 | $ 14,467 |
Accumulated Amortization | (13,266) | (11,015) |
Net Carrying Amount | 13,201 | 3,452 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 19,571 | 9,271 |
Accumulated Amortization | (9,194) | (7,692) |
Net Carrying Amount | 10,377 | 1,579 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,187 | 4,287 |
Accumulated Amortization | (3,225) | (2,717) |
Net Carrying Amount | 1,962 | 1,570 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,709 | 909 |
Accumulated Amortization | (847) | (606) |
Net Carrying Amount | $ 862 | $ 303 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Narrative (Details) | 12 Months Ended | |
Jan. 31, 2023 reportingUnit | Jan. 31, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Changes in carrying amount of goodwill | $ | $ 0 | |
Number of reporting units | reportingUnit | 1 | |
Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Purchased intangible assets amortization expense | $ 2,251 | $ 2,050 | $ 1,692 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Expected Future Amortization Expense | ||
Fiscal 2024 | $ 2,953 | |
Fiscal 2025 | 2,509 | |
Fiscal 2026 | 1,874 | |
Fiscal 2027 | 1,561 | |
Fiscal 2028 | 1,561 | |
Thereafter | 2,743 | |
Net Carrying Amount | $ 13,201 | $ 3,452 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Jan. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 17,632 |
Addition from acquisition | 35,009 |
Effects of foreign currency translation | 1,350 |
Ending balance | $ 53,991 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Payables and Accruals [Abstract] | ||
Litigation settlement | $ 75,000 | $ 0 |
Accrued contingent consideration | 4,420 | 0 |
Accrued hosting and third-party licenses | 4,374 | 3,865 |
Accrued taxes | 4,088 | 2,422 |
Accrued outside services and consulting | 3,507 | 3,712 |
Warrant liability | 2,829 | 0 |
Accrued interest | 850 | 3 |
Other accrued expenses | 8,610 | 4,223 |
Total | $ 103,678 | $ 14,225 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Millions, converted_share in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 24, 2022 USD ($) converted_share freestanding_instrument $ / shares shares | Jun. 30, 2017 USD ($) | Jul. 31, 2022 USD ($) | Jan. 31, 2023 USD ($) shares | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 8,100,000 | |||
Silicon Valley Bank Agreement | WSJ Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate, minus (percent) | 1% | |||
Silicon Valley Bank Agreement | Revolving loan | ||||
Debt Instrument [Line Items] | ||||
Credit facility maximum borrowing capacity | $ 30,000,000 | |||
Amount drawn under credit facility | $ 0 | |||
Silver Lake Warrants | ||||
Debt Instrument [Line Items] | ||||
Number of securities called by warrants (in shares) | shares | 7.5 | 7.5 | ||
Warrants term | 7 years | |||
Silver Lake Warrants | Warrants, tranche one | ||||
Debt Instrument [Line Items] | ||||
Number of securities called by warrants (in shares) | shares | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 20 | |||
Silver Lake Warrants | Warrants, tranche two | ||||
Debt Instrument [Line Items] | ||||
Number of securities called by warrants (in shares) | shares | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 22 | |||
Silver Lake Warrants | Warrants, tranche three | ||||
Debt Instrument [Line Items] | ||||
Number of securities called by warrants (in shares) | shares | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 24 | |||
Equity-classified warrants | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 700,000 | |||
Liability-classified warrants | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 300,000 | |||
Term loan | Silicon Valley Bank Agreement | ||||
Debt Instrument [Line Items] | ||||
Proceeds from term loan | $ 15,000,000 | |||
Balance on term loan | $ 400,000 | 1,500,000 | ||
Prepayment or termination fee (percent) | 1.50% | |||
Amount due per agreement upon prepayment or termination of facility | $ 225,000,000 | |||
2029 Notes | Convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Conversion percentage of par value | 98% | |||
Interest rate (percent) | 3.95% | |||
Optional in kind interest (percent) | 5.50% | |||
Number of freestanding instruments | freestanding_instrument | 3 | |||
Debt issuance costs | 7,100,000 | |||
Debt discount amortization period | 5 years | |||
Effective interest rate (percent) | 8.50% | |||
Initial Notes | Convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 250,000,000 | |||
Initial conversion rate | 50 | |||
Principal amount for conversion | $ 1,000 | |||
Price per share conversion (in dollars per share) | $ / shares | $ 20 | |||
Number of equity instruments upon conversion (in shares) | converted_share | 12.5 | |||
Balance on term loan | $ 210,403,000 | |||
Additional Notes | Convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 150,000,000 | |||
Period for issuance of additional notes | 18 months |
Debt - Balances (Details)
Debt - Balances (Details) - Initial Notes - Convertible senior notes $ in Thousands | Jan. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
Initial Notes principal | $ 250,000 |
Unamortized debt discount | (39,597) |
Carrying value | $ 210,403 |
Debt - Interest expense (Detail
Debt - Interest expense (Details) - Initial Notes - Convertible senior notes $ in Thousands | 12 Months Ended |
Jan. 31, 2023 USD ($) | |
Interest Expenses [Line Items] | |
Contractual interest expense | $ 8,421 |
Amortization of debt discount | 6,644 |
Total interest expense | $ 15,065 |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Deferred Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized from deferred revenue | $ 147,036 | $ 126,245 | $ 107,091 |
Deferred Revenue and Performa_4
Deferred Revenue and Performance Obligations - Performance Obligations (Details) $ in Millions | Jan. 31, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 500.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation (percent) | 59% |
Revenue, remaining performance obligation, period | 12 months |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 396,087 | $ 346,738 | $ 305,420 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 257,653 | 218,502 | 200,273 |
Others | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 138,434 | $ 128,236 | $ 105,147 |
Revenue | Geographic concentration | United States | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (percent) | 65% | 63% | 66% |
Revenue | Geographic concentration | Others | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (percent) | 35% | 37% | 34% |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended | ||
Jan. 31, 2023 USD ($) extension_option | Jan. 31, 2022 USD ($) | Jan. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Lessee, operating lease, lease not yet commenced, undiscounted amount | $ 3,400,000 | ||
Operating leases not yet commenced, lease term (in years) | 36 months | ||
Impairment expense | $ 4,537,000 | $ 12,783,000 | $ 0 |
Impairment of ROU assets | 3,300,000 | 9,800,000 | |
Impairment of leasehold improvements | 1,100,000 | 2,200,000 | |
Impairment of furniture and fixtures | $ 100,000 | $ 800,000 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Number of lease extension options | extension_option | 1 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Optional renewal term (in years) | 7 years |
Leases - Components of Leases a
Leases - Components of Leases and Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Operating Leases | |||
Operating lease right-of-use assets | $ 22,768 | $ 32,643 | |
Operating lease liabilities, current portion | 9,240 | 11,462 | |
Operating lease liabilities, net of current portion | 37,924 | 45,633 | |
Total operating lease liabilities | 47,164 | 57,095 | |
Lease Cost | |||
Operating lease cost | 9,933 | 12,681 | $ 11,933 |
Short-term operating lease cost | 483 | 402 | 193 |
Sublease income | $ (98) | $ 0 | $ 0 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Maturities of Operating Lease Liabilities | ||
2024 | $ 11,288 | |
2025 | 6,874 | |
2026 | 6,493 | |
2027 | 6,705 | |
2028 | 6,800 | |
Thereafter | 17,412 | |
Total lease payments | 55,572 | |
Less imputed interest | (8,408) | |
Present value of lease liabilities | $ 47,164 | $ 57,095 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Lease Term and Discount Rate | |||
Weighted-average remaining operating lease term | 6 years 8 months 12 days | 7 years | |
Weighted-average operating lease discount rate (percent) | 4.80% | 4.60% | |
Supplemental Cash Flow Information | |||
Cash paid for operating leases | $ 12,802 | $ 13,701 | $ 9,693 |
Operating cash flows resulting from operating leases | 12,802 | 13,701 | 9,693 |
Operating leases obtained | $ 799 | $ 5,040 | $ 1,064 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended | 2 Months Ended | ||||||||
Jul. 31, 2020 lawsuit | Jun. 30, 2020 lawsuit | Feb. 29, 2020 lawsuit | Sep. 30, 2019 lawsuit | Mar. 31, 2021 lawsuit | Jun. 30, 2020 lawsuit | May 31, 2020 lawsuit | Jan. 31, 2023 USD ($) vendor | Jan. 31, 2022 USD ($) | Jan. 31, 2021 USD ($) | |
Other Commitments [Line Items] | ||||||||||
Proposed settlement amount | $ | $ 75,000,000 | |||||||||
Loss contingency accrual | $ | 1,000,000 | |||||||||
Insurance Claims | ||||||||||
Other Commitments [Line Items] | ||||||||||
Proposed settlement amount | $ | 6,600,000 | |||||||||
Certain facility lease agreements | Irrevocable letters of credit | ||||||||||
Other Commitments [Line Items] | ||||||||||
Letters of credit available | $ | 4,500,000 | $ 4,500,000 | $ 4,700,000 | |||||||
Letters of credit outstanding | $ | 0 | $ 0 | ||||||||
Putative securities class action | ||||||||||
Other Commitments [Line Items] | ||||||||||
Number of lawsuits filed | 2 | |||||||||
Number of lawsuits consolidated | 2 | |||||||||
Stockholder derivative lawsuits, CA | ||||||||||
Other Commitments [Line Items] | ||||||||||
Number of lawsuits filed | 2 | |||||||||
Number of lawsuits consolidated | 2 | |||||||||
Stockholder derivative lawsuits, District of Delaware | ||||||||||
Other Commitments [Line Items] | ||||||||||
Number of lawsuits filed | 2 | |||||||||
Number of lawsuits consolidated | 2 | |||||||||
Stockholder derivative lawsuits, Delaware Chancery Court | ||||||||||
Other Commitments [Line Items] | ||||||||||
Number of lawsuits filed | 2 | |||||||||
Number of lawsuits consolidated | 2 | |||||||||
Cloud computing services | ||||||||||
Other Commitments [Line Items] | ||||||||||
Contractual obligation | $ | $ 31,500,000 | |||||||||
Number of vendors related to contractual obligation | vendor | 1 | |||||||||
Software | ||||||||||
Other Commitments [Line Items] | ||||||||||
Contractual obligation | $ | $ 2,800,000 |
Income Taxes - Net Loss Before
Income Taxes - Net Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Net loss before provision for income taxes | |||
Domestic | $ (193,031) | $ (101,626) | $ (77,140) |
Foreign | 5,643 | 3,628 | 5,839 |
Loss before income taxes | $ (187,388) | $ (97,998) | $ (71,301) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 189 | 163 | 46 |
International | 10,332 | 799 | 1,480 |
Current | 10,521 | 962 | 1,526 |
Deferred: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
International | 61 | 465 | 347 |
Income tax provision | $ 10,582 | $ 1,427 | $ 1,873 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Effective income tax rate reconciliation | |||
Federal income tax benefit at statutory rates | $ (39,351) | $ (20,580) | $ (14,973) |
State income taxes, net of effect of federal | (5,312) | (3,466) | (2,072) |
Permanent differences | 450 | 772 | 718 |
Warrant adjustment | (1,935) | 0 | 0 |
Federal and state R&D credits | (6,144) | (11,263) | (1,325) |
Impact from international operations | 9,230 | 502 | 600 |
Stock-based compensation | 7,772 | (3,427) | 1,250 |
Tax effects of intercompany transactions | (7,204) | 0 | 0 |
Other | 312 | (1,174) | 2,435 |
Change in valuation allowance | 52,764 | 40,063 | 15,240 |
Income tax provision | $ 10,582 | $ 1,427 | $ 1,873 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jan. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 139,298 | $ 133,994 |
Tax credit carryforwards | 27,256 | 21,112 |
Allowances and other | 34,884 | 14,220 |
Intangibles/Goodwill | 3,684 | 0 |
Depreciation and amortization | 1,949 | 2,771 |
Operating lease liability | 11,314 | 13,894 |
R&D Capitalization | 21,040 | 0 |
Total deferred tax assets | 239,425 | 185,991 |
Deferred tax liabilities: | ||
Deferred commissions | (11,938) | (10,949) |
Intangibles | 0 | (3,253) |
Operating lease right-of-use asset | (5,368) | (8,001) |
Total deferred tax liabilities | (17,306) | (22,203) |
Valuation allowance | (224,648) | (166,212) |
Net deferred tax liabilities | $ (2,529) | $ (2,424) |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Reconciliation of unrecognized tax benefits | |||
Gross amount of unrecognized tax benefits, beginning of period | $ 10,228 | $ 9,385 | $ 8,070 |
Increase for tax positions related to prior years | 0 | 1,135 | 0 |
Decrease for tax positions related to prior years | (124) | (2,895) | (5) |
Increase for tax positions related to the current year | 8,247 | 2,603 | 1,320 |
Gross amount of unrecognized tax benefits, end of period | $ 18,351 | $ 10,228 | $ 9,385 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2021 | Jan. 31, 2023 | Jan. 31, 2022 | Dec. 31, 2022 | Jan. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||||||
Increase in valuation allowance | $ 58,400 | $ 40,100 | |||||
Deferral of employer FICA taxes, CARES Act | $ 2,000 | $ 3,600 | |||||
Social security tax | $ 1,600 | ||||||
Gross unrecognized tax benefits | 18,351 | 10,228 | $ 9,385 | $ 8,070 | |||
Unrecognized tax benefits that would impact effective tax rate in a future period | 7,000 | ||||||
Tax-related interest and penalties recognized | 100 | 100 | |||||
Federal | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating loss carryforwards | 523,500 | 530,800 | |||||
Net operating loss carryforwards not subject to expiration | 296,900 | ||||||
Federal | Research and development | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Tax credits | 20,500 | 15,700 | |||||
State | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating loss carryforwards | 349,700 | 345,100 | |||||
State | Research and development | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Tax credits | $ 18,500 | $ 14,500 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 USD ($) vote $ / shares shares | Jan. 31, 2022 USD ($) $ / shares shares | Jan. 31, 2021 USD ($) | |
Class of Stock [Line Items] | |||
Preferred stock, authorized (in shares) | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||
Preferred stock, issued (in shares) | 0 | ||
Preferred stock, outstanding (in shares) | 0 | ||
Charitable donation of stock (in shares) | 101,317 | 61,012 | |
Donation of common stock to charitable foundation | $ | $ 1,000 | $ 1,000 | $ 1,000 |
Class A common stock | |||
Class of Stock [Line Items] | |||
Number of votes for each share of stock held (in votes) | vote | 1 | ||
Common stock authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Common stock issued (in shares) | 127,384,000 | 119,008,000 | |
Common stock outstanding (in shares) | 127,384,000 | 119,008,000 | |
Class B common stock | |||
Class of Stock [Line Items] | |||
Number of votes for each share of stock held (in votes) | vote | 10 | ||
Common stock authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Common stock issued (in shares) | 8,121,000 | 9,048,000 | |
Common stock outstanding (in shares) | 8,121,000 | 9,048,000 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 170,607 | $ 171,913 | $ 164,659 |
Foreign currency translation adjustment | (461) | (673) | 696 |
Unrealized loss on available-for-sale securities | (350) | (231) | (88) |
Ending balance | 97,160 | 170,607 | 171,913 |
AOCI | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (108) | 796 | 188 |
Ending balance | (919) | (108) | $ 796 |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 118 | ||
Foreign currency translation adjustment | (461) | ||
Ending balance | (343) | 118 | |
Unrealized Loss on Available-for-Sale Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (226) | ||
Unrealized loss on available-for-sale securities | (350) | ||
Ending balance | $ (576) | $ (226) |
Employee Stock Plans - Narrativ
Employee Stock Plans - Narrative (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2020 shares | Jan. 31, 2023 USD ($) purchase_period shares | Jan. 31, 2022 USD ($) | Jan. 31, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP offering period (in months) | 2 years | |||
Stock-based compensation expense | $ | $ 96,401 | $ 72,070 | $ 59,283 | |
2018 ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved and available for issuance (in shares) | 4,200 | |||
ESPP offering period (in months) | 24 months | |||
Number of purchase periods during offering period | purchase_period | 4 | |||
Term of purchase period (in months) | 6 months | |||
Purchase price, percentage of fair market value | 85% | |||
Class A common stock | 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved and available for issuance (in shares) | 25,300 | |||
Stock Options and RSUs | 2006 Plan and 2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate equity awards outstanding (in shares) | 4,200 | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 9,292 | |||
RSUs | Eligible non-executive employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 700 | |||
Stock-based compensation expense | $ | $ 7,600 | |||
PSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Reversal of expense | $ | $ 7,000 | |||
Granted (in shares) | 2,905 |
Employee Stock Plans - Stock Op
Employee Stock Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Shares Subject To Outstanding Stock Options | ||
Outstanding, beginning balance (in shares) | 8,560 | |
Granted (in shares) | 20 | |
Exercised (in shares) | (477) | |
Forfeited (in shares) | (342) | |
Outstanding, ending balance (in shares) | 7,761 | 8,560 |
Exercisable (in shares) | 3,198 | |
Vested and expected to vest (in shares) | 7,660 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning balance (in dollars per share) | $ 9.22 | |
Granted (in dollars per share) | 12.52 | |
Exercised (in dollars per share) | 5.12 | |
Forfeited (in dollars per share) | 13.62 | |
Weighted average exercise price, ending balance (in dollars per share) | 9.28 | $ 9.22 |
Exercisable (in dollars per share) | 3.38 | |
Vested and expected to vest (in dollars per share) | $ 9.22 | |
Average Remaining Contractual Term (Years) | ||
Average remaining contractual term (years), outstanding | 5 years | 5 years 10 months 24 days |
Average remaining contractual term (years), exercisable | 2 years 6 months | |
Average remaining contractual term (years), vested and expected to vest | 4 years 10 months 24 days | |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value, outstanding | $ 14,505 | $ 67,259 |
Aggregate intrinsic value, exercisable | 14,505 | |
Aggregate intrinsic value, vested and expected to vest | $ 14,505 |
Employee Stock Plans - Grant Da
Employee Stock Plans - Grant Date Fair Value and Intrinsic Value of Options Exercised (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Weighted-average grant date fair value per share of options granted (in dollars per share) | $ 5.54 | $ 6.54 | $ 4.69 |
Aggregate intrinsic value of options exercised during each respective period | $ 2,600 | $ 32,179 | $ 22,677 |
Employee Stock Plans - Valuatio
Employee Stock Plans - Valuation Assumptions for Estimated Fair Value of Stock Options (Details) - Stock options - $ / shares | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of common stock (in dollars per share) | $ 12.52 | ||
Expected volatility | 42.60% | ||
Expected volatility, minimum (percent) | 42.30% | 41.40% | |
Expected volatility, maximum (percent) | 42.70% | 42.40% | |
Expected term (years) | 5 years 9 months 18 days | ||
Risk-free interest rate | 3% | ||
Risk-free interest rate, minimum (percent) | 1% | 0.40% | |
Risk-free interest rate, maximum (percent) | 1.10% | 0.60% | |
Expected dividend yield (percent) | 0% | 0% | 0% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of common stock (in dollars per share) | $ 15.64 | $ 9.99 | |
Expected term (years) | 6 years | 6 years | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of common stock (in dollars per share) | $ 15.87 | $ 14.75 | |
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Employee Stock Plans - RSU & PS
Employee Stock Plans - RSU & PSU Activity (Details) shares in Thousands | 12 Months Ended |
Jan. 31, 2023 $ / shares shares | |
RSUs | |
Number of RSUs Outstanding | |
Beginning balance (in shares) | shares | 12,171 |
Granted (in shares) | shares | 9,292 |
Vested (in shares) | shares | (5,795) |
Forfeited (in shares) | shares | (3,164) |
Ending balance (in shares) | shares | 12,504 |
Weighted-Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 15.46 |
Granted (in dollars per share) | $ / shares | 11.46 |
Vested (in dollars per share) | $ / shares | 15.02 |
Forfeited (in dollars per share) | $ / shares | 14.35 |
Ending balance (in dollars per share) | $ / shares | $ 12.98 |
PSU | |
Number of RSUs Outstanding | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 2,905 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 2,905 |
Weighted-Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 15.21 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 15.21 |
Employee Stock Plans - Valuat_2
Employee Stock Plans - Valuation Assumptions for Estimated Fair Value of ESPP (Details) - 2018 ESPP - $ / shares | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum (percent) | 42.40% | 34.40% | 43.60% |
Expected volatility, maximum (percent) | 52.30% | 53.20% | 69.10% |
Risk-free interest rate, minimum (percent) | 2.30% | 0.10% | 0.10% |
Risk-free interest rate, maximum (percent) | 4.70% | 0.70% | 0.20% |
Expected dividend yield (percent) | 0% | 0% | 0% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of common stock (in dollars per share) | $ 6.15 | $ 16.07 | $ 12.15 |
Expected term (in years) | 6 months | 6 months | 6 months |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of common stock (in dollars per share) | $ 8.91 | $ 19.82 | $ 13.50 |
Expected term (in years) | 2 years | 2 years | 2 years |
Employee Stock Plans - Stock-Ba
Employee Stock Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Cost of Revenue | |||
Stock-based compensation expense | $ 96,401 | $ 72,070 | $ 59,283 |
Cost of subscription revenue | |||
Cost of Revenue | |||
Stock-based compensation expense | 8,141 | 5,875 | 4,849 |
Cost of professional services revenue | |||
Cost of Revenue | |||
Stock-based compensation expense | 12,297 | 10,274 | 9,952 |
Research and development | |||
Cost of Revenue | |||
Stock-based compensation expense | 25,819 | 21,072 | 19,562 |
Sales and marketing | |||
Cost of Revenue | |||
Stock-based compensation expense | 33,075 | 22,484 | 15,839 |
General and administrative | |||
Cost of Revenue | |||
Stock-based compensation expense | $ 17,069 | $ 12,365 | $ 9,081 |
Employee Stock Plans - Unrecogn
Employee Stock Plans - Unrecognized Compensation Costs (Details) $ in Thousands | 12 Months Ended |
Jan. 31, 2023 USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs, stock options | $ 5,604 |
Weighted-average recognition period (in years) | 1 year 7 months 6 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs | $ 131,879 |
Weighted-average recognition period (in years) | 2 years 1 month 6 days |
PSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs | $ 44,185 |
Weighted-average recognition period (in years) | 2 years 2 months 12 days |
2018 ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs | $ 9,406 |
Weighted-average recognition period (in years) | 1 year 2 months 12 days |
Warrants to Purchase Shares o_3
Warrants to Purchase Shares of Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||
Mar. 24, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||||
Warrant liability | $ 2,829 | $ 0 | ||
Gain on valuation of liability-classified warrants | $ 9,214 | $ 0 | $ 0 | |
Silver Lake Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by warrants (in shares) | 7.5 | 7.5 | ||
Warrants term | 7 years | |||
Term after initial closing date for required written approval | 18 months | |||
Make-Whole Fundamental Change scenarios, issuance of stock as percentage of outstanding shares for requirement of shareholder approval | 20% | |||
Warrants classified as liability (in shares) | 2.8 | |||
Warrant liability | $ 12,000 | |||
Gain on valuation of liability-classified warrants | $ 9,200 | |||
Silver Lake Warrants | Warrants, tranche one | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by warrants (in shares) | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ 20 | |||
Silver Lake Warrants | Warrants, tranche two | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by warrants (in shares) | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ 22 | |||
Silver Lake Warrants | Warrants, tranche three | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by warrants (in shares) | 2.5 | |||
Exercise price of warrants (in dollars per share) | $ 24 |
Warrants to Purchase Shares o_4
Warrants to Purchase Shares of Common Stock - Valuation Inputs (Details) - Warrants | 12 Months Ended | |
Jan. 31, 2023 | Mar. 24, 2022 | |
Fair value of common stock | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 7.24 | 13.77 |
Restriction period (in months) | 18 months | |
Exercise price | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 22 | 22 |
Exercise price | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 24 | 24 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.412 | 0.419 |
Expected term (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected term (in years) | 6 years 2 months 12 days | 7 years |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.036 | 0.024 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0 | 0 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Numerator: | |||
Net loss | $ (197,970) | $ (99,425) | $ (73,174) |
Denominator: | |||
Weighted-average common shares outstanding, basic (in shares) | 131,441 | 124,206 | 117,598 |
Weighted-average common shares outstanding, diluted (in shares) | 131,441 | 124,206 | 117,598 |
Net loss per share, basic (in dollars per share) | $ (1.51) | $ (0.80) | $ (0.62) |
Net loss per share, diluted (in dollars per share) | $ (1.51) | $ (0.80) | $ (0.62) |
Net Loss Per Share - Potentiall
Net Loss Per Share - Potentially Dilutive Securities Not Included in the Diluted Per Share Calculations (Details) - shares shares in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 43,486 | 20,875 | 20,229 |
Unvested RSUs issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 12,504 | 12,171 | 8,278 |
Initial Notes conversion | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 12,500 | 0 | 0 |
Issued and outstanding stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 7,761 | 8,560 | 11,812 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 7,500 | 0 | 0 |
Unvested PSUs issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 2,905 | 0 | 0 |
Shares committed under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities not included in the diluted per share calculation (in shares) | 316 | 144 | 139 |
Zephr Acquisition - Narrative (
Zephr Acquisition - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 02, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Change in fair value of contingent consideration | $ (380) | $ 0 | $ 0 | |
Zephr Inc | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 47,900 | |||
Cash payment | 43,100 | |||
Contingent consideration | 4,800 | |||
Contingent consideration | 4,400 | |||
Change in fair value of contingent consideration | 400 | |||
Goodwill expected tax deductible amount | 0 | |||
Transaction costs | $ 3,200 | |||
Compensation expense payable | 2,900 | |||
Zephr Inc | Minimum | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 0 | |||
Zephr Inc | Maximum | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 6,000 |
Zephr Acquisition - Schedule of
Zephr Acquisition - Schedule of Estimate of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Sep. 02, 2022 | Jan. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 53,991 | $ 17,632 | |
Zephr Inc | |||
Business Acquisition [Line Items] | |||
Cash | $ 2,103 | ||
Accounts receivable | 641 | ||
Prepaid expenses and other current assets | 916 | ||
Fixed Assets | 120 | ||
Goodwill | 35,009 | ||
Accounts payable | (292) | ||
Accrued liabilities | (303) | ||
Other current liabilities | (225) | ||
Deferred revenue | (2,056) | ||
Fair value of net assets acquired | 47,913 | ||
Zephr Inc | Trade names | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 800 | ||
Zephr Inc | Developed technology | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 10,300 | ||
Zephr Inc | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets: | $ 900 |
Zephr Acquisition - Schedule _2
Zephr Acquisition - Schedule of Acquired Identifiable Intangible Assets (Details) - Zephr Inc $ in Thousands | Sep. 02, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 12,000 |
Trade names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 800 |
Useful Life | 3 years |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 10,300 |
Useful Life | 7 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 900 |
Useful Life | 10 years |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 26, 2023 | Jan. 31, 2023 |
Subsequent Event [Line Items] | ||
Proposed settlement amount | $ 75,000,000 | |
Insurance Claims | ||
Subsequent Event [Line Items] | ||
Proposed settlement amount | $ 6,600,000 | |
Subsequent event | Revolving loan | First Citizens Bank | ||
Subsequent Event [Line Items] | ||
Credit facility maximum borrowing capacity | $ 30,000,000 |