ServiceTitan, Inc.
For the period ended Apr 30, 2025. Filed Jun 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2025 · Filed Jun 12, 2025
TTAN$81.77-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-10-31; filed 2025-01-14.
0000950170-25-005456
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-04-30; filed 2025-06-12.
0000950170-25-085509
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 152 previous paragraphs and 130 current paragraphs.
65 unchanged; 43 reworded; 21 added; 40 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 28 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Our close customer proximity and deep connection with the industry enable us to make evidence-based recommendations that can improve our customers’ business outcomes by identifying and replicating what works and fixing what does not. Our insights are augmented by the vast amounts of structured and unstructured data that we synthesize into best practices. These insights are then delivered across automated workflows, many of which we enhance with artificial intelligence (“AI”), to address the distinct vertical-specific needs of the trades.
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Seasonality and Other Fluctuations
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Certain recurring operational events that occur through our fiscal year have also historically impacted our financial performance. Specifically, we typically experience higher operating cash outflows during our first fiscal quarter due to payment of annual corporate bonuses. Additionally, our third fiscal quarter performance typically reflects increased sales and marketing expense related to our annual user conferences, Ignite and Pantheon.
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Cost of Revenue
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Operating Expenses
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Sales and Marketing Expense
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Research and Development Expense
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General and Administrative Expense
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Other Income (Expense), Net
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Cost of Revenue
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Professional services and other cost of revenue increased by $0.7 million, or 4%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. The increase was primarily due to an increase of $2.4 million in personnel-related costs driven by an increase in headcount. This increase was partially offset by a decrease of $0.7 million in third-party consulting costs, a decrease of $0.6 million of impairment losses on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use, and a decrease of $0.5 million of amortization of acquired intangible assets. Professional services and other gross margin improved to (123.9)% for the three months ended April 30, 2025, compared to (133.6)% for the three months ended April 30, 2024, due to the increase in revenue.
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Operating Expenses
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Sales and Marketing Expense
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Research and Development Expense
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General and Administrative Expense
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Other Income (Expense), Net
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Other income, net, was $3.4 million for the three months ended April 30, 2025, compared to other expense, net, of $2.2 million for the three months ended April 30, 2024. The increase was primarily due to a $3.2 million increase in interest income due to a higher cash balance as well as a decrease in interest expense of $2.1 million due to a lower debt balance in the three months ended April 30, 2025 resulting from the repayment of all amounts outstanding under our Revolver Facility that occurred in January 2025.
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Non-GAAP Income from Operations and Non-GAAP Operating Margin
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Non-GAAP Net Income
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As of April 30, 2025, we had total debt of $104.9 million, consisting of the outstanding principal balance of the Term Loan of $106.8 million, net of unamortized debt issuance costs of $1.8 million. There was no balance drawn under the Revolver Facility.
Current report
Net cash provided by financing activities was $0.4 million for the three months ended April 30, 2025. This consisted primarily of proceeds from the exercise of stock options of $1.2 million. This was partially offset by payments related to IPO costs of $0.5 million and the repayment of debt of $0.3 million.
Removed paragraphs (40)
Previous report
Since our founding, we have translated our passion for the trades into a commitment to innovation. We serve many trades, including plumbing, electrical, HVAC, garage door, pest control, roofing, landscaping and others.
Previous report
We go to market with our platform in three ways: Core, Pro and FinTech products. We land with our Core product, which offers a base-level functionality across all key workflows, including call tracking, scheduling, dispatching, end-customer communications, marketing automation, estimating, job costing, sales, inventory and payroll integration. To supplement our Core product and provide an even higher level of functionality, we offer our Pro products, which provide value-additive capabilities such as Marketing Pro, Pricebook Pro, Dispatch Pro and Scheduling Pro, as well as our FinTech products, which include payment processing and third-party financing solutions. Together, we refer to our Pro and FinTech products as “add-on products.”
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Recent Developments
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Initial Public Offering
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In December 2024, we completed our initial public offering (the “IPO”), in which we issued and sold an aggregate of 10,120,000 shares of our Class A common stock at a public offering price of $71.00 per share. Wereceived aggregate proceeds of $679.0 million, net of underwriting discounts and commissions but before deducting offering expenses payable by us. Immediately prior to the closing of the IPO, all 42,465,855 shares of our then-outstanding shares of redeemable convertible preferred stock automatically converted into 44,257,289 Class A common shares at their respective as-adjusted conversion ratios.
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Upon the effectiveness of the registration statement on Form S-1 relating to the IPO (the “IPO Registration Statement”), the performance vesting condition of certain stock options and RSUs was met, and we recognized$59.1 million of stock-based compensation expense for the portion of the service period completed by service providers from the grant date through the effectiveness of the IPO Registration Statement, as further described in Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
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Our Revenue Model
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Subscription. We offer tiered subscription contracts to our customers that vary depending on the features and functionality they require for our Core product, which offers a base-level functionality across all key workflows, including call tracking, scheduling, dispatching, end-customer communications, marketing automation, estimating, job costing, sales, inventory and payroll integration. To supplement our Core product and provide an even higher level of functionality, our Pro products, including Marketing Pro, Pricebook Pro, Dispatch Pro and Scheduling Pro, provide value-additive capabilities. The majority of our Pro product offerings are sold on a subscription basis, typically as an add-on extension to our Core product subscription offering.
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Usage. We receive a fee from third-party payment processors and third-party financing partners that we help connect to the end customers on our platform. Because the third-party processor and third-party financing partners provide the payment settlement and financing options to the end customer and are responsible for the provision of the payment or financing services, we do not assume any balance sheet risk for these transactions. Our revenue from these FinTech transactions consists primarily of fees from revenue sharing agreements with payment processing and end-customer financing partners, and we recognize this revenue on a net basis. In addition, usage revenue includes fees from certain Pro product features sold on a usage basis, including direct mail services, and other usage-based services.
Previous report
For both the three and nine months ended October 31, 2024, our platform revenue represented 96% of our total revenue, and for both the three and nine months ended October 31, 2023 our platform revenue represented 95% of our total revenue, which we believe demonstrates the general recurring nature of our revenue model.
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Professional Services and Other Revenue. We generate a lesser portion of our revenue from professional services to provide onboarding, implementation and configuration support to our customers and training to their employees. Professional services and other revenue also includes live voice and chat services and certain ancillary products and services sold to customers. Our professional services and other revenue represented 4% of our total revenue for both the three and nine months ended October 31, 2024, and 5% of our total revenue for both the three and nine months ended October 31, 2023.
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Our Business Model
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The trades form a critical but heavily fragmented industry. Trades businesses are often difficult to reach through traditional enterprise software sales and marketing approaches, which are designed to engage IT departments as buyers. We engage trades businesses with a deep understanding of their unique needs and objectives and with a mindset focused on creating a clear and immediate value add.
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Our customers’ success is our first priority. By making our customers more successful, we establish proof points that strengthen our brand and attract additional customers to our platform. This powers a referral-based, go-to-market flywheel that furthers our ability to efficiently serve the market.
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We employ several strategies to efficiently go-to-market. These include digital marketing, which draws inbound leads to our website, and outbound direct marketing, such as targeted phone outreach. We also benefit from significant word-of-mouth and often generate new business through referrals from current customers and industry partners that are trusted across the trades, including industry associations, original equipment manufacturers (“OEMs”), and distributors. We extend our reach further through industry conferences, including our annual customer conferences, Ignite and Pantheon, which were most recently held in the summer and fall 2024, respectively, with collectively over 3,500 customers and over 100 sponsors, including OEMs, technology partners and trade associations, in attendance. These conferences organically grow our brand awareness, reinforce our trusted leadership within the industry, generate a robust pipeline of potential customers and keep us informed of evolving customer needs to guide our innovation. Combined with a robust outbound marketing program, these efforts fuel our sales pipeline, resulting in product demonstration requests and sales opportunities.
Previous report
Our customers’ journey begins with onboarding and training, which we see as essential to our customers’ success. During onboarding, our teams heavily invest in our customers’ success by ensuring an effective implementation experience. We train technicians, customer service representatives and other office employees and integrate their data flows and systems with our platform to maximize the value we can deliver. We accordingly price our onboarding services competitively as acquisition, retention and sales velocity tools. We typically introduce FinTech products at the time of customer onboarding to take advantage of the value such add-on products provide given the importance of being able to process payments and offer financing for a seamless customer experience.
Previous report
Once onboarded, customers often expand their relationship with us by layering on additional functionality as they see the benefit of our platform and their specific needs evolve. We pride ourselves in our ability to anticipate and recommend which products would best serve a customer’s unmet needs. We employ dedicated Pro and FinTech product sales teams that introduce these products at the right time for each customer, leveraging our industry and internal expertise to know the appropriate moment to approach the customer. Our ability to retain and expand customer relationships is evidenced by our net dollar retention rate of over 110% for each of the last ten fiscal quarters as of October 31, 2024.1
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Seasonality
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We incurred $59.1 million of the stock-based compensation expense associated with certain performance-based options and RSUs, which will be included in operating expenses in the fourth quarter of fiscal 2025, resulting from the completion of our IPO on December 13, 2024. In addition, we will incur additional stock-based compensation expense going forward relating to these awards.
Previous report
Professional services and other cost of revenue increased by $1.8 million, or 12%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. The increase was primarily due to an increase of $1.6 million in personnel-related costs driven by an increase in headcount. In addition, we recorded a $0.6 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the three months ended October 31, 2024. Professional services and other gross margin decreased to (112)% for the three months ended October 31, 2024, compared to (81)% for the three months ended October 31, 2023, due to the decrease in revenue.
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Other expense, net decreased by $0.5 million, or 19%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023 primarily due to a $0.3 million positive impact of foreign currency and a $0.2 million decrease in interest expense.
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Comparison of the Nine Months Ended October 31, 2023 and 2024
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Revenue
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Professional services and other revenue decreased by $1.6 million, or 6%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. This decrease was primarily driven by the disposal of certain marketing solutions in the fourth quarter of fiscal 2024 which contributed $4.4 million in revenue for the nine months ended October 31, 2023. The decrease was partially offset by increased revenue resulting from a higher volume of services performed.
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Platform cost of revenue increased by $23.3 million, or 18%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The increase was primarily due to a $10.0 million increase in the costs to deliver our Core, Pro and FinTech products, driven by the increase in our subscription and usage-based revenue. In addition, personnel-related costs increased by $5.7 million for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, primarily due to an increase in headcount. We also recorded a $5.4 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the nine months ended October 31, 2024. Amortization of capitalized internally developed software also increased $3.0 million for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. Platform gross margin increased to 72% for the nine months ended October 31, 2024, compared to 71% for the nine months ended October 31, 2023, primarily due to improved efficiencies in delivering our platform at scale.
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Professional services and other cost of revenue increased by $0.4 million, or 1%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The increase was primarily due to a $2.6 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the nine months ended October 31, 2024. In addition, personnel-related costs increased $0.8 million primarily due to an increase in headcount. These increases were partially offset by a decrease of $0.8 million in third-party consulting costs and a decrease of $1.8 million in restructuring costs in the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. Professional services and other gross margin decreased to (118)% for the nine months ended October 31, 2024, compared to (103)% for the nine months ended October 31, 2023, due to the decrease in revenue.
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Sales and marketing expense increased by $20.3 million, or 12%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The increase in sales and marketing expense was primarily driven by a net increase of $12.1 million in personnel-related costs due to an increase in headcount, which was partially offset by a decrease of $2.5 million in stock-based compensation expense primarily due to incremental stock-based compensation expense recorded in the first half of fiscal 2024 resulting from the fiscal 2024 tender offer. We also recorded a $6.9 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the nine months ended October 31, 2024. Additionally, marketing and advertising costs increased by $2.6 million. These increases were partially offset by a decrease in restructuring expenses of $1.4 million.
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Research and development expense increased by $37.9 million, or 25%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The increase in research and development expense was primarily driven by an increase of $27.1 million in personnel-related costs, which includes $3.0 million increase in stock-based compensation expense, driven by an increase in headcount. We also recorded a $6.7 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the nine months ended October 31, 2024. Additionally, software subscription costs increased by $3.0 million.
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General and administrative expense increased by $23.5 million, or 24%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The increase in general and administrative expense was primarily driven by a $17.0 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the nine months ended October 31, 2024. Personnel-related costs also increased by $3.1 million due to an increase in headcount, which was partially offset by a decrease of $3.1 million in stock-based compensation expense primarily due to incremental stock-based compensation expense recorded in the first half of fiscal 2024 resulting from the fiscal 2024 tender offer. The increase in personnel-related costs was driven by an increase in headcount. In addition, we incurred acquisition-related costs of $1.6 million related to the acquisition of Convex during the nine months ended October 31, 2024.
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Other expense, net increased by $0.8 million, or 13%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, primarily due to a $1.0 million government grant received during the nine months ended October 31, 2023 related to our operations in Armenia.
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Provision for Income Taxes
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Our provision for income taxes decreased by $1.7 million, or 57%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The change was primarily driven by income earned by our foreign subsidiaries and a merger of a previously acquired subsidiary during the nine months ended October 31, 2024 resulting in the release of valuation allowance as the deferred tax liabilities of the acquired subsidiary are an available source of income to realize our deferred tax assets.
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Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin
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Non-GAAP Net Income (Loss)
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As of October 31, 2024, the outstanding principal balance of the Term Loan was $107.3 million, and there was $70.0 million drawn under the Revolver Facility. For additional information regarding the Credit Agreement, refer to Note 8,“Debt Arrangements,” within our condensed consolidated financial statements.
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Non-Convertible Preferred Stock
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In October 2022, we issued 250,000 shares of non-convertible preferred stock and warrants to purchase 1,262,516 shares of common stock for $0.01 per share. The total net proceeds received after issuance costs for this financing was $249.2 million. The warrants were fully exercised in October 2022. We used the net proceeds from the foregoing to repay a portion of the indebtedness incurred under term loans that were entered into in February 2022 in connection with our acquisition of FieldRoutes.
Previous report
The holders of the non-convertible preferred stock were entitled to cumulative dividends at 10% per annum for the first five years and 15% per annum between the fifth and sixth anniversary, with dividends prior to the sixth anniversary to be paid-in-kind. After the sixth anniversary, the holders were entitled to cash dividends, payable quarterly, at an annual rate of 20% of the non-convertible preferred stock liquidation preference.
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Subsequent to October 31, 2024, we used a portion of the proceeds from the IPO to redeem all of the outstanding non-convertible preferred stock for an aggregate redemption amount of $310.6 million.
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Net cash provided by financing activities was $28.1 million for the nine months ended October 31, 2023. This consisted primarily of $33.6 million in net proceeds from the issuance of Series H-1 redeemable convertible preferred stock and $8.0 million from proceeds from the exercise of stock options. These were offset by the repurchase of shares for the tax withholdings upon settlement of RSUs of $12.0 million, the repayment of debt of $0.9 million and the payment of contingent consideration of $0.6 million.
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Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties and our actual results, events or circumstances could differ materially from those described in forward-looking statements. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. The last day of our fiscal year is January 31, and our fiscal quarters end on April 30, July 31, October 31 and January 31. Our fiscal years ended January 31, 2021, 2023, 2024 and 2025 are referred to herein as fiscal 2021, fiscal 2023, fiscal 2024 and fiscal 2025, respectively. Unless the context otherwise requires, all references in this Quarterly Report to “we,” “us,” “our,” “our company,” and “ServiceTitan” refer to ServiceTitan, Inc. and its consolidated subsidiaries, and references to our “common stock” include our Class A common stock, Class B common stock and Class C common stock.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties and our actual results, events or circumstances could differ materially from those described in forward-looking statements. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. The last day of our fiscal year is January 31, and our fiscal quarters end on April 30, July 31, October 31 and January 31. Our fiscal years ended January 31, 2025 and 2026 are referred to herein as fiscal 2025 and fiscal 2026, respectively. Unless the context otherwise requires, all references in this Quarterly Report to “we,” “us,” “our,” “our company,” and “ServiceTitan” refer to ServiceTitan, Inc. and its consolidated subsidiaries, and references to our “common stock” include our Class A common stock, Class B common stock and Class C common stock.
Previous wording
We are modernizing a massive and technologically underserved industry—an industry commonly referred to as the “trades.” The trades consist of the collection of field service activities required to install, maintain, and service the infrastructure and systems of residences and commercial buildings.
Current wording
We are modernizing a large and technologically underserved industry—an industry commonly referred to as the “trades.” The trades consist of the collection of field service activities required to install, maintain, and service the infrastructure and systems of residences and commercial buildings.
Previous wording
Our founders, Ara Mahdessian and Vahe Kuzoyan, founded ServiceTitan to provide tradespeople, like their parents, with technology that is purpose-built to help trades businesses thrive. We built our cloud-based software platform to offer end-to-end capabilities to manage complex workflows, connect key stakeholders and provide impactful industry best practices. ServiceTitan remains to this day maniacally focused on the success of our customers as we fundamentally believe that our customers’ success leads to our success.
Current wording
ServiceTitan was born in the trades and built for the trades. Our founders, Ara Mahdessian and Vahe Kuzoyan (our “Co-Founders”), founded ServiceTitan to provide tradespeople, like their parents, with technology that is purpose built to help trades businesses thrive.
Previous wording
We designed our platform to address key workflows within a trades business. Contractors spend their days interfacing with the ServiceTitan platform across what we believe to be the five most business-critical functions, or the “core centers of gravity,” inside a trades business: CRM (customer relationship management, including sales enablement, marketing automation and customer service), FSM (field service management, including scheduling and dispatching), ERP (enterprise resource planning, including inventory), HCM (human capital management, including compensation and payroll integration) and FinTech (including payments and third-party consumer financing). For additional information, refer to “—Our Business Model” below.
Current wording
Our software provides an end-to-end, cloud-based software platform that connects and manages a wide array of business workflows such as advertising, job scheduling and management, dispatching, generating estimates and invoices, payment processing and more. Tradespeople spend their days interfacing with the ServiceTitan platform across what we believe to be the five most business-critical functions, or the “core centers of gravity,” inside a trades business: CRM (customer relationship management, including sales enablement, marketing automation and customer service), FSM (field service management, including scheduling and dispatching), ERP (enterprise resource planning, including inventory), HCM (human capital management, including compensation and payroll integration) and FinTech (including payments and third-party consumer financing). By offering interoperable capabilities in all five centers of gravity, we continuously capture comprehensive data insights across key workflows in a trades business.
Previous wording
We are intimately aware of the challenges our customers face every day. Our platform is differentiated by our close customer proximity and deep connection with the trades industry, which enables us to make real-time, evidence-based recommendations to our customers, augmented by the vast amounts of data that we synthesize into best practices. Our platform enables impactful outcomes for our customers, including accelerating revenue and driving operational efficiency, all while improving the experience for both end customers and contractors. As customers experience the significant business acceleration benefits of our platform, we have often observed our customers hire more technicians, increase gross transaction volume (“GTV”), representing total invoiced by our customers to end customers through our platform, and adopt more add-on products. Increased customer adoption of our platform leads to further data and insights, allowing us to build more differentiated features and address opportunities in new trades, use cases and customer subsegments. All of this allows us to drive more growth and efficiency for customers, delivering outsized return on investment (“ROI”), in our products. In fiscal 2023 and fiscal 2024 we processed $44.9 billion and $55.7 billion of GTV, respectively and for the three months ended October 31, 2023 and 2024, we processed $14.8 billion and $17.8 billion of GTV, respectively.
Current wording
Our platform enables impactful outcomes for our customers, including accelerating revenue and driving operational efficiency, all while improving the experience for both end customers and contractors. As customers experience the significant business acceleration benefits of our platform, we have often observed our customers hire more technicians, increase gross transaction volume (“GTV”), representing total dollars invoiced by our customers to end customers through our platform, and adopt more add-on products. Increased customer adoption of our platform leads to further data and insights, allowing us to build more differentiated features and address opportunities in new trades, use cases and customer subsegments. All of this allows us to drive more growth and efficiency for customers, delivering outsized return on investment (“ROI”), in our products. For the three months ended April 30, 2025 and 2024, we processed $17.7 billion and $14.5 billion of GTV, respectively.
Previous wording
Grow with Our Customers. Our long-term revenue growth is correlated with the success of customers on our platform, and we strive to support the growth of their businesses. We can improve outcomes for our customers across every stage of the go-to-market funnel, from determining which end customers to target, marketing to those end customers effectively and converting and retaining end customers. We empower technicians with the tools and training necessary to drive better end-customer outcomes that, in turn, can generate higher ticket sizes and more repeatable work orders. As our customers grow on our platform and expand into additional locations, generating more sales, hiring more technicians and automating more workflows, they can also significantly increase GTV, and, in turn, drive our growth and financial success.
Current wording
We empower technicians with the tools and training necessary to drive better end-customer outcomes that, in turn, can generate higher ticket sizes and more repeatable work orders. As our customers grow on our platform and expand into additional locations, generating more sales, hiring more technicians and automating more workflows, they can also significantly increase GTV, and, in turn, drive our growth and financial success.
Previous wording
Our ability to retain and increase the revenue we earn from existing customers is a key driver of our future business performance and depends on our customers renewing their subscriptions to our platform, expanding their number of users, increasing their usage of existing solutions and adopting additional products, driven by the three key strategies described below. We have observed that as customers experience the significant business acceleration benefits of our platform, they typically not only remain on our platform but also often hire more technicians and adopt more of our products.
Current wording
Our ability to retain and increase the revenue we earn from existing customers is a key driver of our future business performance and depends on our customers renewing their subscriptions to our platform, expanding their number of users, increasing their usage of existing solutions and adopting additional products, driven by the three key strategies described below. We have observed that as customers experience the significant business acceleration benefits of our platform, they typically not only remain on our platform but also often hire more technicians and adopt more of our products. Our ability to retain and expand customer relationships is evidenced by our net dollar retention rate, which was over 110% for the three months ended April 30, 2025.1
Previous wording
Drive More Value to Our Customers through Add-on Product Adoption. As we demonstrate the high ROI of our products to our customers, we are able to sell more add-on products to them and increase our share of wallet, which we measure as the portion of our customers’ GTV that we are able to earn. We efficiently expand our customer relationships over time to serve their additional needs and automate more workflows through our platform. We believe that the more our customers use our platform to power their workflows, the more value we deliver to them, and the higher revenue we can earn from them. As a result, we continue to invest in research and development to improve the functionality of our existing Core and add-on products. Our ability to increase adoption of our add-on products will depend on customer satisfaction with our platform, competition, pricing and our ability to continuously demonstrate the value proposition of our add-on products. We plan to continue investing in sales and marketing, thought leadership, industry resources and customer success initiatives with a focus on driving additional value to customers on our platform.
Current wording
Drive More Value to Our Customers through Add-on Product Adoption. As we demonstrate the high ROI of our products to our customers, we are able to sell more add-on products to them and increase our share of wallet, which we measure as the portion of our customers’ GTV that we are able to earn. We efficiently expand our customer relationships over time to serve their additional needs and automate more workflows through our platform. We believe that the more our customers use our platform to power their workflows, the more value we deliver to them, and the higher revenue we can earn from them. As a result, we continue to invest in research and development to improve the functionality of our existing Core and add-on products. Our ability to increase adoption of our add-on products will depend on customer satisfaction with our platform, competition, pricing and our ability to continuously demonstrate the value proposition of our add-on products. We plan to continue investing in sales and marketing, thought leadership, industry resources and leveraging our customer success teams to focus on driving additional expanded value to customers on our platform.
Previous wording
Generally, demand for our customers’ services tends to increase during the second quarter of our fiscal year, as hot weather in the summer months typically results in higher demand for trades businesses. Given that our revenue model allows our customers to scale as needed (processing more GTV through our platform and adding technicians), our sequential revenue growth has historically been strongest in the second quarter of each fiscal year. This is especially true for our usage-based revenue, which is directly tied to the amount of GTV processed through our platform. As our usage-based revenue consists primarily of payment processing, which we recognize net of interchange and other direct expenses which are passed to the customer, this seasonality also positively impacts our platform gross margin and operating margin for the second quarter of each fiscal year. Our historical growth—including through the acquisition of new customers and the launch of new products, particularly subscription-based products that are less seasonally impacted than our usage-based products—may have made it more difficult to evaluate the impact of seasonality on our business by masking the full impact of the heightened quarter-over-quarter growth we have generally experienced in the second quarter of each fiscal year. We believe seasonality may continue to impact our quarterly results going forward, trends as a result of seasonality may become more pronounced or other seasonal trends may develop.
Current wording
Generally, demand for our customers’ services tends to increase during the second quarter of our fiscal year, as hot weather in the summer months typically results in higher demand for trades businesses. Given that our revenue model allows our customers to scale as needed (processing more GTV through our platform and adding technicians), our sequential revenue growth has historically been strongest in the second quarter of each fiscal year. This is especially true for our usage-based revenue, which is directly tied to the amount of GTV processed through our platform.
Previous wording
We principally generate platform revenue through (i) subscription revenue generated from access to and use of our platform, including subscriptions to our Core and certain Pro products, and (ii) usage-based revenue generated from the transactions using our FinTech solutions and usage of certain Pro products. Our customer contracts are generally based on the number of users, mix of products, number of end customers and the amount of GTV.
Current wording
We principally generate platform revenue through (i) subscription revenue generated from access to and use of our platform, including subscriptions to our Core and certain Pro products, and (ii) usage-based revenue generated from the transactions using our FinTech solutions and usage of certain Pro products and other usage-based services. Our customer contracts are generally based on the number of users, mix of products, number of end customers and the amount of GTV.
Previous wording
We offer tiered subscription plans for our Core and Pro products with varying contract lengths. Pursuant to these subscription contracts our customers do not have the ability to take possession of our proprietary software. For new customers, we primarily enter into either annual or multi-year subscription agreements with contract terms typically ranging from 12 to 36 months; however, some older customers are on month-to-month contracts. In nearly all cases, these contracts (monthly, annual, or multi-year) are renewed automatically unless cancelled in advance. We generally bill our customers on a monthly basis in advance of services, regardless of contract term. In some cases for certain products, the customer is billed in arrears. Pricing for these subscriptions are driven by the features included in the package and are linked to the size of the customer’s business, generally based on the number of field technicians at the customer but in some cases directly tied to the number of end customers or the customer’s revenue. In this way, our success is linked to the growth of our customers.
Current wording
We offer tiered subscription plans for our Core and Pro products with varying contract lengths. Pursuant to these subscription contracts our customers do not have the ability to take possession of our proprietary software. For new customers, we primarily enter into either annual or multi-year subscription agreements with contract terms typically ranging from 12 to 36 months; however, certain Pro product and legacy customers are on month-to-month contracts. In nearly all cases, these contracts (monthly, annual, or multi-year) are renewed automatically unless cancelled in advance. We generally bill our customers on a monthly basis in advance of services, regardless of contract term. In some cases for certain products, the customer is billed in arrears. Pricing for these subscriptions are driven by the features included in the package and are linked to the size of the customer’s business, generally based on the number of field technicians at the customer but in some cases directly tied to the number of end customers or the customer’s revenue. In this way, our success is linked to the growth of our customers.
Previous wording
Professional services and other revenue is primarily derived from services we provide to our customers, principally onboarding, training, and some ongoing professional services. Professional services and other revenue also includes live voice and chat services and certain ancillary products and services sold to customers. Fees for these professional services are generally invoiced separately at the commencement of the contract or as ordered by the customer. Revenue is recognized for professional services as the services are performed.
Current wording
Professional services and other revenue is primarily derived from services we provide to our customers, principally onboarding, training, and some ongoing professional services. Professional services and other revenue also includes revenue generated from our live voice and chat services and certain other ancillary hardware products and services sold to customers. Fees for these professional services are generally invoiced separately at the commencement of the contract or as ordered by the customer. Revenue is recognized for professional services as the services are performed or products are delivered.
Previous wording
Cost of platform revenue consists of personnel-related costs and costs related to the provisioning of our platform services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation related to our customer support team and certain customer success personnel. Costs related to the provisioning of our platform services are primarily comprised of fees paid to third-party service providers associated with delivery of Pro and FinTech products, platform infrastructure and server costs, call tracking fees, and payment processing fees. In addition, cost of platform revenue includes amortization of certain acquired intangible assets, amortization of capitalized internal-use software costs directly related to our product development activities and allocated overhead, which we define as costs such as depreciation, rent, utilities, and other facilities-related costs that are allocated across our expense categories based on headcount.
Current wording
Cost of platform revenue consists of personnel-related costs and costs related to the provisioning of our platform services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation related to our customer support team and certain customer success personnel. Costs related to the provisioning of our platform services are primarily comprised of fees paid to third-party service providers associated with delivery of Pro and FinTech products, platform infrastructure and server costs, call tracking fees, and payment processing fees. In addition, cost of platform revenue includes amortization of certain acquired intangible assets, amortization of capitalized internal-use software costs directly related to our cloud-based software solution and allocated overhead, which we define as costs such as depreciation, rent, utilities, and other facilities-related costs that are allocated across our expense categories based on headcount.
Previous wording
We expect our cost of platform revenue to increase in absolute dollars as the adoption and usage of our platform and product offerings increase.
Current wording
We expect our cost of platform revenue to increase in absolute dollars as the adoption and usage of our platform and product offerings increase. Beginning in fiscal 2026, we shifted the roles of our customer success function to focus on both customer retention and customer expansion, and, as a result, certain customer success costs are now being recorded in sales and marketing expense.
Previous wording
Professional services and other cost of revenue consists primarily of personnel-related costs in connection with providing customer onboarding and customer implementation, live voice and chat services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. Professional services and other cost of revenue also includes amortization of certain acquired intangible assets, allocated overhead, and the cost of other ancillary products and services sold to customers. Professional services and other cost of revenue historically has exceeded professional services and other revenue as we invest in providing customers with implementation and onboarding services to enhance customer success. We expect our cost of professional services and other revenue to increase in absolute dollars as the adoption of our product offerings for both new and existing customers increases.
Current wording
Professional services and other cost of revenue consists primarily of personnel-related costs in connection with providing customer onboarding and customer implementation, live voice and chat services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. Professional services and other cost of revenue also includes amortization of certain acquired intangible assets, allocated overhead, and the cost of other ancillary hardware products and services sold to customers. Professional services and other cost of revenue historically has exceeded professional services and other revenue as we invest in providing customers with implementation and onboarding services to enhance customer success. We expect our cost of professional services and other revenue to increase in absolute dollars as the adoption of our product offerings for both new and existing customers increases.
Previous wording
Sales and marketing expense consists primarily of personnel-related costs, consulting costs and other costs incurred in connection with our sales and marketing and certain customer success efforts. Personnel-related costs primarily include salary, commissions, employee benefits, bonuses and stock-based compensation for our outbound sales personnel that focus on new customer acquisition and for our customer success personnel that focus on expanding adoption of our products at existing customers. Sales and marketing expense also includes marketing and advertising expenses, such as our annual customer conferences, Pantheon and Ignite, and travel and trade show expenses, amortization of acquired customer intangible assets and allocated overhead. As our annual customer conferences are significant sales and marketing events, so we therefore expect an increase in sales and marketing expense during the respective quarter in which they occur. We expect that sales and marketing expense will increase on an absolute dollar basis as we invest to grow our business. We plan to continue to expand sales and marketing efforts to attract new customers, retain existing customers and increase revenue from both new and existing customers by adding outbound sales personnel and expanding our customer success team activities.
Current wording
Sales and marketing expense consists primarily of personnel-related costs, consulting costs and other costs incurred in connection with our sales and marketing and certain customer success efforts. Personnel-related costs primarily include salary, commissions, employee benefits, bonuses and stock-based compensation for our outbound sales personnel that focus on new customer acquisition and for our customer success personnel that focus on expanding adoption of our products at existing customers. Sales and marketing expense also includes marketing and advertising expenses, such as our annual customer conferences, Pantheon and Ignite, and travel and trade show expenses, amortization of acquired customer intangible assets and allocated overhead. As our annual customer conferences are significant sales and marketing events, we expect an increase in sales and marketing expense during the respective quarter in which they occur. We expect that sales and marketing expense will increase on an absolute dollar basis as we invest to grow our business. We plan to continue to expand sales and marketing efforts to attract new customers, retain existing customers and increase revenue from both new and existing customers by adding outbound sales personnel and expanding our customer success team activities. In addition, beginning in fiscal 2026, we shifted the roles of our customer success function to focus on both customer retention and customer expansion and as a result certain customer success costs are now being recorded in sales and marketing expense.
Previous wording
General and administrative expense consists primarily of personnel-related costs for our executive, finance, legal, information systems, operations and human resource teams. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. General and administrative expense also includes professional fees, other outside consulting expenses, acquisition-related expenses and allocated overhead. We expect that general and administrative expense will increase on an absolute dollar basis, but over time decrease as a percentage of total revenue, as we focus on the efficiency of our processes and systems that will enable our internal support functions to scale with the growth of our business. In the short term, we anticipate increases to general and administrative expense to support our growth and as we incur the costs of compliance associated with being a public company, including increased accounting and legal expenses.
Current wording
General and administrative expense consists primarily of personnel-related costs for our executive, finance, legal, information systems, operations and human resource teams. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. General and administrative expense also includes professional fees, other outside consulting expenses, acquisition-related expenses and allocated overhead. We expect that general and administrative expense will increase on an absolute dollar basis, but over time decrease as a percentage of total revenue, as we focus on the efficiency of our processes and systems that will enable our internal support functions to scale with the growth of our business. We expect increases to general and administrative expense to support our growth and as we incur the costs of compliance associated with being a public company, including increased accounting and legal expenses.
Previous wording
Other expense, net consists primarily of interest expense related to our debt arrangements with financial institutions, interest income earned on our cash and cash equivalents, loss on extinguishment of debt, gains or losses on foreign currency transactions and miscellaneous other income.
Current wording
Other income (expense), net consists primarily of interest expense related to our debt arrangements with financial institutions, interest income earned on our cash and cash equivalents, gains or losses on foreign currency transactions and miscellaneous other income.
Previous wording
Our income tax provision consists primarily of U.S. federal, state and foreign income taxes. We maintain a full valuation allowance for our U.S. federal and state deferred tax assets, including net operating loss carryforwards, that are unable to be offset by our U.S. federal and state deferred tax liabilities, as we have concluded that it is not more likely than not that the U.S. deferred tax assets will be realized.
Current wording
Our income tax provision consists of U.S. federal, state, and foreign income taxes. We maintain a full valuation allowance for our U.S. federal and state deferred tax assets, including net operating loss carryforwards, that are unable to be offset by our U.S. federal and state deferred tax liabilities, as we have concluded that it is not more likely than not that the U.S. deferred tax assets will be realized.
Previous wording
Platform revenue increased by $39.5 million, or 26%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. This increase was primarily driven by subscription revenue, which increased by $31.0 million, or 27%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. In addition, revenue from our usage-based products increased by $8.6 million, or 23%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. This increase was primarily driven by increases in both the volume and types of payment transactions processed using our FinTech offerings.
Current wording
Platform revenue increased by $44.8 million, or 27%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. This increase was primarily driven by subscription revenue, which increased by $36.7 million, or 29%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. In addition, revenue from our usage-based products increased by $8.1 million, or 22%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. This increase was primarily driven by increases in both the volume and types of payment transactions processed using our FinTech offerings.
Previous wording
Professional services and other revenue decreased by $0.3 million, or 4%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. This decrease was primarily driven by the disposal of certain marketing solutions in the fourth quarter of fiscal 2024 which contributed $1.5 million in revenue for the three months ended October 31, 2023. This decrease was partially offset by increased revenue resulting from a higher volume of services performed.
Current wording
Professional services and other revenue increased by $0.6 million, or 9%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. This increase was primarily driven by a higher volume of services performed.
Previous wording
Platform cost of revenue increased by $10.2 million, or 24%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. The increase was primarily due to a $4.0 million increase in personnel-related costs driven by an increase in headcount and a $3.6 million increase in costs to deliver our Core, Pro, and FinTech products driven by the increase in our subscription and usage-based revenue. We also recorded a $1.2 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the three months ended October 31, 2024. Amortization of capitalized internally developed software increased by $1.4 million. Platform gross margin increased to 73% for the three months ended October 31, 2024, compared to 72% for the three months ended October 31, 2023, primarily due to improved efficiencies in delivering our platform at scale.
Current wording
Platform cost of revenue increased by $2.3 million, or 5%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. The increase was primarily due to a $4.1 million increase in costs to deliver our Core, Pro, and FinTech products driven by the increase in our subscription and usage-based revenue and a $1.6 million increase in amortization of capitalized internally developed software. These increases were partially offset by a decrease of $1.9 million of impairment losses on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use. In addition, personnel-related costs decreased $1.2 million due to the shift in the roles of our customer success function to sales and marketing activities at the beginning of fiscal 2026. Platform gross margin increased to 75.9% for the three months ended April 30, 2025, compared to 70.7% for the three months ended April 30, 2024, primarily due to the shift of certain customer success costs to sales and marketing, a decrease in impairment losses on operating lease assets and related property and equipment, and improved efficiencies in delivering our platform at scale.
Previous wording
Sales and marketing expense increased by $7.7 million, or 13%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. The increase in sales and marketing expense was primarily driven by an increase of $5.6 million in personnel-related costs driven by an increase in headcount. Additionally, we recorded a $1.5 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the three months ended October 31, 2024 and marketing and advertising costs increased $0.6 million.
Current wording
Sales and marketing expense increased by $11.6 million, or 20%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. The increase in sales and marketing expense was primarily driven by an increase of $10.5 million in personnel-related costs resulting from an increase in headcount and, beginning in fiscal 2026, we shifted the roles of our customer success function to focus on both customer retention and customer expansion, and as a result, certain customer success costs are now being recorded in sales and marketing. In addition, marketing and advertising costs increased $2.9 million for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. These increases were partially offset by a decrease of $1.9 million of impairment losses on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use.
Previous wording
Research and development expense increased by $16.8 million, or 34%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. The increase in research and development expense was primarily driven by an increase of $13.8 million in personnel-related costs, which includes $3.1 million increase in stock-based compensation expense driven by an increase in headcount. Additionally, we recorded a $1.5 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the three months ended October 31, 2024.
Current wording
Research and development expense increased by $10.5 million, or 18%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. The increase in research and development expense was primarily driven by an increase of $11.2 million in personnel-related costs, which included $3.6 million increase in stock-based compensation expense driven by an increase in headcount. These increases were partially offset by a decrease of $1.8 million of impairment losses on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use.
Previous wording
General and administrative expense increased by $10.5 million, or 35%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023. The increase in general and administrative expense was primarily driven by a $7.0 million increase in personnel-related costs driven by an increase in headcount. Additionally, we recorded a $3.7 million impairment loss on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use and determined to sublease during the three months ended October 31, 2024.
Current wording
General and administrative expense increased by $16.4 million, or 38%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024. The increase in general and administrative expense was primarily driven by a $20.6 million increase in personnel-related costs primarily driven by an increase of $18.0 million in stock-based compensation. The increase in stock-based compensation includes $13.1 million related to performance-based RSUs granted to our Co-Founders in October 2024. In addition, our allowance for credit losses increased $2.9 million for the three months ended April 30, 2025, compared to the three months ended April 30, 2024 as we further integrated acquired businesses and aligned our processes. These increases were partially offset by a decrease of $5.9 million of impairment losses on operating lease assets and related property and equipment for a portion of our headquarters space that weceased to use. Additionally, the three months ended April 30, 2024 included acquisition-related costs of $2.1 million.
Previous wording
Our provision for income taxes decreased by $0.6 million, or 61%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023. The change was primarily driven by a merger of a previously acquired subsidiary during the three months ended October 31, 2024 resulting in the release of valuation allowance as the deferred tax liabilities of the acquired subsidiary are an available source of income to realize our deferred tax assets.
Current wording
Our provision for income taxes decreased by $0.2 million, or 42%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. The change was primarily driven by a decrease in certain state taxes for the three months ended April 30, 2025.
Previous wording
In addition to our results prepared in accordance with GAAP, we believe non-GAAP gross profit and non-GAAP gross margin in total and for platform and professional services and other, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income (loss) from operations, non-GAAP net loss, and non-GAAP operating margin are useful in evaluating our operating performance.
Current wording
In addition to our results prepared in accordance with GAAP, we believe non-GAAP gross profit and non-GAAP gross margin in total and for platform and professional services and other, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, and non-GAAP net income are useful in evaluating our operating performance.
Previous wording
Stock-based compensation expense and related employer payroll taxes. We exclude stock-based compensation expense and related employer payroll taxes to allow investors to make more meaningful comparisons of our performance between periods and to facilitate a comparison of our performance to those of other peer companies. Stock-based compensation expense may vary between periods due to various factors unrelated to our core performance, including as a result of the assumptions used in the valuation methodologies, timing and amount of grants and other factors. We exclude employer payroll taxes because the amounts vary based on timing and settlement or vesting of awards unrelated to our core operating performance. Moreover, stock-based compensation expense is a non-cash expense that we exclude from our internal management reporting processes and when assessing our actual performance, budgeting, planning, and forecasting future periods.
Current wording
Stock-based compensation expense and related employer payroll taxes. We exclude stock-based compensation expense, including the performance-based RSU’s granted to our Co-Founders, and related employer payroll taxes, to allow investors to make more meaningful comparisons of our performance between periods and to facilitate a comparison of our performance to those of other peer companies. Stock-based compensation expense may vary between periods due to various factors unrelated to our core performance, including as a result of the assumptions used in the valuation methodologies, timing and amount of grants and other factors. We exclude employer payroll taxes because the amounts vary based on timing and settlement or vesting of awards unrelated to our core operating performance. Moreover, stock-based compensation expense is a non-cash expense that we exclude from our internal management reporting processes and when assessing our actual performance, budgeting, planning, and forecasting future periods.
Previous wording
Restructuring charges. To better align our strategic priorities with our investments, we implemented workforce reductions in fiscal 2024 and fiscal 2025. In connection with these reductions, we incurred employee-related expenses including severance and other termination benefits. We excluded these charges when assessing our actual performance and when budgeting, planning and forecasting future periods.
Current wording
Restructuring charges. To better align our strategic priorities with our investments, we have periodically implemented workforce reductions. In connection with these reductions, we incurred employee-related expenses including severance and other termination benefits. We excluded these charges when assessing our actual performance and when budgeting, planning and forecasting future periods.
Previous wording
Loss on operating lease assets. In fiscal 2024 and fiscal 2025, we incurred a impairments on certain right-of-use assets and other long-lived assets. See Note 2 of our audited consolidated financial statements included in our Prospectus and Note 5 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report. We believe that it is useful to exclude these charges when assessing the level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. In addition, we believe excluding such costs enhances the comparability between periods.
Current wording
Loss on operating lease assets. We have incurred impairments on certain right-of-use assets and other long-lived assets. See Note 5 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report. We believe that it is useful to exclude these charges when assessing the level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. In addition, we believe excluding such costs enhances the comparability between periods.
Previous wording
These measures, however, have certain limitations in that they reflect the exercise of judgment by our management about which expenses are excluded or included and do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our financial results determined in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income (loss) from operations and non-GAAP operating margin may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these non-GAAP financial measures in the same manner.
Current wording
These measures, however, have certain limitations in that they reflect the exercise of judgment by our management about which expenses are excluded or included and do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our financial results determined in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, and non-GAAP net income may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these non-GAAP financial measures in the same manner.
Previous wording
We define non-GAAP income (loss) from operations and non-GAAP operating margin as GAAP loss from operations and GAAP operating margin, respectively, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, restructuring charges, acquisition-related items, and loss on operating lease assets. Non-GAAP operating margin represents non-GAAP income (loss) from operations as a percentage of total revenue.
Current wording
We define non-GAAP income from operations and non-GAAP operating margin as GAAP loss from operations and GAAP operating margin, respectively, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, restructuring charges, acquisition-related items, and loss on operating lease assets. Non-GAAP operating margin represents non-GAAP income from operations as a percentage of total revenue.
Previous wording
The following table reflects the reconciliation of GAAP loss from operations to non-GAAP income (loss) from operations and GAAP operating margin to non-GAAP operating margin for the periods presented:
Current wording
The following table reflects the reconciliation of GAAP loss from operations to non-GAAP income from operations and GAAP operating margin to non-GAAP operating margin for the periods presented:
Previous wording
We define non-GAAP net income (loss) as GAAP net loss, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, restructuring charges, acquisition-related items, and loss on operating lease assets, adjusted for the income tax effects on the difference between GAAP and non-GAAP expenses.
Current wording
We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, restructuring charges, acquisition-related items, and loss on operating lease assets, adjusted for the income tax effects on the difference between GAAP and non-GAAP expenses.
Previous wording
(1) This amount represents adjustments for the current and deferred income tax effects on non-GAAP net income (loss) for the impact of the non-GAAP adjustments above.
Current wording
(1) This amount represents adjustments for the current and deferred income tax effects on non-GAAP net income for the impact of the non-GAAP adjustments above.
Previous wording
Since our inception, we have financed our operations, capital expenditures and acquisitions primarily through issuance of redeemable convertible preferred stock, non-convertible preferred stock, and debt as well as through payments received from our customers. As of October 31, 2024, we had cash and cash equivalents of $133.8 million and $70.0 million available under the Credit Agreement, as defined below. Cash and cash equivalents consisted of checking accounts and money market funds with maturities less than 90 days from the date of purchase.
Current wording
Since our inception, we have financed our operations, capital expenditures and acquisitions primarily through issuance of redeemable convertible preferred stock, non-convertible preferred stock, and debt as well as through payments received from our customers. As of April 30, 2025, we had cash and cash equivalents of $420.3 million and $140.0 million available under the Credit Agreement, as defined below. Cash and cash equivalents consisted of checking accounts and money market funds with maturities less than 90 days from the date of purchase.
Previous wording
In January 2023, we entered into a secured credit agreement with Wells Fargo Bank N.A., as administrative agent and collateral agent, and certain lenders. In September 2024, we entered into an amendment to the secured credit agreement, effective October 1, 2024 (as amended, the“Credit Agreement”) that converted our existing term loan balance of $177.3 million and $70.0 million revolver facility to a term loan of $107.3 million (as amended, the“Term Loan”) and a revolver facility of $140.0 million (as amended, the“Revolver Facility”). The initial outstanding balance under the Revolver Facility was $70.0 million. The Credit Agreement contains the standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants set forth minimum revenue thresholds, require the maintenance of minimum liquidity and establish certain limits to our and our subsidiaries’ ability to create or incur liens on assets, make acquisitions of or investments in businesses, engage in any material line of business substantially different from our current lines of business, incur additional indebtedness or contingent obligations, sell or dispose of assets, pay dividends and make loans or advances to employees.
Current wording
In January 2023, we entered into a secured credit agreement with Wells Fargo Bank N.A., as administrative agent and collateral agent, and certain lenders. In September 2024, we entered into an amendment to the secured credit agreement, effective October 1, 2024 (as amended, the “Credit Agreement”) that converted our existing term loan balance of $177.3 million and $70.0 million revolver facility to a term loan of $107.3 million (as amended, the“Term Loan”) and a revolver facility of $140.0 million, of which $70.0 million was initially drawn (as amended, the“Revolver Facility”). In January 2025 we repaid all amounts outstanding under the Revolver Facility. The Credit Agreement contains the standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants set forth minimum revenue thresholds, require the maintenance of minimum liquidity and establish certain limits to our and our subsidiaries’ ability to create or incur liens on assets, make acquisitions of or investments in businesses, engage in any material line of business substantially different from our current lines of business, incur additional indebtedness or contingent obligations, sell or dispose of assets, pay dividends and make loans or advances to employees.
Previous wording
Net cash provided by operating activities was $21.6 million for the nine months ended October 31, 2024. This primarily related to our non-cash charges of $184.9 million, adjusted for our net loss of $138.2 million and net cash outflows of $25.2 million from changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities related to an increase in deferred contract costs and contract assets of $15.1 million, an increase in accounts receivable of $13.6 million, a decrease of lease liabilities of $7.8 million, and a decrease in accounts payable and other accrued expenses of $4.4 million. These were partially offset by an increase in accrued personnel related expenses of $9.1 million, a decrease in prepaid expenses and other current assets of $3.3 million, an increase in deferred revenue of $2.6 million, and an increase in other liabilities of $1.4 million.
Current wording
Net cash used in operating activities was $14.6 million for the three months ended April 30, 2025. This primarily related to our net loss of $46.4 million and net cash outflows of $49.1 million from changes in our operating assets and liabilities. These were partially offset by non-cash charges of $80.9 million. The primary drivers of the changes in our operating assets and liabilities related to a decrease in accrued personnel related expenses of $40.6 million as annual corporate bonuses are paid in the first fiscal quarter, an increase in deferred contract costs and contract assets of $7.1 million, an increase of $5.3 million in accounts receivable, and a decrease of lease liabilities of $3.2 million. These were partially offset by an increase of $4.0 million in accounts payable and other accrued expenses, a decrease in prepaid expenses and other assets of $2.2 million and an increase in other liabilities of $1.2 million.
Previous wording
Net cash used in operating activities was $45.6 million for the nine months ended October 31, 2023. This primarily related to our net loss of $143.7 million, adjusted for non-cash charges of $145.9 million and net cash outflows of $47.7 million for changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities related to an increase in deferred contract costs and contract assets of $18.3 million, a decrease in accrued personnel related expenses of $13.4 million, an increase in accounts receivable of $6.3 million, a decrease of lease liabilities of $6.1 million, a decrease in accounts payable and other accrued expenses of $3.5 million, and a decrease in other liabilities of $1.6 million. These were partially offset by a decrease in prepaid expenses and other current assets of $1.2 million.
Current wording
Net cash used in operating activities was $19.2 million for the three months ended April 30, 2024. This primarily related to our net loss of $56.0 million, adjusted for non-cash charges of $65.6 million and net cash outflows of $28.8 million for changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities related to a decrease in accrued personnel related expenses of $27.2 million as annual corporate bonuses are paid in the first fiscal quarter, an increase in accounts receivable of $4.6 million, an increase in deferred contract costs and contract assets of $3.2 million, and a decrease in lease liabilities of $1.0 million. These were partially offset by an increase of $4.3 million in accounts payable and other accrued expenses, a decrease in prepaid expenses and other assets of $2.2 million and an increase in other liabilities of $0.9 million.
Previous wording
Net cash used in investing activities was $35.0 million for the nine months ended October 31, 2023. This consisted of cash outflows of $23.4 million for the purchase of property and equipment and $12.8 million for the investments in capitalized internal-use software. These were partially offset by the receipt of an employee loan repayment of $1.5 million.
Current wording
Net cash used in investing activities was $7.8 million for the three months ended April 30, 2025. This consisted of cash outflows of $6.5 million for the investments in capitalized internal-use software and $1.3 million for the purchase of property and equipment.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Grow with Our Customers. Our long-term revenue growth is correlated with the success of customers on our platform, and we strive to support the growth of their businesses. We can improve outcomes for our customers across every stage of the go-to-market funnel, from determining which end customers to target, marketing to those end customers effectively and converting and retaining end customers.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
We have two general categories of revenue: (i) platform revenue and (ii) professional services and other revenue.
Previous report — wording carried elsewhere
Platform Revenue. The substantial majority of our revenue is platform revenue, which we generate through (a) subscription revenue generated from access to and use of our platform, including subscriptions to our Core and certain Pro products, and (b) usage-based revenue generated from the transactions using our FinTech solutions and usage of certain Pro products and other usage-based services. Our customer contracts are generally based on the number of users, mix of products, number of end customers and the amount of GTV. Platform revenue is generated through the following:
Previous report — wording carried elsewhere
The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated:
Previous report — wording carried elsewhere
Platform revenue increased by $111.6 million, or 26%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. This increase was primarily driven by subscription revenue which increased by $86.9 million, or 27%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. In addition, revenue from our usage-based products increased by $24.7 million, or 23%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. This increase was primarily driven by increases in both the volume and types of payment transactions processed using our FinTech offerings.