DOMO INC

Previous wording

Our consumption-based service offering continues to expand. Customers of our consumption-based service have an annual purchase commitment based on an estimated volume of usage, utilizing a tiered pricing structure. We believe this model could increase customer adoption and allow us to better land, expand, and retain customers over the long term, and thereby have a positive impact on sales and marketing productivity. We believe this has potential to remove many of the barriers to adoption and better align our pricing to the value delivered to our customers. In our current fiscal quarter, approximately 30% of our subscription revenue was on consumption-based agreements and we expect this percentage to increase in future periods. However, we have limited experience with consumption-based agreements and changes in our pricing and subscription models subject us to a number of uncertainties.

Current wording

Our consumption-based service offering continues to expand. Customers of our consumption-based service have an annual purchase commitment based on an estimated volume of usage, utilizing a tiered pricing structure. Whether it is a consumption-based agreement or an enterprise-wide subscription-based agreement (ELAs) with unlimited users and a data cap, we believe this could increase customer adoption and allow us to better land, expand, and retain customers over the long term, and thereby have a positive impact on sales and marketing productivity. We also believe these have potential to remove many of the barriers of adoption and better align our pricing to the value delivered to our customers. As of the end of our most recent fiscal quarter, more than 45% of our annual recurring revenue (ARR) is on consumption-based agreements or ELAs, and we expect this percentage to increase in future periods. However, we have limited experience with consumption-based agreements and changes in our pricing and subscription models subject us to a number of uncertainties.

Previous wording

As of April 30, 2024, 64% of our customers were under multi-year contracts on a dollar-weighted basis, compared to 66% of customers as of January 31, 2024. The high percentage revenue from multi-year contracts, among both new and existing customers, has enhanced the predictability of our subscription revenue. We typically invoice our customers annually in advance for subscriptions to our platform.

Current wording

As of July 31, 2024, 65% of our customers were under multi-year contracts on a dollar-weighted basis, compared to 66% of customers as of January 31, 2024. The high percentage revenue from multi-year contracts, among both new and existing customers, has enhanced the predictability of our subscription revenue. We typically invoice our customers annually in advance for subscriptions to our platform.

Previous wording

Remaining performance obligations (RPO) represents the remaining amount of revenue we expect to recognize from existing non-cancelable contracts, whether billed or unbilled. As of April 30, 2023 and 2024, total RPO was $356.7 million and $346.3 million, respectively. The amount of RPO expected to be recognized as revenue in the next twelve months was $237.5 million and $230.5 million as of April 30, 2023 and 2024, respectively.

Current wording

Remaining performance obligations (RPO) represents the remaining amount of revenue we expect to recognize from existing non-cancelable contracts, whether billed or unbilled. As of July 31, 2023 and 2024, total RPO was $357.6 million and $358.9 million, respectively. The amount of RPO expected to be recognized as revenue in the next twelve months was $232.1 million and $225.4 million as of July 31, 2023 and 2024, respectively.

Previous wording

We had total revenue of $79.5 million and $80.1 million for the three months ended April 30, 2023 and 2024, respectively, reflecting a year-over-year increase of 1%. For the three months ended April 30, 2023 and 2024, no single customer accounted for more than 10% of our total revenue, nor did any single organization when accounting for multiple subsidiaries or divisions which may have been invoiced separately. Revenue from customers with billing addresses in the United States comprised 79% and 80% or our total revenue for the three months ended April 30, 2023 and 2024, respectively.

Current wording

We had total revenue of $79.7 million and $78.4 million for the three months ended July 31, 2023 and 2024, respectively, reflecting a year-over-year decrease of 2%. For the six months ended July 31, 2023 and 2024, we had total revenue of $159.1 million and $158.5 million, respectively. For the six months ended July 31, 2023 and 2024, no single customer accounted for more than 10% of our total revenue, nor did any single organization when accounting for multiple subsidiaries or divisions which may have been invoiced separately. Revenue from customers with billing addresses in the United States comprised 79% and 80% or our total revenue for the three months ended July 31, 2023 and 2024, respectively.

Previous wording

We have incurred significant net losses since our inception, including net losses of $24.4 million and $26.0 million for the three months ended April 30, 2023 and 2024, respectively, and had an accumulated deficit of $1,431.6 million at April 30, 2024. We expect to incur losses for the foreseeable future and may not be able to achieve or sustain profitability.

Current wording

We have incurred significant net losses since our inception, including net losses of $16.1 million and $19.5 million for the three months ended July 31, 2023 and 2024, respectively, and had an accumulated deficit of $1,451.1 million at July 31, 2024. We expect to incur losses for the foreseeable future and may not be able to achieve or sustain profitability.

Previous wording

Prevailing macroeconomic conditions have impacted, and may continue to impact, our business and those of our customers in a manner that we may not be able to quantify or isolate from other drivers of our performance. Ongoing concerns about the health of the U.S. and global economies may cause certain of our current and potential customers to reduce or delay technology spending or seek payment or other concessions from us, all of which may materially and negatively impact our operating results, financial condition and prospects. The United States has been experiencing historically elevated rates of inflation. The recent inflationary environment may cause us to incur higher operating costs that we may not be able to recoup through the pricing of our platform, and may further contribute to reduced or delayed technology spend by our customers in an effort to mitigate their own rising costs.

Current wording

Prevailing macroeconomic conditions have impacted, and may continue to impact, our business and those of our customers in a manner that we may not be able to quantify or isolate from other drivers of our performance. Ongoing concerns about the health of the U.S. and global economies may cause certain of our current and potential customers to reduce or delay technology spending or seek payment or other concessions from us. These conditions, along with the ongoing uncertainty in the SaaS sector, may materially and negatively impact our operating results, financial condition and prospects.

Previous wording

As of April 30, 2024, we had over 2,600 customers. For the three months ended April 30, 2023 and 2024, our enterprise customers accounted for 49% and 47% of our revenue, respectively. To drive growth among both our enterprise and corporate customers, we intend to further develop our partner ecosystem by establishing agreements with more software resellers, systems integrators and other partners to provide broader customer and geographic coverage. We believe we are underpenetrated in the overall market and have significant opportunity to expand our customer base over time.

Current wording

As of July 31, 2024, we had over 2,600 customers. Enterprise customers accounted for 49% and 46% of our revenue for both the three and six months ended July 31, 2023 and 2024, respectively. To drive growth among both our enterprise and corporate customers, we intend to further develop our partner ecosystem by establishing agreements with more software resellers, systems integrators and other partners to provide broader customer and geographic coverage. We believe we are underpenetrated in the overall market and have significant opportunity to expand our customer base over time.

Previous wording

We employ a land, expand, and retain sales model, and our performance depends on our ability to retain customers and expand the use of our platform at existing customers over time. It currently takes multiple years for our customers to fully embrace the power of our platform. We believe that as customers deploy greater volumes and sources of data for multiple use cases, the unique features of our platform can address the needs of everyone within their organization. We are still in the early stages of expanding within many of our customers.

Current wording

We employ a land, expand, and retain sales model, and our performance depends on our ability to retain customers and expand the use of our platform at existing customers over time. It currently takes multiple years for our customers to fully embrace the power of our platform. We are still in the early stages of expanding within many of our customers. Under consumption-based pricing, our customers have access to enterprise-wide licenses, which allow for increased discoverability across the entire customer organization. We believe that as customers continue to deploy greater volumes and sources of data for multiple use cases under our consumption-based pricing model, the unique features of our platform can address the needs of everyone within their organization.

Previous wording

An important metric that we use to evaluate our performance in retaining customers is gross retention rate. We calculate our gross retention rate by taking the dollar amount of annual contract value (ACV) that renews in a given period divided by the ACV that was up for renewal in that same period. The ACV of multi-year contracts is also considered in the calculation based on the period in which the annual anniversary of the contract falls. Our trailing twelve month gross retention rate was 88% and 84% as of April 30, 2023 and 2024, respectively.

Current wording

An important metric that we use to evaluate our performance in retaining customers is gross retention rate. We calculate our gross retention rate by taking the dollar amount of annual contract value (ACV) that renews in a given period divided by the ACV that was up for renewal in that same period. The ACV of multi-year contracts is also considered in the calculation based on the period in which the annual anniversary of the contract falls. Our trailing twelve month gross retention rate was 88% and 84% as of July 31, 2023 and 2024, respectively. However, during the three months ended July 31, 2024 we saw a sequential improvement in gross retention, and for our consumption-based cohort, our gross retention is greater than 90%.

Previous wording

Sales and marketing expense as a percentage of total revenue was 54% for the three months ended April 30, 2023 compared to 53% for the three months ended April 30, 2024.

Current wording

Sales and marketing expense as a percentage of total revenue was 52% for the three months ended July 31, 2023 compared to 47% for the three months ended July 31, 2024.

Previous wording

We plan to continue to make investments in areas of our business to continue to expand our platform functionality. This may include investing in machine learning algorithms, predictive analytics, and other artificial intelligence technologies to create alerts, detect anomalies, optimize queries, and suggest areas of interest to help people focus on what matters most. These investments may also include extending the functionality and effectiveness of our platform through improvements to the Domo Appstore and developer toolkits, which enable customers and partners to quickly build and deploy custom applications. The amount of new investments as a percentage of revenue required to achieve our plans is expected to increase slightly in the near term then remain consistent in the near term.

Current wording

We plan to continue to make investments in areas of our business to continue to expand our platform functionality. This may include investing in machine learning algorithms, predictive analytics, and other artificial intelligence technologies to create alerts, detect anomalies, optimize queries, and suggest areas of interest to help people focus on what matters most. These investments may also include extending the functionality and effectiveness of our platform through improvements to the Domo Appstore and developer toolkits, which enable customers and partners to quickly build and deploy custom applications. The amount of new investments as a percentage of revenue required to achieve our plans is expected to increase slightly in the near term then remain consistent in the long term.

Previous wording

Research and development expense as a percentage of total revenue was 29% for the three months ended April 30, 2023 compared to 28% for the three months ended April 30, 2024.

Current wording

Research and development expense as a percentage of total revenue was 26% for the three months ended July 31, 2023 compared to 28% for the three months ended July 31, 2024.

Previous wording

The following table sets forth our billings for the three months ended April 30, 2023 and 2024:

Current wording

The following table sets forth our billings for the three and six months ended July 31, 2023 and 2024:

Previous wording

(2)Includes amortization of certain intangible assets of $20,000 and $0.1 million for the three months ended April 30, 2023 and 2024, respectively.

Current wording

(2)Includes amortization of certain intangible assets of $20,000 and $142,000 for the three months ended July 31, 2023 and 2024, respectively, and $40,000 and $284,000 for the six months ended July 31, 2023 and 2024, respectively.

Previous wording

(4)Includes remeasurement of warrant liability of $0.6 million million for the three months ended April 30, 2024.

Current wording

(4)Includes remeasurement of warrant liability of $0.1 million and $(0.4) million for the three and six months ended July 31, 2024.

Previous wording

The increase in subscription revenue was primarily due to a $5.0 million increase from new customers offset by a net $4.0 million decrease from existing customers. Our customer count increased 1% from April 30, 2023 to April 30, 2024. For the purpose of this comparison, new customers are defined as those added since the end of the prior year quarter. The decrease in professional services and other revenue was due to a higher amount of revenue recognized from the delivery of custom apps during the three months ended April 30, 2023. Due to the decline in gross retention, we expect revenue to decrease in the near term.

Current wording

The decrease in subscription revenue was primarily due to a $4.5 million net decrease from existing customers, partially offset by a $4.2 million increase from new customers. Our total customer count remained flat from July 31, 2023 to July 31, 2024. For the purposes of this comparison, new customers are defined as those added since the end of the prior year quarter, and revenue from existing customers is presented net of churn. The decrease in professional services and other revenue was primarily due to a lower volume of billable hours delivered during the three months ended July 31, 2024.

Previous wording

Professional services and other cost of revenue remained flat.

Current wording

The decrease in professional services and other cost of revenue was primarily due to a $0.5 million decrease in employee-related costs and a $0.3 million decrease in outsourced services.

Previous wording

Subscription gross margin declined primarily due to a decline in revenue growth and increased costs related to third-party web hosting services as a result of increased customer data usage. We expect subscription gross margin to decrease in the near term, and in the long term we expect it to increase and stabilize.

Current wording

Subscription gross margin decreased primarily due to a decline in revenue growth and increased costs related to third-party web hosting services as a result of increased customer data usage. As we continue to shift more of our customer base to consumption-based pricing, we expect subscription gross margin to stabilize in the near term and increase in the long term.

Previous wording

Services gross margin declined primarily due to a higher amount of revenue recognized from the delivery of custom apps during the three months ended April 30, 2023. We expect the gross margin for professional services to fluctuate from period to period due to changes in the proportion of services provided by third-party consultants, seasonality, and timing of projects with higher margins.

Current wording

Services gross margin declined primarily due to a lower volume of billable hours delivered. We expect the gross margin for professional services to fluctuate from period to period due to changes in the proportion of services provided by third-party consultants, seasonality, and timing of projects with differing margins.

Previous wording

Sales and marketing expenses decreased primarily due to a $3.1 million decrease in employee-related costs. This was partially offset by a $2.3 million increase in marketing expense, primarily driven by our annual user conference. Sales and marketing expense as a percentage of revenue decreased from 54% in the three months ended April 30, 2023 to 53% in the three months ended April 30, 2024. Due to our annual user conference and other seasonal expenses, sales and marketing expense is typically higher in the first fiscal quarter than in other quarters. We expect sales and marketing expense as a percentage of revenue to decrease in the long term.

Current wording

Sales and marketing expenses decreased primarily due to a $3.5 million decrease in employee-related costs, driven by lower headcount, and a $0.4 million decrease in travel expense. Our sales and marketing expense as a percentage of revenue decreased from 52% to 47%. We expect sales and marketing expense as a percentage of revenue to decrease in the long term.

Previous wording

Research and development expenses decreased primarily due to a $0.6 million decrease in contract labor. Research and development expense as a percentage of revenue decreased from 29% in the three months ended April 30, 2023 to 28% in the three months ended April 30, 2024. We expect research and development expense as a percentage of revenue to increase slightly in the near term and remain consistent in the long term.

Current wording

Research and development expenses increased primarily due to a $0.8 million increase in employee-related costs. Capitalized software decreased by $0.4 million, which increases expense. Our research and development costs increased as a percentage of revenue from 26% to 28%. We expect research and development as a percentage of revenue to increase slightly in the near term and remain consistent in the long term.

Previous wording

Other expense, net remained relatively flat. We expect interest expense to increase modestly due to an increasing principal balance and anticipated higher market interest rates. We expect foreign currency gains and losses could become more pronounced due to current market volatility.

Current wording

Other expense, net decreased primarily due to a $0.4 million decrease in expense related to changes in foreign exchange rates and higher balances of cash denominated in currencies other than the functional currency. We expect interest expense to increase modestly in the near term due to an increasing principal balance. We expect foreign currency gains and losses could become more pronounced due to current market volatility.

Previous wording

Income taxes decreased primarily due to adjustments related to filing certain tax returns. In the long term, we expect income tax expense to increase in conjunction with higher taxable income from our international subsidiaries.

Current wording

Income taxes decreased primarily due to decreased state tax expense during the three months ended July 31, 2024. In the long term, we expect income tax expense to increase in conjunction with higher taxable income from our international subsidiaries.

Previous wording

The increase in cost of subscription revenue was primarily due to a $1.3 million increase in third-party web hosting services and a $0.6 million increase in amortization of capitalized software development costs.

Current wording

The increase in cost of subscription revenue was due in part to a $2.4 million increase in expense related to third-party web hosting services. Amortization related to capitalized software development costs increased by $1.2 million.

Previous wording

As of April 30, 2024, we had $61.2 million of cash, cash equivalents, and restricted cash which were held for working capital purposes, of which $3.7 million was restricted cash. Our cash and cash equivalents consist primarily of cash, money market funds, and certificates of deposit. We have a $100 million credit facility, all of which had been drawn as of April 30, 2024.

Current wording

As of July 31, 2024, we had $55.7 million of cash, cash equivalents, and restricted cash which were held for working capital purposes, of which $3.7 million was restricted cash. Our cash and cash equivalents consist primarily of cash, money market funds, and certificates of deposit. We have a $100 million credit facility, all of which had been drawn as of July 31, 2024.

Previous wording

In February 2024, we entered into an amendment to the credit facility which extended the maturity date for the outstanding loan from April 1, 2025 to April 1, 2026 and made certain modifications to the financial covenants. In conjunction with this amendment, we issued fully-vested warrants to purchase Class B common stock.

Current wording

In February 2024, we entered into an amendment to the credit facility which extended the maturity date for the outstanding loan from April 1, 2025 to April 1, 2026 and made certain modifications to the financial covenants. In conjunction with this amendment, we issued 189,036 fully-vested warrants to purchase Class B common stock.

Previous wording

The term loan maturity date is April 1, 2026 and has a closing fee of $7.0 million. Additionally, we entered into an amendment in August 2020 that included an amendment fee of $5.0 million, which accrues interest at a rate of 9.5% per year and is due upon maturity. The credit facility requires interest-only payments on a portion of the accrued interest until the maturity date. This payable portion of the interest that accrues on the outstanding principal of the term loan is due in cash on a monthly basis, which, as of April 30, 2024, accrued at a floating rate equal to the greater of (1) 7.0% and (2) Adjusted Term SOFR plus 5.5% per year. Adjusted Term SOFR is defined as the greater of (a) 0.0% and (b) Term SOFR plus 0.26161%. In the event that SOFR is unavailable, interest will accrue at a floating rate equal to the greater of (1) 7.0% and (2) the Alternate Base Rate plus 2.75% per year. The Alternate Base Rate is defined as the greatest of (a) the Prime Rate (b) Federal Funds Effective Rate plus 0.5% and (c) Adjusted Term SOFR. The Federal Funds Effective rate is defined as the rate published by the Federal Reserve System as the overnight rate, or, if such rate is not so published, the average of the quotations for the day for such transaction received by Administrative Agent from three Federal funds brokers. As of April 30, 2024, the interest rate was approximately 11.1%. In addition to the 11.1% interest rate, a fixed rate equal to 2.5% per year accrues on the outstanding principal of the term loan. This capitalized portion of the interest is added to the principal amount of the outstanding term loan on a monthly basis and is due upon maturity.

Current wording

As of July 31, 2024, the term loan maturity date was April 1, 2026 and the term loan had a closing fee of $7.0 million. Additionally, we entered into an amendment in August 2020 that included an amendment fee of $5.0 million, which accrues interest at a rate of 9.5% per year and is due upon maturity. The credit facility requires interest-only payments on a portion of the accrued interest until the maturity date. This payable portion of the interest that accrues on the outstanding principal of the term loan is due in cash on a monthly basis, which, as of July 31, 2024, accrued at a floating rate equal to the greater of (1) 7.0% and (2) Adjusted Term SOFR plus 5.5% per year. As of July 31, 2024, Adjusted Term SOFR is defined as the greater of (a) 0.0% and (b) Term SOFR plus 0.26161%. In the event that SOFR is unavailable, interest will accrue at a floating rate equal to the greater of (1) 7.0% and (2) the Alternate Base Rate plus 2.75% per year. The Alternate Base Rate is defined as the greatest of (a) the Prime Rate (b) Federal Funds Effective Rate plus 0.5% and (c) Adjusted Term SOFR. The Federal Funds Effective rate is defined as the rate published by the Federal Reserve System as the overnight rate, or, if such rate is not so published, the average of the quotations for the day for such transaction received by Administrative Agent from three Federal funds brokers. As of July 31, 2024, the interest rate was approximately 11.1%, and in addition to the 11.1% interest rate, a fixed rate equal to 2.5% per year accrues on the outstanding principal of the term loan. This capitalized portion of the interest is added to the principal amount of the outstanding term loan on a monthly basis and is due upon maturity.

Previous wording

The credit facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict our ability to dispose of assets, make material changes to the nature, control or location of the business, merge with or acquire other entities, incur indebtedness or encumbrances, make distributions to holders of our capital stock, make certain investments or enter into transactions with affiliates. In addition, we are required to comply with a minimum annualized recurring revenue financial covenant, tested quarterly. The credit facility defines annualized recurring revenue as four times our aggregate revenue for the immediately preceding quarter (net of recurring discounts and discounts for periods greater than one year) less the annual contract value of any customer contracts pursuant to which we were advised during such quarter would not be renewed at the end of the current term plus the annual contract value of existing customer contract increases during such quarter. We are also required to comply with a minimum trailing 12-month consolidated EBITDA (as defined by the credit facility) covenant, which is tested quarterly, and adhere to a $15.0 million monthly minimum liquidity covenant. Noncompliance with these covenants, or the occurrence of certain other events specified in the credit facility, could result in an event of default under the loan agreement. If an event of default has occurred and we are unable to obtain a waiver, any outstanding principal, interest and fees could become immediately due and payable. We were in compliance with the covenant terms of the credit facility on January 31, 2024 and April 30, 2024.

Current wording

The credit facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict our ability to dispose of assets, make material changes to the nature, control or location of the business, merge with or acquire other entities, incur indebtedness or encumbrances, make distributions to holders of our capital stock, make certain investments or enter into transactions with affiliates. In addition, we are required to comply with a minimum annualized recurring revenue financial covenant, tested quarterly. The credit facility defines annualized recurring revenue as four times our aggregate revenue for the immediately preceding quarter (net of recurring discounts and discounts for periods greater than one year) less the annual contract value of any customer contracts pursuant to which we were advised during such quarter would not be renewed at the end of the current term plus the annual contract value of existing customer contract increases during such quarter. We are also required to comply with a minimum trailing 12-month consolidated EBITDA (as defined by the credit facility) covenant, which is tested quarterly, and adhere to a $15.0 million monthly minimum liquidity covenant. Pursuant to the Second Amendment, covenant levels for such minimum annualized recurring revenue financial covenant and such minimum consolidated EBITDA covenant were revised, and the minimum liquidity covenant was modified to a $25.0 million monthly minimum liquidity covenant. Noncompliance with these covenants, or the occurrence of certain other events specified in the credit facility, could result in an event of default under the loan agreement. If an event of default has occurred and we are unable to obtain a waiver, any outstanding principal, interest and fees could become immediately due and payable. We were in compliance with the covenant terms of the credit facility on January 31, 2024 and July 31, 2024.

Previous wording

Our operating activities consisted primarily of payments received from our customers, cash we invest in our personnel, timing and amounts we use to fund marketing programs and events to expand our customer base, and the costs to provide our cloud-based platform and related outsourced professional services to our customers.

Current wording

Our operating activities have consisted primarily of payments received from our customers, cash we invest in our personnel, timing and amounts we use to fund marketing programs and events to expand our customer base, and the costs to provide our cloud-based platform and related outsourced professional services to our customers.

Previous wording

Net cash provided by operating activities during the three months ended April 30, 2023 consisted of cash collected from customers of $93.6 million exceeding the cash outflows of $92.8 million. Significant components of cash outflows included $53.8 million for personnel costs and $18.0 million for marketing programs and events, third-party costs to provide our platform and outsourced professional services.

Current wording

Net cash provided by operating activities during the six months ended July 31, 2023 consisted of cash collected from customers of $169.7 million exceeding the cash outflows of $168.2 million. Significant components of cash outflows included $96.4 million for personnel costs and $35.1 million for marketing programs and events, third-party costs to provide our platform and outsourced professional services.

Previous wording

Net cash provided by operating activities during the three months ended April 30, 2024 consisted of cash collected from customers of $87.8 million exceeding the cash outflows of $85.9 million. Significant components of cash outflows included $49.6 million for personnel costs and $16.6 million for marketing programs and events, third-party costs to provide our platform and outsourced professional services.

Current wording

Net cash used in operating activities during the six months ended July 31, 2024 consisted of cash outflows of $160.6 million exceeding the $156.3 million collected from customers. Significant components of cash outflows included $89.9 million for personnel costs and $32.5 million for marketing programs and events, third-party costs to provide our platform and outsourced professional services.

Previous wording

Our investing activities consisted primarily of property and equipment purchases, which included capitalized development costs related to internal-use software.

Current wording

Our investing activities have consisted primarily of property and equipment purchases, which included capitalized development costs related to internal-use software.

Previous wording

Net cash used in investing activities during the three months ended April 30, 2023 consisted primarily of $2.1 million of capitalized development costs related to internal-use software and $1.5 million of purchased property and equipment.

Current wording

Net cash used in investing activities during the six months ended July 31, 2023 consisted primarily of $4.4 million of capitalized development costs related to internal-use software and $2.1 million of purchased property and equipment.

Previous wording

Net cash used in investing activities during the three months ended April 30, 2024 consisted primarily of 1.6 million of capitalized development costs related to internal-use software and $0.9 million of purchased property and equipment.

Current wording

Net cash used in investing activities during the six months ended July 31, 2024 consisted primarily of $3.5 million of capitalized development costs related to internal-use software and $1.2 million of purchased property and equipment.

Previous wording

Our financing activities consisted primarily of proceeds received from our employee stock purchase plan and stock option exercises.

Current wording

Our financing activities have consisted primarily of proceeds received from our employee stock purchase plan and to a lesser extent, stock option exercises, net change in short-term payable financing, and outflows used to repurchase shares for tax withholdings on vesting of restricted stock.

Previous wording

Net cash provided by financing activities for the three months ended April 30, 2023 consisted of $2.0 million of proceeds from shares issued in connection with our employee stock purchase plan.

Current wording

Net cash provided by financing activities for the six months ended July 31, 2023 consisted primarily of $2.0 million of proceeds from shares issued in connection with our employee stock purchase plan.

Previous wording

Net cash provided by financing activities for the three months ended April 30, 2024 consisted of $1.1 million of proceeds from shares issued in connection with our employee stock purchase plan.

Current wording

Net cash provided by financing activities for the six months ended July 31, 2024 consisted primarily of $2.8 million of proceeds from short-term payable financing, $1.1 million of proceeds from shares issued in connection with our employee stock purchase plan, offset by $0.2 million used to repurchase shares for tax withholdings on vesting of restricted stock.

Previous wording

We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that are inherently uncertain and that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Critical accounting policies and estimates are those that we consider critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (GAAP). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that are inherently uncertain and that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Critical accounting policies and estimates are those that we consider critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.