DOMO INC

Previous wording

We founded Domo in 2010 with the vision of digitally connecting everyone within the enterprise with real-time, rich, relevant data and then enabling all employees to collaborate and act on that data. We realized that many organizations were unable to access the massive amounts of data that they were collecting in siloed cloud applications and on-premise databases. Furthermore, even for organizations that were capable of accessing their data, the process for doing so was time-consuming, costly, and often resulted in the data being out-of-date by the time it reached decision makers. The delivery format, including alert functionality, and devices were not adequate for the connected and real-time mobile workforce. Based on these observations, it was apparent that all organizations, regardless of size or industry, were failing to unlock the power of all of their people, data, and systems. To address these challenges, we provide a modern cloud-based data experience platform that digitally connects everyone at an organization – from the CEO to frontline employees – with all the people, data and systems in an organization, giving them access to real-time data and insights and allowing them to put data to work for everyone so they can multiply their impact on the business.

Current wording

We founded Domo in 2010 with the vision of digitally connecting everyone within the enterprise with real-time, rich, relevant data and then enabling all employees to collaborate and act on that data. We realized that many organizations were unable to access the massive amounts of data that they were collecting in siloed cloud applications and on-premise databases. Furthermore, even for organizations that were capable of accessing their data, the process for doing so was time-consuming, costly, and often resulted in the data being out-of-date by the time it reached decision makers. The delivery format, including alert functionality, and devices were not adequate for the connected and real-time mobile workforce. Based on these observations, it was apparent that all organizations, regardless of size or industry, were failing to unlock the power of all of their people, data, and systems. To address these challenges, we provide a modern cloud-based AI and data products platform that digitally connects everyone at an organization – from the CEO to frontline employees – with all the people, data and systems in an organization, giving them access to real-time data and insights and allowing them to build data products that generate measurable value for the business.

Previous wording

We typically offer our platform to our customers as a subscription-based service. Subscription fees are based upon the chosen Domo package which includes tier-based platform capabilities or usage. Business leaders, department heads and managers are the typical initial subscribers to our platform, deploying Domo to solve a business problem or to enable departmental access. Over time, as customers recognize the value of our platform, we engage with CIOs and other executives to facilitate broad enterprise adoption.

Current wording

Business leaders, department heads and managers are the typical initial subscribers to our platform, deploying Domo to solve a business problem or to enable departmental access. Over time, as customers recognize the value of our platform, we engage with CIOs and other executives to facilitate broad enterprise adoption.

Previous wording

We recently began offering our platform as a consumption-based service. 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. We expect an increase in the number of consumption-based agreements 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

We primarily offer our platform as a consumption-based service, which includes consumption-based agreements and enterprise-wide agreements (ELAs) with unlimited users and a data cap. Customers with consumption-based agreements have an annual purchase commitment based on an estimated volume of usage, utilizing a tiered pricing structure, which is paid upfront. We believe a consumption-based service offering helps increase customer adoption and allows 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 this offering has potential to remove many of the barriers of adoption and better align our pricing to the value delivered to our customers. Historically, we have offered our platform to our customers as a subscription-based service. Subscription fees are based upon the chosen Domo package which includes tier-based platform capabilities or usage. As of the end of our most recent fiscal quarter, more than 68% of our annual recurring revenue (ARR) was utilizing the platform as a consumption-based service, and we expect this percentage to increase in future periods.

Previous wording

As of January 31, 2024, 66% of our customers were under multi-year contracts on a dollar-weighted basis compared to 65% and 62% of customers as of January 31, 2023 and 2022, respectively. 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 January 31, 2025, 69% of our customers were under multi-year contracts on a dollar-weighted basis compared to 66% and 65% of customers as of January 31, 2024 and 2023, respectively. The high percentage revenue from multi-year contracts, among both new and existing customers, has enhanced the predictability of our subscription revenue, which includes both subscription-based and consumption-based agreements. 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 January 31, 2024 total RPO was$373.3 million. The amount of RPO expected to be recognized as revenue in the next twelve months was $241.2 million as of January 31, 2024.

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 January 31, 2024 and 2025, total RPO was $373.3 million and $423.8 million, respectively. The amount of RPO expected to be recognized as revenue in the next twelve months was $241.2 million and $242.2 million as of January 31, 2024 and 2025, respectively.

Previous wording

From inception through January 31, 2024, we have invested $824.1 million in the development of our platform. As of January 31, 2024, we had 272 employees in our research and development organization. While we expect to continue to invest in research and development, we anticipate that these investments as a percentage of revenue will likely increase slightly in the short term then remain consistent over time.

Current wording

From inception through January 31, 2025, we have invested $920.0 million in the development of our platform. As of January 31, 2025, we had 275 employees in our research and development organization. While we expect to continue to invest in research and development, we anticipate that these investments as a percentage of revenue will likely remain consistent over time.

Previous wording

For the years ended January 31, 2022, 2023 and 2024, we had total revenue of $258.0 million, $308.6 million and $319.0 million, respectively, representing year-over-year growth of 20% and 3% for the years ended January 31, 2023 and 2024, respectively. Our enterprise customers generated revenue of $143.6 million, $160.6 million, and $155.7 million for the years ended January 31, 2022, 2023 and 2024, respectively, or year-over-year growth of 12% and decline of 3%, respectively. Our corporate customers generated revenue of $114.4 million, $148.0 million, and $163.3 million for the years ended January 31, 2022, 2023 and 2024, respectively, or year-over-year growth of 29% and 10%, respectively.

Current wording

For the years ended January 31, 2023, 2024 and 2025, we had total revenue of $308.6 million, $319.0 million and $317.0 million, respectively, representing year-over-year growth of 3% and decline of 1% for the years ended January 31, 2024 and 2025, respectively. Our enterprise customers generated revenue of $160.7 million, $155.8 million, and $145.0 million for the years ended January 31, 2023, 2024 and 2025, respectively, or year-over-year decline of 3% and 7%, respectively. Our corporate customers generated revenue of $147.9 million, $163.2 million, and $172.0 million for the years ended January 31, 2023, 2024 and 2025, respectively, or year-over-year growth of 10% and 5%, respectively.

Previous wording

For the years ended January 31, 2022, 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 77%, 78% and 79% of our total revenue for the years ended January 31, 2022, 2023 and 2024, respectively.

Current wording

For the years ended January 31, 2023, 2024 and 2025, 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 78%, 79% and 80% of our total revenue for the years ended January 31, 2023, 2024 and 2025, respectively.

Previous wording

Notwithstanding our ongoing shift to a consumption-based pricing model, we expect our revenue to be negatively impacted in the near term, due in part to the effects of the macroeconomic environment which has elongated the software sales cycle, increased deal scrutiny, and made renewal discussions more challenging. These factors have had a greater impact on our enterprise customers as evidenced by our declining enterprise revenue, and we expect it to continue to decline in the near term. In response to these dynamics, we have taken and intend to continue to take steps to better align our sales team and focus on controlling costs, which we expect will result in improved margins, sustained positive cash flow and efficient growth in the long term.

Current wording

As a result of the effects of the macroeconomic environment, which has elongated the software sales cycle, increased deal scrutiny, and made renewal discussions more challenging, our revenue growth may be negatively impacted in the near term. In response to these dynamics, we have taken and intend to continue to take steps to better align our sales team and focus on controlling costs, which we expect will result in improved margins, sustained positive cash flow and efficient growth in the long term.

Previous wording

We have incurred significant net losses since our inception, including net losses of $102.1 million, $105.6 million and $75.6 million for the years ended January 31, 2022, 2023 and 2024, respectively, and had an accumulated deficit of $1,405.6 million at January 31, 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 $105.6 million, $75.6 million and $81.9 million for the years ended January 31, 2023, 2024 and 2025, respectively, and had an accumulated deficit of $1,487.5 million at January 31, 2025. 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 existing and potential customers to reduce or delay technology spending or, seek payment or other concessions from us, which may materially and negatively impact our operating results, financial condition and prospects. Furthermore, the United States has been experiencing historically elevated rates of inflation. This 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 January 31, 2024, we had over 2,600 customers. Enterprise customers accounted for 56%, 52% and 49% of our revenue for the years ended January 31, 2022, 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.

Current wording

As of January 31, 2025, we had over 2,600 customers. Enterprise customers accounted for 52%, 49% and 46% of our revenue for the years ended January 31, 2023, 2024 and 2025, 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 all features offered on our platform, which allows 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 gross retention rate was 90%, 89% and 86% for the 12 months ended January 31, 2022, 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 gross retention rate was 89%, 86% and 85% for the 12 months ended January 31, 2023, 2024 and 2025, respectively. Our gross retention has declined in part due to macroeconomic conditions and challenging renewals from customers with COVID-19 use cases of our platform.

Previous wording

In fiscal 2024 our net retention trended lower as a result of slowing growth in upsells. Gross retention declined in part due to macroeconomic conditions and challenging renewals from customers with COVID-19 use cases of our platform. As we continue to enhance our product and develop methods to encourage wider and more strategic adoptions, we expect that customer retention will increase over the long term. Our ability to successfully upsell and the impact of cancellations may vary from period to period. The extent of this variability depends on a number of factors including the size and timing of upsells and cancellations relative to the initial subscriptions.

Current wording

As we continue to expand our partner ecosystem and develop methods to encourage wider and more strategic adoptions, we expect that customer retention will increase over the long term. Our ability to successfully upsell and the impact of cancellations may vary from period to period. The extent of this variability depends on a number of factors including the size and timing of upsells and cancellations relative to the initial subscriptions.

Previous wording

Sales and marketing expense as a percentage of total revenue was 56% and 56% for the years ended January 31, 2022 and 2023, respectively, compared to 51% for the year ended January 31, 2024.

Current wording

Sales and marketing expense as a percentage of total revenue was 56% and 51% for the years ended January 31, 2023 and 2024, respectively, compared to 48% for the year ended January 31, 2025.

Previous wording

Research and development expense as a percentage of total revenue was 31% and 31% for the years ended January 31, 2022 and 2023, respectively, compared to 27% for the year ended January 31, 2024.

Current wording

Research and development expense as a percentage of total revenue was 31% and 27% for the years ended January 31, 2023 and 2024, respectively, compared to 28% for the year ended January 31, 2025.

Previous wording

Billings represent our total revenue plus the change in deferred revenue in a period. Billings reflect sales to new customers plus subscription renewals and upsells to existing customers, and represent amounts invoiced for subscription, support and professional services. We typically invoice our customers annually in advance for subscriptions to our platform. Because we generate most of our revenue from customers who are invoiced on an annual basis and have a wide range of annual contract values, we may experience variability due to typical enterprise buying patterns and timing of large initial contracts, renewals and upsells.

Current wording

Billings represent our total revenue plus the change in deferred revenue in a period. Billings reflect sales to new customers plus subscription renewals and upsells to existing customers, and represent amounts invoiced for subscription, support and professional services. We typically invoice our customers annually in advance for subscriptions to our platform.

Previous wording

There is a disproportionate weighting toward annual billings in the fourth quarter, primarily as a result of large enterprise account buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year-on-year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings. The timing of renewal billings may vary due to our customers' requests to align end dates on multiple subscription contracts. The sequential quarterly changes in billings, accounts receivable, and deferred revenue during the fourth quarter of our fiscal year are not necessarily indicative of the billing activity that occurs for the following quarters.

Current wording

There is a disproportionate weighting toward annual billings in the fourth quarter, primarily as a result of large enterprise account buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year-on-year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings. The recent decline in our annual billings is primarily due to a decrease in our gross retention and ARR net retention rates. Our ARR net retention has increased sequentially for two consecutive quarters, and we expect this trend to continue as average contract length increases, customers with consumption-based agreements become a larger percentage of our renewal base, and our partner ecosystem expands.

Previous wording

We derive our revenue primarily from subscription revenue, which consists of subscription-based agreements and, to a lesser extent, consumption-based agreements for our cloud-based platform. We also sell professional services.

Current wording

We derive our revenue primarily from subscription revenue, which consists of consumption-based agreements and subscription-based agreements for our cloud-based platform. We also sell professional services.

Previous wording

Revenue from subscription-based agreements is a function of customers, platform tier, number of users, price per user, and transaction and data volumes. Revenue is recognized ratably over the related contractual term beginning on the date that the platform is made available to a customer. We recognize revenue ratably because the customer receives and consumes the benefits of the platform throughout the contract period. Consumption-based agreements utilize a tiered pricing structure for an annual purchase commitment based upon an estimated volume of usage. Revenue from the annual purchase commitment in consumption-based contracts is also recognized ratably over the related contractual term of the contract. Amounts for the annual purchase commitments do not carry over beyond each annual commitment period.

Current wording

Consumption-based agreements utilize a tiered pricing structure for an annual purchase commitment based upon an estimated volume of usage. Revenue from the annual purchase commitment in consumption-based agreements is recognized ratably over the related contractual term of the contract. Amounts for the annual purchase commitments do not carry over beyond each annual commitment period. Revenue from subscription-based agreements is a function of customers, platform tier, number of users, price per user, and transaction and data volumes. Revenue is recognized ratably over the related contractual term beginning on the date that the platform is made available to a customer. We recognize revenue ratably because the customer receives and consumes the benefits of the platform throughout the contract period.

Previous wording

Other expense, net consists primarily of interest expense related to long-term debt, It also includes the effect of exchange rates on foreign currency transaction gains and losses, foreign currency gains and losses upon remeasurement of intercompany balances, and interest income. The transactional impacts of foreign currency are recorded as foreign currency losses (gains) in the consolidated statements of operations.

Current wording

Total other expense, net consists of loss on extinguishment of debt and other expense, net. Other expense, net consists primarily of interest expense related to long-term debt. It also includes the effect of exchange rates on foreign currency transaction gains and losses, foreign currency gains and losses upon remeasurement of intercompany balances, and interest income. The transactional impacts of foreign currency are recorded as foreign currency losses (gains) in the consolidated statements of operations.

Previous wording

(2)Includes executive officer severance as follows:

Current wording

(3)Includes executive officer severance as follows:

Previous wording

The increase in subscription revenue was primarily due to a $25.8 million increase from new customers and a $11.6 million net decrease from existing customers. Our customer count increased 3% from January 31, 2023 to January 31, 2024. For the purpose of this comparison, new customers are defined as those added since the end of the prior year quarter. Revenue from existing customers is presented net of churn. The decrease in professional services and other revenue was primarily due to a higher amount of revenue recognized from the delivery of custom apps and a higher volume of billable hours delivered during the year ended January 31, 2023. For fiscal 2025 we expect that total revenue will be flat compared to fiscal 2024.

Current wording

The increase in subscription revenue, which includes both consumption-based and subscription-based agreements, was primarily due to a $16.8 million increase from new customers and a $16.3 million net decrease from existing customers. Our customer count decreased 2% from January 31, 2024 to January 31, 2025. For the purpose of this comparison, new customers are defined as those added since the end of the prior year. 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 year ended January 31, 2025. For fiscal 2026 we expect that total revenue will be approximately flat compared to fiscal 2025.

Previous wording

The increase in cost of subscription revenue was primarily due to a $3.5 million increase in our third-party web hosting services, partially offset by a $1.9 million decrease in data center costs. Costs related to fees paid to third parties for use of their technology and services increased by $1.4 million.

Current wording

The increase in cost of subscription revenue was primarily due to a $4.6 million increase in our third-party web hosting services. Amortization related to capitalized software development costs increased by $2.2 million and employee-related costs increased by $1.3 million. Costs related to fees paid to third parties for use of their technology and services decreased by $0.6 million.

Previous wording

The decrease in cost of professional services and other revenue is primarily due to a $1.8 million decrease in employee-related costs, partially offset by a $1.5 million increase in outsourced services.

Current wording

The decrease in cost of professional services and other revenue is primarily due to a $1.4 million decrease in outsourced services and a $0.7 million decrease in employee-related costs.

Previous wording

We expect subscription gross margin to remain relatively flat in the near term.

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. 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 the timing of the delivery of custom apps and a higher volume of hours delivered by partners during the year ended January 31, 2024. We expect the gross margin for professional services and other 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 remained flat. We expect the gross margin for professional services and other 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.

Previous wording

The decrease in sales and marketing expenses was primarily due to a $5.0 million decrease in employee-related costs. Marketing expenses decreased by $2.5 million primarily due to a decrease in demand generation. Sales and marketing expense as a percentage of total revenue decreased from 56% in the year ended January 31, 2023 to 51% in the year ended January 31, 2024. We expect sales and marketing expense as a percentage of revenue to remain consistent in the near term and decrease in the long term.

Current wording

The decrease in sales and marketing expenses was primarily due to a $13.3 million decrease in employee-related costs. Sales and marketing expense as a percentage of total revenue decreased from 51% in the year ended January 31, 2024 to 48% in the year ended January 31, 2025. 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 $6.6 million decrease in employee-related costs. Capitalized software increased by $2.0 million, which decreases expense. Research and development expense as a percentage of revenue decreased from 31% in the year ended January 31, 2023 to 27% in the year ended January 31, 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 $4.3 million increase in employee-related costs and a $0.7 million decrease in capitalized software, which increases expense. These increases were partially offset by a $1.9 million decrease in contract labor. Research and development expense as a percentage of revenue increased from 27% in the year ended January 31, 2024 to 28% in the year ended January 31, 2025. We expect research and development expense as a percentage of revenue to decrease in the long term.

Previous wording

General and administrative expenses decreased primarily due to a $5.5 million decrease in employee-related costs. Professional and legal expenses decreased by $1.5 million. General and administrative expenses as a percent of revenue decreased from 18% in the year ended January 31, 2023 to 15% in the year ended January 31, 2024. In the near term, we expect general and administrative expense as a percentage of revenue to fluctuate from period to period.

Current wording

General and administrative expenses increased primarily due to a $7.3 million increase in professional and legal fees. This was partially driven by a $2.4 million insurance reimbursement for legal fees that was realized during the year ended January 31, 2024 plus $1.5 million of costs related to the amendment to the credit facility that occurred during the year ended January 31, 2025. General and administrative expenses as a percent of revenue increased from 15% in the year ended January 31, 2024 to 17% in the year ended January 31, 2025. We expect general and administrative expense as a percentage of revenue to decrease in the near term and fluctuate from period to period in the long term.

Previous wording

Other expense, net increased due to a $3.8 million increase in interest expense. 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

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 increased primarily due to higher taxable income from our international subsidiaries during the year ended January 31, 2024. 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 deferred tax treatment of certain expenses from our international subsidiaries during the year ended January 31, 2025. In the long term, we expect income tax expense to increase in conjunction with higher taxable income from our international subsidiaries.

Previous wording

As of January 31, 2024, we had $60.9 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 January 31, 2024.

Current wording

As of January 31, 2025, we had $45.3 million of cash and cash equivalents, which were held for working capital purposes. Our cash and cash equivalents consist primarily of cash and money market funds. We have a $125.3 million credit facility, all of which had been drawn as of January 31, 2025.

Previous wording

In February 2024, we entered into an amendment to our credit facility which extended the maturity date for the outstanding loan from April 1, 2025 to April 1, 2026 and made certain adjustments to the financial covenant terms of the credit facility. In conjunction of this amendment, we issued 189,036 fully-vested warrants to purchase Class B common stock with an exercise price of $0.01 per share, adjusted for stock splits and combinations. These warrants have an expiration date of February 17, 2028. For more information, see Note 18 "Subsequent Events."

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 credit facility permits us to incur up to $100 million in term loan borrowings, all of which had been drawn as of January 31, 2024. During the fiscal year ended January 31, 2024, the term loan maturity date was April 1, 2025 with a closing fee of $7.0 million, which is in addition to the $5.0 million amendment fee described above. Each term loan requires that we pay only interest until the maturity date. A portion of the interest that accrues on the outstanding principal of each term loan is payable in cash on a monthly basis, which portion accrues 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% 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) the Federal Funds Effective Rate plus 0.5% and (c) Adjusted Term SOFR. As of January 31, 2024, the interest rate was approximately 11.1%. In addition to the 11.1%, a fixed rate equal to 2.5% per year accrues on the outstanding principal of each term loan and is added to the principal amount of the outstanding term loan on a monthly basis.

Current wording

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 January 31, 2025, accrued at a floating rate equal to the greater of (1) 8.0% and (2) Adjusted Term SOFR. Adjusted Term SOFR is defined as the greater of (a) 2.5% and (b) Term SOFR. 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 plus 1.00%. 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 January 31, 2025, the cash interest rate was approximately 7.5%. In addition to the 7.5% cash interest rate, a fixed rate equal to 5.0% 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 our business, merge with or acquire other entities, incur indebtedness or encumbrances, make distributions to holders of our capital stock, make investments or enter into transactions with affiliates. The credit facility is secured by substantially all of our assets. In addition, we are required to comply with a financial covenant based on the ratio of our outstanding indebtedness to our annualized recurring revenue. The maximum ratio is 0.500 on January 31, 2023 through the maturity date.

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 covenant (as defined by the credit facility), 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 covenant (as defined by the credit facility), which is tested quarterly, and adhere to a monthly minimum liquidity covenant (as defined by the credit facility) that requires unrestricted cash on a consolidated basis of $25.0 million deposited in pledged accounts located in the United States. 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 January 31, 2025.

Previous wording

Net cash used in financing activities for the year ended January 31, 2022 consisted primarily of $10.3 million used to repurchase shares for tax withholdings on release of restricted stock, offset by $5.6 million of proceeds received from stock option exercises and $4.1 million of proceeds from our employee stock purchase plan.

Current wording

Net cash provided by financing activities for the year ended January 31, 2025 consisted primarily of $52.8 million of debt proceeds, $12.7 million of proceeds from short-term payable financing, and $1.9 million of proceeds from shares issued in connection with our employee stock purchase plan, offset by $53.2 million of repayment of debt and related fees, $9.0 million of payments on short-term payable financing, and $0.8 million used to repurchase shares for tax withholdings on vesting of restricted stock.

Previous wording

Contractual obligations are cash that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business. Our primary commitment is related to obligations under our credit facility. For more information regarding our credit facility, see Note 11 "Credit Facility" to the consolidated financial statements in Item 8 of Part II. In addition, we have obligations under leases for office space. For more information regarding our lease obligations, see Note 8 "Leases" to the consolidated financial statements in Item 8 of Part II. We also have non-cancelable commitments related to our cloud infrastructure. As of January 31, 2024, we had contractual commitments of $75.0 million related to these services, $11.4 million of which is due in the next 12 months and the remaining balance due thereafter.

Current wording

Contractual obligations are cash that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business. Our primary commitment is related to obligations under our credit facility. For more information regarding our credit facility, see Note 11 "Credit Facility" to the consolidated financial statements in Item 8 of Part II. In addition, we have obligations under leases for office space. For more information regarding our lease obligations, see Note 8 "Leases" to the consolidated financial statements in Item 8 of Part II. We also have non-cancelable commitments related to our cloud infrastructure. As of January 31, 2025, we had contractual commitments of $52.3 million related to these services, $9.9 million of which is due in the next 12 months and the remaining balance due thereafter.

Previous wording

We derive revenue primarily from subscription revenue, which consists of subscription-based agreements and, to a lesser extent, consumption-based agreements to our cloud-based platform. We also sell professional services. Revenue is recognized when control of these services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those services, net of sales taxes.

Current wording

We derive revenue primarily from subscription revenue, which consists of consumption-based agreements and subscription-based agreements to our cloud-based platform. We also sell professional services. Revenue is recognized when control of these services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those services, net of sales taxes.