C3.ai, Inc.

Previous wording

We generate revenue primarily from the sale of subscriptions, which accounted for 93% and 86% of our total revenue in the three months ended October 31, 2025 and 2024, respectively, and 90% and 85% of our total revenue in the six months ended October 31, 2025 and 2024. Our cloud-native software offerings allow us to manage, update, and monitor the software regardless of whether the software is deployed in our public cloud environment, in our customers’ self-managed private or public cloud environments, or in a hybrid environment.

Current wording

We generate revenue primarily from the sale of subscriptions, which accounted for 90% and 87% of our total revenue in the three months ended January 31, 2026 and 2025, respectively, and 90% and 86% of our total revenue in the nine months ended January 31, 2026 and 2025. Our cloud-native software offerings allow us to manage, update, and monitor the software regardless of whether the software is deployed in our public cloud environment, in our customers’ self-managed private or public cloud environments, or in a hybrid environment.

Previous wording

We primarily recognize revenue from subscriptions on a ratable basis over the contract term or on a usage basis for consumption-based arrangements. We also recognize revenue upon delivery to the customer for software licenses that do not require maintenance and support services. In addition, customers typically pay a usage-based runtime fee for production use of our C3 AI Software for specified levels of capacity. Customers who choose to run the software in our cloud environment pay the hosting costs charged by our cloud providers. In the first quarter of fiscal year 2023, we introduced a consumption-based pricing model, beginning with an initial production deployment phase which may include access to the C3 Agentic AI Platform, one or more C3 AI Applications or C3 Generative AI, and C3 AI Center of Excellence, or COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges. Our subscriptions also include our maintenance and support services. Additionally, we offer premium stand-ready support services through our C3 AI COE which is included as part of the subscription when purchased.

Current wording

We primarily recognize revenue from subscriptions on a ratable basis over the contract term or on a usage basis for consumption-based arrangements. We also recognize revenue upon delivery to the customer for software licenses that do not require maintenance and support services. In addition, customers typically pay a usage-based runtime fee for production use of our C3 AI Software for specified levels of capacity. Customers who choose to run the software in our cloud environment pay the hosting costs charged by our cloud providers. We deploy a consumption-based pricing model, beginning with an initial production deployment phase which may include access to the C3 Agentic AI Platform, one or more C3 AI Applications or C3 Generative AI, and C3 AI Center of Excellence, or COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using virtual Central Processing Unit or vCPU and virtual Graphics Processing Unit or vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges. Our subscriptions also include our maintenance and support services. Additionally, we offer premium stand-ready support services through our C3 AI COE which is included as part of the subscription when purchased.

Previous wording

We also generate revenue from professional services, which primarily include prioritized engineering services and services fees. Professional services revenue represented 7% and 14% of our total revenue for the three months ended October 31, 2025 and 2024, respectively, and 10% and 15% of our total revenue in the six months ended October 31, 2025 and 2024, respectively.

Current wording

We also generate revenue from professional services, which primarily include prioritized engineering services and services fees. Professional services revenue represented 10% and 13% of our total revenue for the three months ended January 31, 2026 and 2025, respectively, and 10% and 14% of our total revenue in the nine months ended January 31, 2026 and 2025, respectively.

Previous wording

Prioritized engineering services are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. When we agree to this, we negotiate an agreed upon fee to accelerate the development of the software as well as other terms, such as relevant specifications. When the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product, and enhances the operation of that product going forward. Such prioritized engineering services result in production-level computer software-compiled code that enhances the functionality of our production products — which is available for our customers to use over the life of their software licenses. Prioritized engineering services revenue is recognized as professional services over the period in which the software development is completed. Prioritized engineering services revenue accounted for 80% and 73% of total professional services revenue for the three months ended October 31, 2025 and 2024, respectively, and 85% and 75% of our total professional services revenue in the six months ended October 31, 2025 and 2024, respectively.

Current wording

Prioritized engineering services are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. When we agree to this, we negotiate an agreed upon fee to accelerate the development of the software as well as other terms, such as relevant specifications. When the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product, and enhances the operation of that product going forward. Such prioritized engineering services result in production-level computer software-compiled code that enhances the functionality of our production products — which is available for our customers to use over the life of their software licenses. Prioritized engineering services revenue is recognized as professional services over the period in which the software development is completed. Prioritized engineering services revenue accounted for 65% and 43% of total professional services revenue for the three months ended January 31, 2026 and 2025, respectively, and 80% and 65% of our total professional services revenue in the nine months ended January 31, 2026 and 2025, respectively.

Previous wording

In the first quarter of fiscal year 2023, we introduced a change to our go-to-market strategy including a way for new customers to subscribe for our products at smaller initial contract sizes and pay for services based on their monthly consumption of vCPU and vGPU hours. Customers generally begin with a one to two-quarter-long initial production deployment agreements which includes the necessary resources required to deploy the C3 Agentic AI Platform and/or C3 AI Applications and receive necessary training to operate and maintain the software in production use. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours utilized as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

Current wording

Our go-to-market strategy includes a way for new customers to subscribe to our products at smaller initial contract sizes and pay for services based on their monthly consumption of vCPU and vGPU hours or at fixed rates. Customers generally begin with a short proof of value or one to two-quarter-long initial production deployment agreements which includes the necessary resources required to deploy the C3 Agentic AI Platform and/or C3 AI Applications and receive necessary training to operate and maintain the software in production use. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours utilized as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

Previous wording

•Consulting and Services Partners. We partner with a number of consulting firms and system integrators specializing in Enterprise AI implementation, including McKinsey & Company, PwC, Fractal, and Paradyme.

Current wording

•Consulting and Services Partners. We partner with a number of consulting firms and system integrators specializing in Enterprise AI implementation, including McKinsey & Company, PwC, Fractal, and Cathexis (formerly Paradyme).

Previous wording

RPO was $232.5 million as of October 31, 2025, which includes $56.1 million of non-cancellable commitments where actual product selection and quantities of specific products or services will be determined at a later date. RPO was $235.1 million as of April 30, 2025.

Current wording

RPO was $225.4 million as of January 31, 2026, which includes $53.0 million of non-cancellable commitments where actual product selection and quantities of specific products or services will be determined at a later date. RPO was $235.1 million as of April 30, 2025.

Previous wording

RPO represents the amount of our contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. Our RPO as of October 31, 2025 is comprised of $34.7 million related to deferred revenue and $197.8 million of commitments from non-cancellable contracts. Our RPO as of April 30, 2025 was comprised of $36.6 million related to deferred revenue and $198.5 million of commitments from non-cancellable contracts.

Current wording

RPO as of January 31, 2026 is comprised of $40.0 million related to deferred revenue and $185.4 million of commitments from non-cancellable contracts. Our RPO as of April 30, 2025 was comprised of $36.6 million related to deferred revenue and $198.5 million of commitments from non-cancellable contracts.

Previous wording

A consumption-based pricing model begins with a paid “Initial Production Deployment” phase (formerly known as “Pilot” phase) of generally up-to six months that may include developer access to the C3 Agentic AI Platform, one C3 AI Application or C3 Generative AI and COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

Current wording

An IPD agreement may include developer access to the C3 Agentic AI Platform, one C3 AI Application or C3 Generative AI and COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

Previous wording

We executed 20 and 36 initial production deployment agreements during the fiscal quarters ended October 31, 2025 and 2024, respectively.

Current wording

We executed 14 and 50 initial production deployment agreements during the fiscal quarters ended January 31, 2026 and 2025, respectively.

Previous wording

We have built a high-performance, customer-focused culture and have implemented proactive programs and processes designed to drive customer success. These include a robust customer support and success function. For example, as part of our subscription offerings, we provide our customers with the ability to establish a COE utilizing our experienced and specialized resources in key technical areas like application development, data integration, and data science to accelerate and ensure our customers’ success developing applications on our C3 Agentic AI Platform. We closely monitor the health and status of every customer account through multiple activities, including real-time monitoring, daily and weekly reports to management, as well as quarterly reviews with our customers.

Current wording

We have built a high-performance, customer-focused culture and have implemented proactive programs and processes designed to drive customer success. These include a robust customer support and success function. For example, as part of our subscription offerings, we provide our customers with the ability to establish a COE, which utilizes our experienced and specialized resources in key technical areas like application development, data integration, and data science to accelerate and ensure our customers’ success developing applications on our C3 Agentic AI Platform. We closely monitor the health and status of every customer account through multiple activities, daily and weekly reports to management, as well as quarterly reviews with our customers.

Previous wording

Historically, we have had a relatively small number of customers with large total subscription contract values. As a result, revenue growth can vary significantly based on the timing of customer acquisition, changes in product mix, and contract durations, renewals, or terminations. We expect the number of customers to increase compared to prior fiscal years as organizations address the importance of digital transformation. The average total subscription contract value as well as the revenue represented by our lighthouse customers as a percentage of total revenue is decreasing and we expect them to continue to decrease as we have restructured our sales organization as described below and expanded our market-partner ecosystem to effectively address small, medium, and large enterprise sales opportunities.

Current wording

Historically, we have had a relatively small number of customers with large total subscription contract values. As a result, our revenue can vary significantly based on the timing of customer acquisition, changes in product mix, and contract durations, renewals, or terminations. We expect the number of customers to increase compared to prior fiscal years as organizations address the importance of digital transformation. The average total subscription contract value as well as the revenue represented by our lighthouse customers as a percentage of total revenue is decreasing and we expect them to continue to decrease as we have restructured our sales organization as described below and expanded our market-partner ecosystem to effectively address small, medium, and large enterprise sales opportunities.

Previous wording

During the three months ended July 31, 2025, we restructured our sales and services organization to provide a more seamless, high-touch customer experience with a consistent focus on realizing significant economic benefit rapidly from each C3 AI customer engagement. However, the restructuring has had a disruptive effect on our financial performance. This disruptive effect, together with onboarding of new leadership, and the impact of our Executive Chairman’s unanticipated health issues preventing him from participating in the sales process as actively as he had in the past, may have had and may continue to have a negative effect on our sales results. Our future success and financial performance depends on the ability of our restructured sales and services organization to achieve desired productivity levels in a reasonable period of time. See“The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our C3 AI Software.” included in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Current wording

During the three months ended July 31, 2025, we restructured our sales and services organization to provide a more seamless, high-touch customer experience with a consistent focus on realizing significant economic benefit rapidly from each C3 AI customer engagement. However, the restructuring has had a disruptive effect on our financial performance. This disruptive effect, together with onboarding of new leadership may have a negative effect on our sales results. Our future success and financial performance depend on the ability of our restructured sales and services organization to achieve desired productivity levels in a reasonable period of time. See“The failure to effectively develop and invest in our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our C3 AI Software.” included in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Previous wording

We expect to maintain high levels of investment in product innovation over the coming years as we continue to introduce new applications which address new industry use cases, and new features and functionality for the C3 AI Software. As our business scales over a longer-term horizon, we anticipate research and development spend as a percent of total revenue to decline.

Current wording

We expect to maintain high levels of investment in product innovation as we continue to introduce new applications which address new industry use cases, and new features and functionality for the C3 AI Software. As our business scales over a longer-term horizon, we anticipate research and development spend as a percent of total revenue to decline.

Previous wording

We believe we are in the early stages of a large and expanding market for AI enabled digital transformation. As a result, we intend to continue to invest in brand awareness, market education, strategic paid media, and thought leadership, particularly as it relates to generative AI. We engage the market through digital, radio, outdoor, airport, and print advertising; virtual and physical events, including our C3 Transform annual user conference; and C3 AI Webinars, a series of events featuring C3 AI customers, C3 AI partners, and C3 AI experts in AI, Machine Learning, or ML, and data science.

Current wording

We believe we are in the nascent stages of a large and expanding market for AI enabled digital transformation. As a result, we intend to continue to invest in brand awareness, market education, strategic paid media, and thought leadership, particularly as it relates to agentic and generative AI. We engage the market through digital, radio, outdoor, airport, and print advertising; virtual and physical events, including our C3 Transform annual user conference; and C3 AI Webinars, a series of events featuring C3 AI customers, C3 AI partners, and C3 AI experts in AI, Machine Learning, or ML, and data science.

Previous wording

We anticipate continuing to make significant investments in marketing over the next few years. Over the long term, we expect marketing spend to decline as a percent of total revenue as we make ongoing progress establishing C3 AI’s brand and reputation and as our business scales.

Current wording

We anticipate continuing to make investments in marketing over the next few years. Over the long term, we expect marketing spend to decline as a percent of total revenue as we make ongoing progress establishing C3 AI’s brand and reputation and as our business scales.

Previous wording

The international market opportunity for Enterprise AI software is large and growing, and we believe there is a significant opportunity to continue to grow our international customer base. We believe that the demand for our C3 AI Software will continue growing as international awareness of the benefits of digital transformation and Enterprise AI software grows. We plan to continue to make investments to expand geographically by increasing our direct sales team in international markets and supplementing the direct sales effort with strategic partners to significantly expand our reach and market coverage. We derived approximately 5% and 13% of our total revenue for the three months ended October 31, 2025 and 2024, respectively, and 7% and 13% of our total revenue for the six months from ended October 31, 2025 and 2024, respectively, international customers.

Current wording

The international market opportunity for Enterprise AI software is large and growing, and we believe there is a significant opportunity to continue to grow our international customer base. We believe that the demand for our C3 AI Software will continue growing as international awareness of the benefits of digital transformation and Enterprise AI software grows. We plan to continue to make investments to expand geographically by continuing to invest in our direct sales teams in international markets and supplementing the direct sales effort with strategic partners to significantly expand our reach and market coverage. We derived approximately 12% and 14% of our total revenue for the three months ended January 31, 2026 and 2025, respectively, and 9% and 13% of our total revenue for the nine months from ended January 31, 2026 and 2025, respectively, international customers.

Previous wording

We expect our sales and marketing expenses will increase in absolute dollar amounts as we continue to hire additional sales personnel to increase sales coverage of target industry vertical and geographic markets. Consequently, sales and marketing expense as a percent of total revenue will remain high in the near-term. As our business scales through customer expansion and market awareness, we anticipate that sales and marketing expense as a percent of total revenue will decline over time.

Current wording

We expect our sales and marketing expenses will decrease in absolute dollar amounts as we implement the restructuring plan and reduce costs.

Previous wording

Our general and administrative expense may increase in absolute dollars as we continue to grow our business. We have incurred, and expect to continue to incur, additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and professional services. We expect that general and administrative expense as a percent of total revenue will decline over the long-term as we benefit from the economies of scale of our overall business.

Current wording

Our general and administrative expense is expected to decline in absolute dollars as we implement our restructuring plan. We have incurred, and expect to continue to incur expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as expenses for general and director and officer insurance, investor relations, and professional services.

Previous wording

Comparison of the Three and Six Months Ended October 31, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended January 31, 2026 and 2025

Previous wording

Subscription revenue accounted for 93% and 86% of our total revenue for the three months ended October 31, 2025 and 2024, respectively. Subscription revenue decreased by $10.9 million, or 13%, for the three months ended October 31, 2025, compared to the same period last year. Approximately 37% and 24%, respectively, of the total subscription revenue for the three months ended October 31, 2025 and 2024 was attributable to revenue from new customers, and the remaining 63% and 76%, respectively, was attributable to revenue from existing customers. Existing customers are those from whom revenue was recognized during the three months ended October 31, 2024.

Current wording

Subscription revenue accounted for 90% and 87% of our total revenue for the three months ended January 31, 2026 and 2025, respectively. Subscription revenue decreased by $37.5 million, or 44%, for the three months ended January 31, 2026, compared to the same period last year. Approximately 37% and 22%, respectively, of the total subscription revenue for the three months ended January 31, 2026 and 2025 was attributable to revenue from new customers, and the remaining 63% and 78%, respectively, was attributable to revenue from existing customers. Existing customers are those from whom revenue was recognized during the three months ended January 31, 2025.

Previous wording

Subscription revenue accounted for 90% and 85% of our total revenue for the six months ended October 31, 2025 and 2024, respectively. Subscription revenue decreased by $24.1 million, or 16%, for the six months ended October 31, 2025, compared to the same period last year. Approximately 29% and 19%, respectively, of the total subscription revenue was attributable to revenue from new customers, and the remaining 71% and 81%, respectively, was attributable to revenue from existing customers for the six months ended October 31, 2025 and 2024, respectively. Existing customers are those from whom revenue was recognized during the six months ended October 31, 2024.

Current wording

Subscription revenue accounted for 90% and 86% of our total revenue for the nine months ended January 31, 2026 and 2025, respectively. Subscription revenue decreased by $61.6 million, or 26%, for the nine months ended January 31, 2026, compared to the same period last year. Approximately 29% and 15%, respectively, of the total subscription revenue was attributable to revenue from new customers, and the remaining 71% and 85%, respectively, was attributable to revenue from existing customers for the nine months ended January 31, 2026 and 2025, respectively. Existing customers are those from whom revenue was recognized during the nine months ended January 31, 2025.

Previous wording

Professional services revenue decreased by $8.3 million, or 63%, for the three months ended October 31, 2025, compared to the same period last year, predominantly due to a decrease in prioritized engineering services of $5.7 million and a decrease in professional services of $2.6 million as a result of a decrease in the number of service, consulting, and training projects for C3 AI Platform and C3 AI Application customers.

Current wording

Professional services revenue decreased by $8.0 million, or 61%, for the three months ended January 31, 2026, compared to the same period last year, predominantly due to a decrease in professional services of $5.6 million as a result of a decrease in the number of service, consulting, and training projects for C3 AI Platform and C3 AI Application customers and a decrease in prioritized engineering services of $2.4 million.

Previous wording

Professional services revenue decreased by $12.1 million, or 45%, for the six months ended October 31, 2025, compared to the same period last year, predominantly due to a decrease in prioritized engineering services of $7.7 million and a decrease in professional services of $4.4 million as a result of a decrease in the number of service, consulting, and training projects for C3 AI Platform and C3 AI Application customers.

Current wording

Professional services revenue decreased by $20.1 million, or 50%, for the nine months ended January 31, 2026, compared to the same period last year, predominantly due to a decrease in prioritized engineering services of $10.1 million and a decrease in professional services of $10.0 million as a result of a decrease in the number of service, consulting, and training projects for C3 AI Platform and C3 AI Application customers.

Previous wording

The increase in cost of professional services revenue for the three months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll and contractor costs of $0.3 million.

Current wording

The decrease in cost of professional services revenue for the nine months ended January 31, 2026 compared to the same period last year was primarily due to lower payroll and contractor costs of $0.3 million.

Previous wording

The decrease in total gross margin for the three months ended October 31, 2025 compared to the same period last year was driven by decline in both subscription and professional services margin. The subscription margin for the three months ended October 31, 2025 decreased primarily due to the decline in subscription revenue and higher payroll and contractor costs. The professional service margin decreased for the three months ended October 31, 2025 due to the decline in prioritized engineering service projects compared to the same period last year and higher payroll and contractor costs.

Current wording

The decrease in total gross margin for the three months ended January 31, 2026 compared to the same period last year was driven by decline in both subscription and professional services margin. The subscription margin for the three months ended January 31, 2026 decreased primarily due to the decline in subscription revenue and higher payroll and contractor costs. The professional service margin decreased for the three months ended January 31, 2026 due to the decline in professional service projects compared to the same period last year.

Previous wording

The decrease in total gross margins for the six months ended October 31, 2025 compared to the same period last year was driven by decline in both subscription and professional services margin. The subscription margin for the six months ended October 31, 2025 decreased primarily due to the decline in subscription revenue and higher payroll and contractor costs. The professional service margin decreased for the six months ended October 31, 2025 due to the decline in prioritized engineering service projects compared to the same period last year and higher payroll and contractor costs.

Current wording

The decrease in total gross margins for the nine months ended January 31, 2026 compared to the same period last year was driven by decline in both subscription and professional services margin. The subscription margin for the nine months ended January 31, 2026 decreased primarily due to the decline in subscription revenue and higher payroll and contractor costs. The professional service margin decreased for the nine months ended January 31, 2026 due to the decline in overall professional services revenue compared to the same period last year.

Previous wording

Sales and Marketing. The increase in sales and marketing expense for the three months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll costs of $7.7 million as a result of additional headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, partially offset by lower advertising costs of $5.0 million.

Current wording

Sales and Marketing. The increase in sales and marketing expense for the three months ended January 31, 2026 compared to the same period last year was primarily due to higher payroll costs of $12.0 million as a result of additional headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, partially offset by lower advertising costs of $5.3 million and other marketing spend of $1.0 million.

Previous wording

The increase in sales and marketing expense for the six months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll costs of $22.7 million as a result of increased headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, higher marketing costs of $1.2 million, and higher professional services of $0.7 million, partially offset by lower advertising costs of $11.9 million.

Current wording

The increase in sales and marketing expense for the nine months ended January 31, 2026 compared to the same period last year was primarily due to higher payroll costs of $34.7 million as a result of increased headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, partially offset by lower advertising costs of $14.5 million and lower marketing event costs of $1.6 million and other marketing spend of $1.2 million.

Previous wording

Research and Development. The increase in research and development expense for the three months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll and contractor costs of $5.1 million, partially offset by lower data center costs of $2.9 million.

Current wording

Research and Development. The decrease in research and development expense for the three months ended January 31, 2026 compared to the same period last year was primarily due to lower data center costs of $2.6 million, partially offset by higher payroll and contractor costs of $1.8 million and higher software related costs of $0.4 million.

Previous wording

The increase in research and development expense for the six months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll and contractor costs of $14.5 million.

Current wording

The increase in research and development expense for the nine months ended January 31, 2026 compared to the same period last year was primarily due to higher payroll and contractor costs of $16.3 million and higher software related costs of $0.9 million, partially offset by lower data center costs of $4.2 million.

Previous wording

General and Administrative. The increase in general and administrative expense for the three months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll costs of $3.5 million as a result of additional headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, and higher general and administrative costs of $0.6 million.

Current wording

General and Administrative. The decrease in general and administrative expense for the three months ended January 31, 2026 compared to the same period last year was primarily due to lower travel, entertainment and other expenses $1.9 million, lower professional services costs of $1.7 million and decline in corporate insurance cost of $0.4 million, partially offset by higher payroll costs of $2.4 million as a result of additional headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees.

Previous wording

The increase in general and administrative expense for the six months ended October 31, 2025 compared to the same period last year was primarily due to higher payroll costs of $7.4 million as a result of increased headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees and higher other general and administrative costs of $0.7 million, and higher professional services expenses of $0.9 million, partially offset by decline in corporate insurance costs of $0.5 million.

Current wording

The increase in general and administrative expense for the nine months ended January 31, 2026 compared to the same period last year was primarily due to higher payroll costs of $9.9 million as a result of increased headcount and increased stock-based compensation primarily related to additional equity awards granted to current and new employees, partially offset by lower travel, entertainment and other expenses of $1.6 million, lower professional services expenses of $0.9 million, and decline in corporate insurance costs of $0.9 million.

Previous wording

The decrease in interest income for the three and six months ended October 31, 2025 compared to the same period last year was primarily due to lower prevailing interest rates on our marketable securities portfolio and lower volume of investments in the three and six months ended October 31, 2025.

Current wording

The decrease in interest income for the three and nine months ended January 31, 2026 compared to the same period last year was primarily due to lower volume of investments and lower prevailing interest rates on our marketable securities portfolio in the three and nine months ended January 31, 2026.

Previous wording

The increase in other income (expense), net for the three and six months ended October 31, 2025 compared to the same period last year was primarily due to higher foreign currency gains on the remeasurement of Euro-denominated cash and accounts receivable balances, in the three and six months ended October 31, 2025.

Current wording

The increase in other income (expense), net for the three and nine months ended January 31, 2026 compared to the same period last year was primarily due to higher foreign currency gains on the remeasurement of Euro-denominated cash and accounts receivable balances, in the three and nine months ended January 31, 2026.

Previous wording

The change in provision for income taxes for the three and six months ended October 31, 2025 compared to the same period last year was primarily related to foreign and state tax expense.

Current wording

The change in provision for income taxes for the three and nine months ended January 31, 2026 compared to the same period last year was primarily related to foreign and state tax expense.

Previous wording

Since inception, we have financed operations primarily through sales generated from our customers and sales of equity securities. As of October 31, 2025 and April 30, 2025, we had $103.2 million and $164.4 million of cash and cash equivalents and $571.8 million and $578.3 million of marketable securities, respectively, which are available for use in current operations. Our marketable securities generally consist of high-grade U.S. treasury securities, certificates of deposit, U.S. government agency securities, commercial paper and corporate debt securities. We have generated operating losses from our operations as reflected in our accumulated deficit of $1.6 billion as of October 31, 2025. We expect to continue to incur operating losses and generate negative cash flows from operations in the next few quarters due to the investments we intend to make in our business, and as a result we may require additional capital to execute on our strategic initiatives to grow the business.

Current wording

Since inception, we have financed operations primarily through sales generated from our customers and sales of equity securities. As of January 31, 2026 and April 30, 2025, we had $88.8 million and $164.4 million of cash and cash equivalents and $533.1 million and $578.3 million of marketable securities, respectively, which are available for use in current operations. Our marketable securities generally consist of high-grade U.S. treasury securities, certificates of deposit, U.S. government agency securities, commercial paper and corporate debt securities. We have generated operating losses from our operations as reflected in our accumulated deficit of $1.7 billion as of January 31, 2026. We expect to continue to incur operating losses and generate negative cash flows from operations in the next few quarters due to the investments we intend to make in our business, and as a result we may require additional capital to execute on our strategic initiatives to grow the business.

Previous wording

During the six months ended October 31, 2025, cash used in operating activities was $80.0 million, an increase of $49.4 million compared to the same period last year. The increase was primarily attributable to an increase in cash paid for payroll and related costs, and to vendors, partially offset by an increase in cash received from customers.

Current wording

During the nine months ended January 31, 2026, cash used in operating activities was $135.8 million, an increase of $83.1 million compared to the same period last year. The increase was primarily attributable to an increase in cash paid for payroll and related costs, and to vendors, partially offset by an increase in cash received from customers.

Previous wording

Investing Activities. Net cash provided by investing activities of $10.9 million for the six months ended October 31, 2025 was attributable to maturities and sales of marketable securities of $343.3 million, offset by purchases of marketable securities of $331.2 million and capital expenditures of $1.1 million mainly related to computer equipment and servers.

Current wording

Investing Activities. Net cash provided by investing activities of $51.2 million for the nine months ended January 31, 2026 was attributable to maturities and sales of marketable securities of $496.1 million, offset by purchases of marketable securities of $443.4 million and capital expenditures of $1.6 million mainly related to computer equipment and servers.

Previous wording

Net cash used in investing activities of $18.9 million for the six months ended October 31, 2024 was attributable to purchases of marketable securities of $365.9 million and capital expenditures of $1.7 million mainly related to the leasehold improvements associated with the new leased space, partially offset by maturities and sales of marketable securities of $348.8 million.

Current wording

Net cash used in investing activities of $6.5 million for the nine months ended January 31, 2025 was attributable to purchases of marketable securities of $518.8 million and capital expenditures of $2.1 million mainly related to the computer equipment and servers, partially offset by maturities and sales of marketable securities of $514.4 million.