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of accessing their data, the process for doing so was time-consuming, costly, and often resulted in the data being out-of-date by the time it reached decision makers.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of accessing their data, the process for doing so was time-consuming, costly, and often resulted in the data being out-of-date by the time it reached decision makers.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

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. 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

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 55% 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.

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, over 70% 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 October 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.

Current wording

As of April 30, 2025, 70% of our customers were under multi-year contracts on a dollar-weighted basis, compared to 69% of customers as of January 31, 2025. 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 October 31, 2023 and 2024, total RPO was $367.2 million and $368.2 million, respectively. The amount of RPO expected to be recognized as revenue in the next twelve months was $230.8 million and $220.6 million as of October 31, 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 April 30, 2024 and 2025, total RPO was $346.3 million and $427.5 million, respectively. The amount of RPO expected to be recognized as revenue in the next twelve months was $230.5 million and $241.0 million as of April 30, 2024 and 2025, respectively.

Previous wording

We had total revenue of $79.7 million and $79.8 million for the three months ended October 31, 2023 and 2024, respectively. For the nine months ended October 31, 2023 and 2024, we had total revenue of $238.8 million and $238.3 million, respectively. For the nine months ended October 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 80% and 79% or our total revenue for the three months ended October 31, 2023 and 2024, respectively.

Current wording

We had total revenue of $80.1 million for both the three months ended April 30, 2024 and 2025, or relatively flat year-over-year. For the three months ended April 30, 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 80% of our total revenue for each of the three month periods ended April 30, 2024 and 2025.

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 $16.4 million and $18.8 million for the three months ended October 31, 2023 and 2024, respectively, and had an accumulated deficit of $1,469.9 million at October 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 $26.0 million and $18.1 million for the three months ended April 30, 2024 and 2025, respectively, and had an accumulated deficit of $1,505.6 million at April 30, 2025. We expect to incur losses for the foreseeable future and may not be able to achieve or sustain profitability.

Previous wording

As of October 31, 2024, we had over 2,600 customers. Enterprise customers accounted for 49% and 45% of our revenue for both the three and nine months ended October 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.

Current wording

As of April 30, 2025, we had over 2,500 customers. For the three months ended April 30, 2024 and 2025, our enterprise customers accounted for 47% and 45% 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.

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 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.

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 trailing twelve month gross retention rate was 87% and 84% as of October 31, 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 84% and 85% as of April 30, 2024 and 2025, respectively. Our gross retention has been affected in part due to macroeconomic conditions and challenging renewals from customers with COVID-19 use cases of our platform.

Previous wording

Our gross retention declined in part due to macroeconomic conditions, challenging renewals from customers with COVID-19 use cases of our platform, and one large non-renewal in April 2024. 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.

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 51% for the three months ended October 31, 2023 compared to 47% for the three months ended October 31, 2024.

Current wording

Sales and marketing expense as a percentage of total revenue was 53% for the three months ended April 30, 2024 compared to 50% for the three months ended April 30, 2025.

Previous wording

Research and development expense as a percentage of total revenue was 25% for the three months ended October 31, 2023 compared to 27% for the three months ended October 31, 2024.

Current wording

Research and development expense as a percentage of total revenue was 28% for the three months ended April 30, 2024 compared to 25% for the three months ended April 30, 2025.

Previous wording

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

Current wording

The following table sets forth our billings for the three months ended April 30, 2024 and 2025:

Previous wording

We derive our revenue primarily from subscription revenue, which consists of subscription-based agreements and 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 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 condensed consolidated statements of operations.

Current 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 condensed consolidated statements of operations.

Previous wording

(2)Includes amortization of certain intangible assets of $20,000 and $142,000 for the three months ended October 31, 2023 and 2024, respectively, and $60,000 and $426,000 for the nine months ended October 31, 2023 and 2024, respectively.

Current wording

(2)Includes amortization of certain intangible assets of $0.1 million for each of the three months ended April 30, 2024 and 2025.

Previous wording

(4)Includes remeasurement of warrant liability of $456,000 and $33,000 for the three and nine months ended October 31, 2024, respectively. There was no remeasurement of warrant liability during the three and nine months ended October 31, 2023.

Current wording

(3)Includes remeasurement of warrant liability of $1.2 million for the three months ended April 30, 2025.

Previous wording

Subscription revenue remained flat primarily due to a $4.4 million net decrease from existing customers, partially offset by a $4.2 million increase from new customers. Our total customer count remained relatively flat from October 31, 2023 to October 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. Professional services and other revenue remained relatively flat.

Current wording

The decrease in subscription revenue was primarily due to a $4.3 million net decrease from existing customers, partially offset by a $3.6 million increase from new customers. Our customer count decreased 2% from April 30, 2024 to April 30, 2025. For the purpose of this comparison, new customers are defined as those added since the end of the prior year quarter.

Previous wording

The increase in subscription cost of revenue was primarily due to a $1.2 million increase in our third-party web hosting services and a $0.4 million increase in amortization related to capitalized software development costs.

Current wording

The increase in cost of subscription revenue was primarily due to a $1.2 million increase in our third-party web hosting services.

Previous wording

Cost of professional services and other revenue decreased primarily due to a $0.8 million decrease in outsourced services and a $0.7 million decrease in employee-related costs.

Current wording

The decrease in cost of professional services and other revenue was primarily due to a $1.1 million decrease in outsourced services.

Previous 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.

Current 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 stabilize in the near term and increase in the long term.

Previous wording

Services gross margin improved primarily due to a decrease in outsourced services. 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.

Current wording

Services gross margin increased primarily due to a lower cost of revenue, mostly related to a reduction in outsourced services costs during the three months ended April 30, 2025 when compared to the three months ended April 30, 2024. 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.

Previous wording

Research and development expenses increased primarily due to a $2.1 million increase in employee-related costs, partially offset by a $0.5 million decrease in contract labor. Our research and development costs increased as a percentage of revenue from 25% to 27%. We expect research and development 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 decreased primarily due to a $1.9 million decrease in employee-related costs and a $0.8 million increase in capitalized software costs. Research and development expense as a percentage of revenue decreased from 28% in the three months ended April 30, 2024 to 25% in the three months ended April 30, 2025. We expect research and development expense as a percentage of revenue to decrease slightly in the near term and remain consistent in the long term.

Previous 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.

Current wording

Other expense, net decreased primarily due to a revaluation of warrant liability, 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 foreign withholding taxes and decreased state tax expense during the three months ended October 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 increased primarily due to an increase in income from our international subsidiaries and additional withholding taxes levied against us. 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 October 31, 2024, we had $40.9 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 $123.0 million credit facility, all of which had been drawn as of October 31, 2024.

Current wording

As of April 30, 2025, we had $47.2 million of cash and cash equivalents, which were held for working capital purposes. Our cash and cash equivalents consist primarily of cash, money market funds, and certificates of deposit. We have a $125.3 million credit facility, all of which had been drawn as of April 30, 2025.

Previous wording

The credit facility permits us to incur up to approximately $125.3 million in term loan borrowings, all of which had been drawn as of October 31, 2024. The credit facility is secured by substantially all of our assets.

Current wording

We have a credit facility that permits up to $125.3 million in term loan borrowings, all of which had been drawn as of April 30, 2025. The credit facility is secured by substantially all of our assets.

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 189,036 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 shares of our Class B common stock.

Previous wording

In August 2024, we entered into an amendment to the credit facility which refinanced the existing term loans, extended the maturity date from April 1, 2026 to August 19, 2028, revised interest amounts payable in cash and payable in kind, and made certain modifications to the financial covenants. Furthermore, certain lenders participating in the credit facility were paid in full for their portion of the principal, PIK interest, and amendment fee and were replaced by new lenders who refinanced those amounts. We paid and subsequently refinanced the $7.0 million closing fee associated with the credit facility, resulting in no net impact to our cash balance. Additionally, the $5.0 million amendment fee from the August 2020 amendment plus the accrued PIK interest of approximately $2.3 million as of August 2024, totaling $7.3 million, was refinanced as the Second PIK Amendment Fee per the August 2024 amendment. The Second PIK Amendment Fee accrues interest at a rate of 9.5% per year and is due upon maturity, along with the related capitalized interest. Also in conjunction with this amendment, we issued 1,022,918 fully-vested warrants to purchase shares of our Class B common stock. These warrants have an exercise price of $0.01 per share and expire on August 19, 2028.

Current wording

In August 2024, we entered into an amendment to the credit facility which refinanced the existing term loans, extended the maturity date from April 1, 2026 to August 19, 2028, revised interest amounts payable in cash and payable in kind, and made certain modifications to the financial covenants. Furthermore, certain lenders participating in the credit facility were paid in full for their portion of the principal, PIK interest, and amendment fee and were replaced by new lenders who refinanced those amounts. We paid and subsequently refinanced the $7.0 million closing fee associated with the credit facility, resulting in no net impact to our cash balance. Additionally, the $5.0 million amendment fee from the August 2020 amendment plus $2.3 million of accrued PIK interest, totaling $7.3 million, was refinanced as the Second PIK Amendment Fee per the August 2024 amendment. The Second PIK Amendment Fee accrues interest at a rate of 9.5% per year and is due upon maturity, along with the related capitalized interest. Also in conjunction with this amendment, we issued 1,022,918 fully-vested warrants to purchase shares of our Class B common stock. These warrants have an exercise price of $0.01 per share and expire on August 19, 2028.

Previous 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 October 31, 2024, 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 October 31, 2024, the cash interest rate was approximately 8.1%. In addition to the 8.1% 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.

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 April 30, 2025, the cash interest rate was approximately 7.3%. In addition to the 7.3% 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 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 monthly minimum liquidity covenant 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 October 31, 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 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, 2025 and April 30, 2025.

Previous 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.

Current 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.

Previous wording

Net cash used in operating activities during the nine months ended October 31, 2023 consisted of cash outflows of $245.4 million exceeding the $242.5 million collected from customers. Significant components of cash outflows included $136.7 million for personnel costs and $54.4 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 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.

Previous wording

Net cash used in operating activities during the nine months ended October 31, 2024 consisted of cash outflows of $254.4 million exceeding the $236.4 million collected from customers. Significant components of cash outflows included $128.3 million for personnel costs and $52.7 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 three months ended April 30, 2025 consisted of cash collected from customers of $93.2 million exceeding the cash outflows of $89.2 million. Significant components of cash outflows included $47.9 million for personnel costs and $22.0 million for marketing programs and events, third-party costs to provide our platform, outsourced professional services, and other operating expenditures.

Previous wording

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

Current wording

Our investing activities 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 nine months ended October 31, 2023 consisted primarily of $6.6 million of capitalized development costs related to internal-use software and $2.6 million of purchased property and equipment.

Current wording

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.

Previous wording

Net cash used in investing activities during the nine months ended October 31, 2024 consisted primarily of $5.8 million of capitalized development costs related to internal-use software and $1.4 million of purchased property and equipment.

Current wording

Cash used in investing activities during the three months ended April 30, 2025 consisted primarily of $2.5 million of capitalized development costs related to internal-use software and $0.4 million of purchased property and equipment.