SailPoint, Inc.
For the period ended Jul 31, 2025. Filed Sep 10, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2025 · Filed Sep 10, 2025
SAIL$19.21+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-04-30; filed 2025-06-12.
0002030781-25-000024
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-31; filed 2025-09-10.
0002030781-25-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 169 previous paragraphs and 184 current paragraphs.
114 unchanged; 40 reworded; 24 added; 15 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 17 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
On July 4, 2025, H.R. 1, commonly referred to as the One Big Beautiful Bill Act, (the "Act"), was signed into law. The Act makes certain provisions of the 2017 Tax Cuts and Jobs Act permanent while also restoring immediate expensing of domestic research and development costs and modifying the interest expense limitation. In addition, Texas enacted legislation replacing its existing R&D franchise tax credit with a new R&D franchise tax credit regime during the current period. US GAAP requires the effects of changes in tax laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result of these tax law changes, the Company recorded$21.2 million net discrete tax benefit for the change in valuation allowance in connection with its interest expense and Texas R&D credit carryforwards.
Current report
Cost of Services and Other. Cost of services and other decreased by $0.6 million, or 4%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024, remaining materially consistent with the prior period.
Current report
Research and Development Expenses. Research and development expenses increased by $5.0 million, or 12%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. This increase was primarily driven by a $1.5 million increase in equity-based compensation from the issuance of equity-based awards upon the closing of the IPO, a $2.3 million increase in software and hosting costs and a $0.8 million increase in employee-based costs due to continued investment in talent related to the development of our products.
Current report
General and Administrative Expenses. General and administrative expenses increased by $12.7 million, or 48%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. This increase was primarily driven by a $13.9 million increase in equity-based compensation from the issuance of equity-based awards upon the closing of the IPO, a $1.2 million increase in employee-related costs due to higher headcount and increased investments in personnel, a $0.5 million increase in provision for credit losses, a $0.4 million increase in travel expenses and a $0.3 million increase in software and hosting costs. This increase was partially offset by a $3.8 million decrease in professional service fees as the prior year included fees to Thoma Bravo under its advisory services agreement, which was terminated upon the closing of our IPO.
Current report
The Company recorded an income tax benefit of $31.3 million for the three months ended July 31, 2025 compared to an income tax benefit of $26.1 million for the three months ended July 31, 2024, leading to a net benefit increase of $5.2 million, or 20%, year-over-year. The increase is primarily due to recording tax benefit for the change in valuation allowance in the current period for changes in tax law.
Current report
Comparison of the Six Months Ended July 31, 2025 and 2024
Current report
Revenue
Current report
Subscription Revenue. Subscription revenue increased by $111.4 million, or 32%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024 primarily due to an increase in SaaS revenue and term subscription revenue from our focus on selling subscriptions to new and existing customers.
Current report
Perpetual License Revenue. License revenue increased by $0.3 million for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. The increase was not significant and we continue to emphasize on transitioning our sales effort from perpetual license solutions to subscriptions. We expect our license revenue as a percentage of total revenue to continue to decrease over time.
Current report
Cost of Perpetual Licenses. Cost of perpetual licenses were not significant during either the six months ended July 31, 2025 or the six months ended July 31, 2024. Such cost decreased for the six months ended July 31, 2025 compared to the six months ended July 31, 2024 primarily due to our shift in focus on selling subscriptions to new and existing customers.
Current report
Gross Profit and Gross Margin
Current report
Subscription. Subscription gross profit increased by $79.0 million, or 33%, during the six months ended July 31, 2025 compared to the six months ended July 31, 2024. The increase was primarily due to the growth in subscriptions. Subscription gross profit margin was 68% for both the six months ended July 31, 2025 and July 31, 2024. Subscription gross profit remained materially consistent with the prior period.
Current report
Perpetual Licenses. License gross profit increased during the six months ended July 31, 2025 compared to the six months ended July 31, 2024. The increase was not significant and we continue to emphasize on transitioning our sales effort from perpetual license solutions to subscriptions. We expect our license gross profit to continue not to be significant.
Current report
Total gross profit increased by $66.7 million, or 28%, during the six months ended July 31, 2025 compared to the six months ended July 31, 2024. The increase is primarily due to the growth in total revenue. Total gross profit margin was 62% for both the six months ended July 31, 2025 and July 31, 2024. Total gross profit margin remained materially consistent with the prior period.
Current report
Other expense decreased by $72.4 million, or 78%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. This decrease was primarily due to a $69.5 million net decrease in interest expense due to the full repayment of our Term Loans and termination of our 2022 Revolving Credit Facility, which includes $16.7 million for theextinguishment of debt related to the remaining balance of the deferred financing costs of our Term Loans and debt issuance costs for our 2022 Revolving Credit Facility, and a $2.5 million increase in interest income due to an increase in our cash and cash equivalents, and a $0.4 million decrease in other expense related to foreign currency exchange loss.
Current report
Income Tax (Expense) Benefit
Current report
Our adjusted income from operations and adjusted operating margin increased for the three and six months ended July 31, 2025 compared to July 31, 2024, respectively, primarily due to the growth in our overall business and increased operating leverage.
Current report
Free cash flow
Current report
We define free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment, and capitalized software development costs. We use free cash flow as a measure of financial progress in our business, as it balances operating results, cash management, and capital efficiency. We believe information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations, and to fund other capital expenditures. Free cash flow can be volatile and is sensitive to many factors, including changes in working capital and timing of capital expenditures. Working capital at any specific point in time is subject to many variables including the discretionary timing of expense payments and fluctuations in foreign exchange rates.
Current report
The following table summarizes our free cash flow for the periods presented:
Current report
2025 Credit Agreement
Current report
On June 25, 2025, we entered into the 2025 Credit Agreement, which provides for afive-year$250.0 million secured revolving credit facility, including a letter of credit sub-facility of up to$10.0 million. The 2025 Revolving Credit Facility matures on June 25, 2030. Borrowings under the 2025 Revolving Credit Facility may be used to provide ongoing working capital as well as for other general corporate purposes of the Company. We incurred deferred financing costs of$2.7 million related to the issuance of the 2025 Credit Agreement, which are included in other non-current assets on the accompanying condensed consolidated balance sheets. These costs are being amortized to interest expense over the life of the 2025 Credit Agreement on a straight-line basis. Amortization of debt issuance costs related to the 2025 Credit Agreement was$0.1 million for both thethree and six months ended July 31, 2025. The Company had no outstanding 2025 Revolving Credit Facility balance and were in compliance with all applicable covenants as of July 31, 2025. See Note 7 “Credit Agreement and Debt” in the notes to our condensed consolidated financial statements included in this Quarterly Report for more information regarding the terms and conditions of the 2025 Credit Agreement.
Current report
2022 Credit Agreement
Current report
Refer to Note 1 "Description of Business and Summary of Significant Accounting Policies" in the notes to our condensed consolidated financial statements.
Removed paragraphs (15)
Previous report
Cost of Revenue
Previous report
Operating Expenses
Previous report
Other Income (Expense), Net
Previous report
Cost of Revenue
Previous report
** Percentage not deemed meaningful
Previous report
Operating Expenses
Previous report
Other Income (Expense), Net
Previous report
We operate in several tax jurisdictions and are subject to taxes in each country or jurisdiction in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax and may be subject to U.S. income tax if such earnings are distributed to the U.S.
Previous report
We consider the earnings of certain foreign subsidiaries to be permanently reinvested in foreign jurisdictions.
Previous report
Our adjusted operating margin has remained generally consistent in recent periods.
Previous report
Revolving Credit Facility
Previous report
The Revolving Credit Facility matures in August 2028. Borrowing under the Revolving Credit Facility may be used to provide ongoing working capital as well as for other general corporate purposes of the Company. We are required to pay a commitment fee on any unused portion of the Revolving Credit Facility at a rate of 0.50% per annum. We also pay customary letter of credit fees, including a fronting fee equal to 0.25% per annum of the dollar equivalent of the maximum amount available to be drawn under all outstanding letters of credit, as well as customary issuance and administration fees. We may voluntarily repay and reborrow outstanding loans under the Revolving Credit Facility at any time without a premium or a penalty.
Previous report
The Credit Agreement contains covenants that, among other things and subject to certain exceptions and qualifications, restrict our ability and the ability of certain of our subsidiaries to incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock; pay dividends and make other distributions or repurchase stock; make certain investments; create or incur liens; sell assets; create restrictions affecting the ability of restricted subsidiaries to make distributions, loans, or advances or transfer assets to the Company or the restricted subsidiaries; enter into certain transactions with our affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and merge, consolidate, transfer or sell all or substantially all of our assets. The Company is subject to quarterly financial covenants relating to maintaining a minimum liquidity and Annual Recurring Revenue Ratio and Consolidated Total Debt to Consolidated EBITDA Ratio (as defined in the Credit Agreement). The Company was in compliance with all applicable covenants as of April 30, 2025 and for each period presented herein.
Previous report
Obligations outstanding under the Credit Agreement are secured by perfected first priority pledges of and security interests in (i) the equity interests of the Company held by its direct parent and (ii) substantially all of the assets of the Company and each subsidiary guarantor (subject to customary exceptions as more fully described in the Credit Agreement), including equity interests of each subsidiary guarantor under the Credit Agreement.
Previous report
There have been no changes to the information provided in our fiscal 2025 Form 10-K.
Reworded paragraphs (40)
Previous wording
On February 19, 2025, we repaid $350.0 million of our Term Loans using a portion of our proceeds from the IPO. On March 3, 2025, we repaid the remaining balance of $690.0 million of the Term Loans. We recorded a $15.3 million loss from extinguishment of debt related to debt issuance costs upon the full repayment of our Term Loans.
Current wording
On February 19, 2025, we repaid $690.0 million of our Term Loans using a portion of our proceeds from the IPO. On March 3, 2025, we repaid the remaining balance of $350.0 million of the Term Loans. We recorded a $15.3 million loss from extinguishment of debt related to debt issuance costs upon the full repayment of our Term Loans.
Previous wording
During February 2025, we issued 16,483,859 RSUs primarily in connection with our IPO under the new SailPoint, Inc. Omnibus Incentive Plan (the "Omnibus Incentive Plan") to certain of our employees, including our executive officers, and directors of the Board. These RSUs will vest predominately over two to four years based on continued service.
Current wording
During February 2025, we issued 16,483,859 RSUs primarily in connection with our IPO under the new SailPoint, Inc. Omnibus Incentive Plan to certain of our employees, including our executive officers, and directors of the Board. These RSUs will vest predominately over two to four years based on continued service.
Previous wording
The number of customers with $250,000 or more of ARR as of April 30, 2025 increased 28% on a year-over-year basis, and the number of customers with over $1,000,000 of ARR as of April 30, 2025 increased 62% on a year-over-year basis.
Current wording
The number of customers with $250,000 or more of ARR as of July 31, 2025 increased 27% on a year-over-year basis, and the number of customers with over $1,000,000 of ARR as of July 31, 2025 increased 48% on a year-over-year basis.
Previous wording
For Identity Security Cloud, our pricing is tiered and based on the suite, with the option for the customer to purchase additional products and capabilities a-la-carte. We price our IdentityIQ term subscriptions based on a number of factors, including the number of digital identities governed with the solution. Customers also have the option to purchase additional products and capabilities. As of April 30, 2025, the weighted duration of our SaaS and term subscription contracts was approximately three years.
Current wording
For Identity Security Cloud, our pricing is tiered and based on the suite, with the option for the customer to purchase additional products and capabilities a-la-carte. We price our IdentityIQ term subscriptions based on a number of factors, including the number of digital identities governed with the solution. Customers also have the option to purchase additional products and capabilities.
Previous wording
Add New Customers within Existing Markets. Countless organizations still use a combination of legacy solutions and home-grown tools. Furthermore, we estimate that over 60% of organizations in our target market still have a fragmented identity experience or use a mostly manual process based on our internal research. As a result, we believe that there is a significant opportunity for us to accelerate the growth of our customer base by enhancing our marketing efforts, increasing our sales capacity and productivity, and expanding and further leveraging our use of channel partners, including managed service providers ("MSPs"). Our ability to attract new customers depends on a number of factors, including the effectiveness and pricing of our solutions, our ability to drive awareness of them, and the offerings of our competitors.
Current wording
Add New Customers within Existing Markets. Countless organizations still use a combination of legacy solutions and home-grown tools. Furthermore, we estimate that over 60% of organizations in our target market still have a fragmented identity experience or use a mostly manual process based on our internal research. As a result, we believe that there is a significant opportunity for us to accelerate the growth of our customer base by enhancing our marketing efforts, increasing our sales capacity and productivity, and expanding and further leveraging our use of channel partners, including managed service providers. Our ability to attract new customers depends on a number of factors, including the effectiveness and pricing of our solutions, our ability to drive awareness of them, and the offerings of our competitors.
Previous wording
Deepen our Penetration in International Markets. We expect to continue to invest in our sales and marketing efforts and channel partner network to expand our reach and deepen our presence in existing geographies and to expand into new geographies. We believe that our global market opportunity is large and growing in response to the evolving IT and threat landscapes. For the three months ended April 30, 2025, we generated 66% of our revenue from the United States, 21% from EMEA, and 14% from the rest of the world, billed primarily in U.S. dollars. Our ability to deepen our penetration in international markets will depend on a number of factors, including the competitiveness of our solutions, the efficacy of our channel partner network, and our sales and marketing efforts.
Current wording
Deepen our Penetration in International Markets. We expect to continue to invest in our sales and marketing efforts and channel partner network to expand our reach and deepen our presence in existing geographies and to expand into new geographies. We believe that our global market opportunity is large and growing in response to the evolving IT and threat landscapes. We generated 64% and 65% of our revenue from the United States for the three and six months ended July 31, 2025, respectively. We generated 22% of our revenue from EMEA and 13% from the rest of the world, billed primarily in U.S. dollars, for both the three and six months ended July 31, 2025.
Previous wording
ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. Our ARR has grown in each of the past three years, reflecting growth in new customers as well as expanded sales to existing customers. The following table presents our ARR as of the end of each period noted below (dollars in millions):
Current wording
ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. Our ARR has grown in each of the past three years, reflecting growth in new customers as well as expanded sales to existing customers. The following table presents our ARR as of the dates noted below (dollars in millions):
Previous wording
In recent years, we have transitioned our business to a SaaS-first subscription model. As a result of those efforts, the share of SaaS ARR to total ARR has increased from 58% to 62% from April 30, 2024 to April 30, 2025. We believe the share of ARR generated by our SaaS solution will continue to increase over time.
Current wording
In recent years, we have transitioned our business to a SaaS-first subscription model. As a result of those efforts, the share of SaaS ARR to total ARR has increased to 63% as of July 31, 2025 from 59% as of July 31, 2024. We believe the share of ARR generated by our SaaS solution will continue to increase over time.
Previous wording
SaaS ARR should be viewed independently of subscription revenue as SaaS ARR is an operating metric and is not intended to be combined with or replace subscription revenue. SaaS ARR is not a forecast of future subscription revenue, which can be impacted by ASC 606 allocations and renewal rates and does not consider other sources of revenue that are not recurring in nature. The following table presents our SaaS ARR as of the end of each period noted below (dollars in millions):
Current wording
SaaS ARR should be viewed independently of subscription revenue as SaaS ARR is an operating metric and is not intended to be combined with or replace subscription revenue. SaaS ARR is not a forecast of future subscription revenue, which can be impacted by ASC 606 allocations and renewal rates and does not consider other sources of revenue that are not recurring in nature. The following table presents our SaaS ARR as of the dates noted below (dollars in millions):
Previous wording
Our focus on growing our product portfolio as well as expanding customer relationships over time through cross-selling and up-selling has driven expansion of our dollar-based net retention rate from 114% as of April 30, 2024 to 115% as of April 30, 2025.
Current wording
Our dollar-based net retention rate has remained consistent at 114% as of both July 31, 2025 and July 31, 2024. We continue to focus on growing our product portfolio as well as expanding customer relationships over time through cross-selling and up-selling.
Previous wording
We define dollar-based net retention rate as the comparison of our ARR from our subscription customers against the same metric for those subscription customers from the prior year. For the purposes of calculating our dollar-based net retention rate, we define a subscription customer as a separate legal entity that has entered into a distinct subscription agreement. Our dollar-based net retention rate reflects customer expansion, contraction, and churn. We calculate our dollar-based net retention rate as of period end by starting with the ARR from all subscription customers as of 12 months prior to such period end, or prior period ARR. We then calculate the ARR from these same subscription customers as of the current period end, or current period ARR. We then divide the current period ARR by the prior period ARR to arrive at our dollar-based net retention rate. The dollar-based net retention rate at the end of any period is the weighted average of the dollar-based net retention rates as of the end of each of the trailing four quarters. The following table presents our dollar-based net retention rate as of the end of each period noted below:
Current wording
We define dollar-based net retention rate as the comparison of our ARR from our subscription customers against the same metric for those subscription customers from the prior year. For the purposes of calculating our dollar-based net retention rate, we define a subscription customer as a separate legal entity that has entered into a distinct subscription agreement. Our dollar-based net retention rate reflects customer expansion, contraction, and churn. We calculate our dollar-based net retention rate as of period end by starting with the ARR from all subscription customers as of 12 months prior to such period end, or prior period ARR. We then calculate the ARR from these same subscription customers as of the current period end, or current period ARR. We then divide the current period ARR by the prior period ARR to arrive at our dollar-based net retention rate. The dollar-based net retention rate at the end of any period is the weighted average of the dollar-based net retention rates as of the end of each of the trailing four quarters. The following table presents our dollar-based net retention rate as of the dates noted below:
Previous wording
Subscription Revenue. Subscription revenue increased by $45.2 million, or 27%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024 primarily due to an increase in SaaS revenue and term subscription revenue from our focus on selling subscriptions to new and existing customers.
Current wording
Subscription Revenue. Subscription revenue increased by $66.1 million, or 36%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024 primarily due to an increase in SaaS revenue and term subscription revenue from our focus on selling subscriptions to new and existing customers.
Previous wording
Perpetual License Revenue. License revenue decreased by $0.1 million, or (93)%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024 primarily due to our emphasis on transitioning our sales effort from perpetual license solutions to subscriptions.
Current wording
Perpetual License Revenue. License revenue increased by $0.4 million for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The increase was not considered significant and we continue to emphasize on transitioning our sales effort from perpetual license solutions to subscriptions. We expect our license revenue as a percentage of total revenue to continue to decrease over time.
Previous wording
Services and Other Revenue. Services and other revenue decreased by $2.4 million, or 13% for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. This decrease is primarily a result of a shift toward selling a higher proportion of professional services and training on a subscription basis.
Current wording
Services and Other Revenue. Services and other revenue decreased by $0.8 million, or 4% for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. This decrease is primarily a result of a shift toward selling a higher proportion of professional services and training on a subscription basis.
Previous wording
Cost of Perpetual Licenses. Cost of licenses decreased $0.1 million, or (95)%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024 primarily due to a decrease in our license revenue as a result of our shift in focus of selling subscriptions to new and existing customers.
Current wording
Cost of Perpetual Licenses. Cost of perpetual licenses were not significant during either the three months ended July 31, 2025 or the three months ended July 31, 2024. Such cost decreased for the three months ended July 31, 2025 compared to the three months ended July 31, 2024 primarily due to our shift in focus on selling subscriptions to new and existing customers.
Previous wording
Subscription. Subscription gross profit increased by $24.9 million, or 22%, during the three months ended April 30, 2025 compared to the three months ended April 30, 2024. The increase was primarily due to the growth in subscriptions. Subscription gross profit margin was 65% for the three months ended April 30, 2025 and 68% for the three months ended April 30, 2024. The decrease was primarily due to an increase in employee-related costs related to acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards.
Current wording
Subscription. Subscription gross profit increased by $54.2 million, or 44%, during the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The increase was primarily due to the growth in subscriptions. Subscription gross profit margin was 72% for the three months ended July 31, 2025 and 68% for the three months ended July 31, 2024. The change was primarily due to the increased SaaS revenue and term subscription revenue from our focus on selling subscriptions to new and existing customers.
Previous wording
Perpetual Licenses. License gross profit decreased during the three months ended April 30, 2025 compared to the three months ended April 30, 2024 and was primarily due to an increase in selling subscription-based products as compared to licenses. Perpetual license gross profit margin increased as related costs continue to decrease as license revenue decreases.
Current wording
Perpetual Licenses. License gross profit increased during the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The increase was not significant and we continue to emphasize transitioning our sales effort from perpetual license solutions to subscriptions. We expect our license gross profit to continue not to be significant.
Previous wording
Total gross profit increased by $12.2 million, or 11%, during the three months ended April 30, 2025 compared to the three months ended April 30, 2024. The increase is primarily due to the growth in total revenue. Total gross profit margin was 55% for the three months ended April 30, 2025 and 62% for the three months ended April 30, 2024. The decrease was primarily due to an increase in employee-related costs related to acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards.
Current wording
Total gross profit increased by $54.5 million, or 44%, during the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The increase is primarily due to the growth in total revenue. Total gross profit margin was 67% for the three months ended July 31, 2025 and 62% for the three months ended July 31, 2024. The increase is primarily due to the growth in total revenue.
Previous wording
Sales and Marketing Expenses. Sales and marketing expenses increased by $49.6 million, or 43%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. This increase was primarily driven by a $44.3 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $15.0 million increase in employee-based costs to support increased penetration into our existing customer base and expansion into new industry verticals and geographic markets, a $3.2 million increase in advertising and promotion costs, a $1.0 million increase in travel expenses, a $0.5 million increase in software and hosting costs, and a $0.3 million increase in professional services fees. This increase was partially offset by a $14.7 million decrease in intangible amortization attributable to certain intangible assets reaching full amortization.
Current wording
Sales and Marketing Expenses. Sales and marketing expenses increased by $11.7 million, or 10%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. This increase was primarily driven by a $9.3 million increase in equity-based compensation from the issuance of equity-based awards upon the closing of the IPO, a $12.7 million increase in employee-based costs to support increased penetration into our existing customer base and expansion into new industry verticals and geographic markets, a $1.6 million increase for the fair value remeasurement of the contingent consideration related to the Imprivata acquisition, a $1.1 million increase in professional services fees, a $0.7 million increase in software and hosting costs, a $0.5 million increase in advertising and promotion costs and a $0.5 million increase in travel expenses. This increase was partially offset by a $14.7 million decrease in intangible amortization attributable to certain intangible assets reaching full amortization.
Previous wording
Other expense decreased by $26.1 million, or (57)%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. This decrease was primarily due to a $23.9 million net decrease in interest expense due to the full repayment of our Term Loans, which includes $15.3 million for theextinguishment of debt related to the remaining balance of its deferred finance costs and $1.0 million decrease in other expense related to foreign currency exchange loss, partially offset by a $1.3 million increase in interest income due to an increase in our cash and cash equivalents.
Current wording
Other expense decreased by $46.3 million, or 98%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. This decrease was primarily due to a $45.6 million net decrease in interest expense due to the full repayment of our Term Loans and a $1.3 million increase in interest income due to an increase in our cash and cash equivalents, partially offset by a $1.4 million increase for theextinguishment of debt related to the remaining balance of deferred financing costs related to the 2022 Revolving Credit Facility and a $0.6 million increase in other expense related to foreign currency exchange loss.
Previous wording
The effective tax rate for the three months ended April 30, 2025 and 2024 was 8.3% and 21.5%, respectively. The main drivers for the differences in the rates from the prior period to the current period are related to an increase in non-deductible equity-based compensation, non-deductible executive officer compensation, and an increase in valuation allowance. For further information, refer to Note 12 “Income Taxes” in our notes to our condensed consolidated financial statements included in this Quarterly Report.
Current wording
For further information, refer to Note 12 “Income Taxes” in our notes to our condensed consolidated financial statements included in this Quarterly Report.
Previous wording
Cost of Subscription Revenue. Cost of subscription revenue increased $20.4 million, or 37%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024 primarily due to an increase in employee-related costs of $5.1 million due to higher headcount and increased investments in existing employees, an increase of $9.6 million related to acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards, an increase in software and hosting costs of $4.0 million from the increase in sales of SaaS subscriptions, an increase in third-party royalties of $0.4 million, an increase in partner costs of $0.6 million, an increase in amortization of intangibles of $0.3 million and an increase in amortization of capitalized software of $0.3 million.
Current wording
Cost of Subscription Revenue. Cost of subscription revenue increased $32.3 million, or 28%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024 primarily due to an increase in employee-related costs of $9.4 million due to higher headcount and increased investments in personnel, an increase of $9.9 million related to acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards, an increase in software and hosting costs of $9.4 million from the increase in sales of SaaS subscriptions, an increase in partner costs of $1.2 million, an increase in third-party royalties of $0.8 million, an increase in amortization of intangibles of $0.8 million and an increase in amortization of capitalized software of $0.7 million.
Previous wording
Cost of Services and Other. Cost of services and other increased by $10.3 million, or 61%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily due to the acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards.
Current wording
Cost of Services and Other. Cost of services and other increased by $9.7 million, or 29%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024, primarily due to the acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards.
Previous wording
Services and Other. Services and other gross profit decreased by $12.7 million during the three months ended April 30, 2025 compared to the three months ended April 30, 2024. The decrease in gross profit is primarily due to an increase in employee-related costs and the acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards and lower revenue from professional services and training as a result of the shift toward selling these services on a subscription basis. Services and other gross profit margin was (80)% for the three months ended April 30, 2025 and 3% for the three months ended April 30, 2024. The change was primarily due to employee-related costs related to acceleration of equity-based awards from the completion of our IPO and the issuance of new awards and the decrease in services and other revenue.
Current wording
Services and Other. Services and other gross profit decreased by $12.8 million during the six months ended July 31, 2025 compared to the six months ended July 31, 2024. The decrease in gross profit is primarily due to an increase in employee-related costs and the acceleration of equity-based awards from the completion of our IPO and the issuance of new equity-based awards and lower revenue from professional services and training as a result of the shift toward selling these services on a subscription basis. Services and other gross profit margin was (39)% for the six months ended July 31, 2025 and 2% for the six months ended July 31, 2024. The change was primarily due to employee-related costs related to acceleration of equity-based awards from the completion of our IPO and the issuance of new awards and the decrease in services and other revenue.
Previous wording
Research and Development Expenses. Research and development expenses increased by $25.4 million, or 60%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. This increase was primarily driven by a $21.0 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $3.1 million increase in employee-based costs due to continued investment in talent related to the development of our products and a $1.0 million increase in software and hosting costs.
Current wording
Research and Development Expenses. Research and development expenses increased by $30.4 million, or 36%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. This increase was primarily driven by a $22.5 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $3.8 million increase in employee-based costs due to continued investment in talent related to the development of our products and a $3.4 million increase in software and hosting costs.
Previous wording
General and Administrative Expenses. General and administrative expenses increased by $53.9 million, or 201%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024. This increase was primarily driven by a $51.1 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $1.6 million increase in employee-related costs due to higher headcount and increased investments in existing employees, a $2.9 million increase in provision for credit losses, and a $0.8 million increase in software and hosting costs. This increase was partially offset by a $2.3 million decrease in professional service fees.
Current wording
General and Administrative Expenses. General and administrative expenses increased by $66.7 million, or 125%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. This increase was primarily driven by a $64.9 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $3.1 million increase in employee-related costs due to higher headcount and increased investments in existing employees, a $3.4 million increase in provision for credit losses, a $1.0 million increase in software and hosting costs, and a $0.4 million increase in travel expenses. This increase was partially offset by a $6.1 million decrease in professional service fees as the prior year included fees to Thoma Bravo under its advisory services agreement, which was terminated upon the closing of our IPO.
Previous wording
The Company recorded an income tax benefit of $17.0 million for the three months ended April 30, 2025 compared to an income tax benefit of $24.5 million for the three months ended April 30, 2024, leading to a net benefit decrease of $7.5 million, or (31)%, year-over-year. The decrease is primarily due to certain non-deductible equity-based compensation, non-deductible executive officer compensation, and an increase in valuation allowance. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized and continue to maintain a valuation allowance to reduce our deferred tax assets to the amount realizable. Our valuation allowance is primarily related to our interest expense carryforwards.
Current wording
The Company recorded an income tax benefit of $48.3 million for the six months ended July 31, 2025 compared to an income tax benefit of $50.6 million for the six months ended July 31, 2024, leading to a net benefit decrease of $2.2 million, or (4)%, year-over-year. The decrease is primarily due to certain non-deductible equity-based compensation and non-deductible executive officer compensation that is partially offset by the decrease in valuation allowance in the current period.
Previous wording
We believe excluding items that do not reflect our ongoing, core operating or business performance, such as equity-based compensation, payroll taxes related to awards that were accelerated upon the closing of our IPO, payroll taxes related to RSUs, amortization of acquired intangible assets, and acquisition-related expenses, enables management and investors to compare our underlying business performance from period-to-period. Accordingly, we believe these adjustments facilitate a useful evaluation of our current operating performance and comparison to our past operating performance and provide investors with additional means to evaluate cost and expense trends. In addition, we also believe these adjustments enhance comparability of our financial performance against those of other technology companies.
Current wording
We believe excluding items that do not reflect our ongoing, core operating or business performance, such as equity-based compensation, payroll taxes related to awards that were accelerated upon the closing of our IPO, payroll taxes related to RSUs, amortization of acquired intangible assets, and acquisition-related expenses (including fair value adjustments to acquisition-contingent consideration), enables management and investors to compare our underlying business performance from period-to-period. Accordingly, we believe these adjustments facilitate a useful evaluation of our current operating performance and comparison to our past operating performance and provide investors with additional means to evaluate cost and expense trends. In addition, we also believe these adjustments enhance comparability of our financial performance against those of other technology companies.
Previous wording
We define adjusted income from operations as income (loss) from operations excluding equity-based compensation expense, payroll taxes related to awards that were accelerated upon the closing of our IPO and payroll taxes related to RSUs, all of which were issued after the closing of the IPO, amortization of acquired intangible assets which includes impairment charges, benefit from amortization related to acquired contract acquisition costs, acquisition-related expenses, Thoma Bravo monitoring fees (which were annual service-fees as described in Note 8 “Related Party Transactions” in the notes to our condensed consolidated financial statements), and restructuring expenses. The Thoma Bravo monitoring fees were incurred pursuant to a services agreement, and we do not expect to receive similar services in the future or enter into a similar arrangement again in the future.
Current wording
We define adjusted income from operations as income (loss) from operations excluding equity-based compensation expense, payroll taxes related to awards that were accelerated upon the closing of our IPO and payroll taxes related to RSUs, all of which were issued after the closing of the IPO, amortization of acquired intangible assets which includes impairment charges, benefit from amortization related to acquired contract acquisition costs, acquisition-related expenses (including fair value adjustments to acquisition-contingent consideration), Thoma Bravo monitoring fees (which were annual service-fees as described in Note 8 “Related Party Transactions” in the notes to our condensed consolidated financial statements), and restructuring expenses. The Thoma Bravo monitoring fees were incurred pursuant to a services agreement, and we do not expect to receive similar services in the future or enter into a similar arrangement again in the future.
Previous wording
As of April 30, 2025, our principal source of liquidity was cash and cash equivalents totaling $228.1 million and our Revolving Credit Facility as described further below. We have restricted cash of $6.2 million as of April 30, 2025 primarily related to unconditional standby letters of credit for our corporate headquarters and for our corporate credit card program.
Current wording
As of July 31, 2025, our principal source of liquidity was cash and cash equivalents totaling $271.1 million and our 2025 Revolving Credit Facility as described further below. We have restricted cash of $6.3 million as of July 31, 2025 primarily related to unconditional standby letters of credit for our corporate headquarters and for our corporate credit card program.
Previous wording
We believe our existing cash and cash equivalents and amounts available under our Revolving Credit Facility will be sufficient to meet our liquidity, capital expenditures, and anticipated working capital requirements to fund our operations for at least the next 12 months.
Current wording
We believe our existing cash and cash equivalents and amounts available under our 2025 Revolving Credit Facility will be sufficient to meet our liquidity, capital expenditures, and anticipated working capital requirements to fund our operations for at least the next 12 months.
Previous wording
To the extent existing cash and cash equivalents are not sufficient to fund future activities, we may borrow under our Revolving Credit Facility or seek to raise additional funds through equity, equity-linked or debt financings. We may enter into agreements or letters of intent with respect to potential investments in, or acquisitions of, complementary businesses, services or technologies, which could also require us to seek additional equity financing, incur indebtedness or use cash resources. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.
Current wording
To the extent existing cash and cash equivalents are not sufficient to fund future activities, we may borrow under our 2025 Revolving Credit Facility or seek to raise additional funds through equity, equity-linked or debt financings. We may enter into agreements or letters of intent with respect to potential investments in, or acquisitions of, complementary businesses, services or technologies, which could also require us to seek additional equity financing, incur indebtedness or use cash resources. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.
Previous wording
On August 16, 2022, we entered into the Credit Agreement. The Credit Agreement provides for (i) a six-year $125.0 million senior secured Revolving Credit Facility, including a letter of credit subfacility of up to $5.0 million and (ii) the Term Loans. On February 19, 2025, we repaid $690.0 million of the Term Loans from the proceeds of the IPO. On March 3, 2025, we repaid the remaining balance of $350.0 million of the Term Loans. As of April 30, 2025, we have no borrowings outstanding under the Revolving Credit Facility.
Current wording
On August 16, 2022, we entered into the 2022 Credit Agreement. The 2022 Credit Agreement provides for (i) a six-year $125.0 million senior secured Revolving Credit Facility, including a letter of credit subfacility of up to $5.0 million and (ii) the Term Loans. After the closing of the IPO, we fully repaid our Term Loans and recorded an extinguishment of debt related to the remaining balance of the associated deferred financing costs of$15.3 million. On June 25, 2025, the 2022 Credit Agreement was terminated upon the closing of the 2025 Credit Agreement. The remaining unamortized deferred financing costs for the 2022 Revolving Credit Facility of $1.4 million was recorded as a loss from extinguishment of debt. The extinguishment of debt associated for the Term Loans and for the 2022 Revolving Credit Facility is recorded within interest expense on the condensed consolidated statements of operations.
Previous wording
As of April 30, 2025, we had $228.1 million of cash and cash equivalents (of which $12.9 million was held in our foreign subsidiaries), $125.0 million of availability under the Credit Agreement, and $486.2 million in net working capital, which we define as current assets less current liabilities, excluding deferred revenue. As of January 31, 2025, we had $121.3 million of cash and cash equivalents (of which $11.6 million was held in our foreign subsidiaries), $125.0 million of availability under the Credit Agreement, and $350.7 million in net working capital. The decrease in cash and cash equivalents and net working capital is due primarily to cash paid related to the acceleration of equity-based awards from the completion of our IPO andoperating losses.
Current wording
As of July 31, 2025, we had $271.1 million of cash and cash equivalents (of which $16.4 million was held in our foreign subsidiaries), $250.0 million of availability under the 2025 Credit Agreement, and $539.3 million in net working capital, which we define as current assets less current liabilities, excluding deferred revenue. As of January 31, 2025, we had $121.3 million of cash and cash equivalents (of which $11.6 million was held in our foreign subsidiaries), $125.0 million of availability under the 2022 Credit Agreement, and $350.7 million in net working capital. The increase in cash and cash equivalents and net working capital is due primarily to the proceeds received upon the closing of our IPO and increase in cash provided by operations.
Previous wording
During the three months ended April 30, 2025, cash used in operating activities was $96.8 million, which consisted of a net loss of $187.3 million, adjusted by non-cash charges of $159.8 million and a net decrease of $69.3 million in our net operating assets and liabilities. The non-cash charges are primarily comprised of depreciation and amortization expense of $52.1 million, equity-based compensation of $105.7 million, amortization of contract acquisition costs of $8.2 million, amortization of debt discount and issuance costs, including the early write-off of issuance costs related to the repayment of the Term Loans of $15.6 million and provision for credit losses of $3.6 million, partially offset by deferred taxes of $25.3 million. The net cash outflow from changes in operating assets and liabilities was primarily a result of an increase in deferred contract acquisition costs of $9.5 million due to an increase in our sales, an increase in contract assets of $3.8 million primarily due to growth in our revenue and the timing of invoices and payments, a decrease in deferred revenue of $11.1 due to the timing of billings for subscriptions and cash received in advance of revenue recognition, and a decrease in accrued expenses and other liabilities of $90.6 million due to the timing of cash disbursements primarily related to bonuses and commissions, the settlement of vested EARs and cash settled awards, interest payments and fees paid to Thoma Bravo. The outflows were partially offset by a decrease in accounts receivable of $60.0 million due to the timing of receipts of payments from customers and an increase in prepayments and other current assets of $15.0 million.
Current wording
During the six months ended July 31, 2025, cash used in operating activities was $46.9 million, which consisted of a net loss of $197.9 million, adjusted by non-cash charges of $240.2 million and a net decrease of $89.2 million in our net operating assets and liabilities. The non-cash charges are primarily comprised of depreciation and amortization expense of $104.5 million, equity-based compensation of $154.1 million, amortization of contract acquisition costs of $17.5 million, amortization of debt discount and issuance costs, including the early write-off of issuance costs related to the repayment of the Term Loans and termination of the 2022 Revolving Credit Facility of $17.1 million, provision for credit losses of $4.3 million and fair value adjustments to contingent consideration of $1.6 million, partially offset by deferred taxes of $58.9 million. The net cash outflow from changes in operating assets and liabilities was primarily a result of an increase in deferred contract acquisition costs of $26.6 million due to an increase in our sales, an increase in contract assets of $13.7 million primarily due to growth in our revenue and the timing of invoices and payments, a decrease in accrued expenses and other liabilities of $74.9 million due to the timing of cash disbursements primarily related to bonuses and commissions, the settlement of vested EARs and cash settled awards, interest payments and fees paid to Thoma Bravo, and an increase in prepayments and other current assets of $21.2 million. The outflows were partially offset by a decrease in accounts receivable of $46.3 million due to the timing of receipts of payments from customers.
Previous wording
During the three months ended April 30, 2024, cash used in operating activities was $55.4 million, which consisted of a net loss of $89.2 million, adjusted by non-cash charges of $52.3 million and a net decrease of $18.6 million in our net operating assets and liabilities. The non-cash charges are primarily comprised of depreciation and amortization expense of $66.0 million, equity-based compensation of $8.0 million, amortization of contract acquisition costs of $4.8 million, amortization of debt discount and issuance costs of $1.1 million and provision for credit losses of $0.4 million, partially offset by deferred taxes of$27.9 million. The decrease in our net operating assets and liabilities was primarily a result of a decrease in accrued expenses of$33.0 million due to the timing of cash disbursements, including commissions and bonuses, an increase in deferred contract acquisition costs of$11.0 million which has accelerated as subscription sales continue to grow, a decrease in deferred revenue of$10.8 million, an increase in prepayments and other assets of $4.8 million primarily for software maintenance and subscriptionsand a decrease in accounts payable of$5.3 million due to timing of cash disbursements. These were partially offset by a decrease in accounts receivable of$47.8 million due to the timing of receipts of payments from customers.
Current wording
During the six months ended July 31, 2024, cash used in operating activities was $108.2 million, which consisted of a net loss of $176.3 million, adjusted by non-cash charges of $104.1 million and a net decrease of $36.0 million in our net operating assets and liabilities. The non-cash charges are primarily comprised of depreciation and amortization expense of $132.1 million, equity-based compensation of $16.3 million, amortization of contract acquisition costs of $10.6 million, amortization of debt discount and issuance costs of $2.2 million and provision for credit losses of $0.7 million, partially offset by deferred taxes of$57.8 million. The net cash outflow from changes in operating assets and liabilities was primarily a result of a decrease in accrued expenses of$24.3 million due to the timing of cash disbursements, including commissions and bonuses, an increase in deferred contract acquisition costs of$26.2 million which has accelerated as subscription sales continue to grow, an increase in contract assets of$6.5 million, and an increase in prepayments and other assets, current and non current, of $6.8 million primarily for software maintenance and subscriptions. These were partially offset by a decrease in accounts receivable of$18.9 million due to the timing of receipts of payments from customers and an increase in deferred revenue of$9.4 million.
Previous wording
During the three months ended April 30, 2025, cash used in investing activities was $3.9 million, consisting primarily of $1.7 million for capitalized software development costs and $2.2 million in purchases of property and equipment.
Current wording
During the six months ended July 31, 2025, cash used in investing activities was $7.9 million, consisting primarily of $4.7 million for capitalized software development costs and $3.2 million in purchases of property and equipment.
Previous wording
During the three months ended April 30, 2024, cash used in investing activities was $7.7 million, consisting primarily of$4.6 million in net cash paid to acquire Double Zero, and$0.6 million in purchases of property and equipment.
Current wording
During the six months ended July 31, 2024, cash used in investing activities was $11.5 million, consisting primarily of$5.3 million for capitalized software development costs, $4.7 million in net cash paid to acquire Double Zero and$1.5 million in purchases of property and equipment.
Previous wording
During the three months ended April 30, 2025, cash provided by financing activities was $210.6 million primarily due to the proceeds from our IPO, net of underwriting discounts and commissions of $1,259.7 million, partially offset by the repayment of our Term Loans of $1,040.0 million, and payments of deferred offering costs of $8.4 million.
Current wording
During the six months ended July 31, 2025, cash provided by financing activities was $207.7 million primarily due to the proceeds from our IPO, net of underwriting discounts and commissions of $1,259.7 million, partially offset by the repayment of our Term Loans of $1,040.0 million, payments of deferred offering costs of $8.6 million and payments of debt issuance costs related to our 2025 Credit Agreement of $2.7 million.
Previous wording
During the three months ended April 30, 2024, cash used in financing activities was $1.8 million primarily due to the repurchase of Class A Units and Class B Units.
Current wording
During the six months ended July 31, 2024, cash used in financing activities was $2.2 million primarily due to the repurchase of Class A Units and Class B Units.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Our ability to deepen our penetration in international markets will depend on a number of factors, including the competitiveness of our solutions, the efficacy of our channel partner network, and our sales and marketing efforts.
Current report — wording carried from elsewhere
Cost of Subscription Revenue. Cost of subscription revenue increased $12.0 million, or 20%, for the three months ended July 31, 2025 compared to the three months ended July 31, 2024 primarily due to an increase in employee-related costs of $4.3 million due to higher headcount and increased investments in existing employees, an increase of $0.3 million related to equity-based awards, an increase in software and hosting costs of $5.4 million from the increase in sales of SaaS subscriptions, an increase in third-party royalties of $0.4 million, an increase in partner costs of $0.6 million, an increase in amortization of intangibles of $0.5 million and an increase in amortization of capitalized software of $0.4 million.
Current report — wording carried from elsewhere
Services and Other. Services and other gross profit decreased by $0.1 million during the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The decrease in gross profit is primarily due to lower revenue from professional services and training as a result of the shift toward selling these services on a subscription basis. Services and other gross profit margin remained consistent with the prior period and is primarily due to lower revenue from professional services and training as a result of the shift toward selling these services on a subscription basis.
Current report — wording carried from elsewhere
Services and Other Revenue. Services and other revenue decreased by $3.1 million, or 9%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. This decrease is primarily a result of a shift toward selling a higher proportion of professional services and training on a subscription basis.
Current report — wording carried from elsewhere
Sales and Marketing Expenses. Sales and marketing expenses increased by $61.4 million, or 26%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024. This increase was primarily driven by a $53.6 million increase in equity-based compensation due to the acceleration of awards from the completion of our IPO and the issuance of new equity-based awards, a $27.7 million increase in employee-based costs to support increased penetration into our existing customer base and expansion into new industry verticals and geographic markets, a $3.7 million increase in advertising and promotion costs, a $1.6 million increase for the fair value remeasurement of the contingent consideration related to the Imprivata acquisition, a $1.4 million increase in travel expenses, a $1.3 million increase in professional services fees, and a $1.1 million increase in software and hosting costs. This increase was partially offset by a $29.4 million decrease in intangible amortization attributable to certain intangible assets reaching full amortization.
Current report — wording carried from elsewhere
For further information, refer to Note 12 “Income Taxes” in our notes to our condensed consolidated financial statements included in this Quarterly Report.