SailPoint, Inc.
For the period ended Oct 31, 2025. Filed Dec 10, 2025.
View on SEC.govAbout this filing
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.
Oct 31, 2025 · Filed Dec 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 2025-07-31; filed 2025-09-10.
0002030781-25-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-10.
0002030781-25-000051
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 184 previous paragraphs and 188 current paragraphs.
135 unchanged; 46 reworded; 5 added; 1 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 24 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 (5)
Current report
On September 15, 2025, the Company acquired certain assets of Security Savvy LLC, a third-party SaaS security platform that helps organizations manage identity-related risks associated with their SaaS applications, for $18.4 million, which includes $0.5 million in direct transaction costs that were capitalized as a component of the consideration transferred. The transaction was accounted for as an asset acquisition and substantially all of the acquired assets consisted of developed technology. The purchase price consideration was allocated to a developed technology intangible asset of $18.2 million and assembled workforce intangible of $0.5 million, with useful lives of 6 years and 3 years, respectively. Approximately $0.3 million was allocated to deferred revenue, current and $0.1 million in accounts receivable. See Note 5 "Acquisitions" in the notes to our condensed consolidated financial statements for additional information.
Current report
Comparison of the Nine Months Ended October 31, 2025 and 2024
Current report
Our adjusted subscription gross profit margin (adjusted subscription gross profit as a percentage of subscription revenue) for the three months ended October 31, 2025 and 2024 has decreased slightly, primarily due to higher cost of subscription revenue from higher employee-related costs.
Current report
Our adjusted subscription gross profit margin for the nine months ended October 31, 2025 has remained generally consistent and reflects the high value-added nature of our offerings.
Current report
Our free cash flow for the nine months ended October 31, 2025 increased when compared to the nine months ended October 31, 2024, primarily due to higher revenue growth and an increase in cash flows from operations. Free cash flow for the nine months ended October 31, 2025 includes $78.5 million of cash paid to settle equity related awards, cash awards and their associated payroll taxes upon the closing of our IPO, $36.7 million in cash paid for interest expense related to our 2022 Credit Agreement and $9.3 million of cash paid for fees under our advisory services agreement with Thoma Bravo, which was terminated upon the closing of our IPO.
Removed paragraphs (1)
Previous report
Comparison of the Six Months Ended July 31, 2025 and 2024
Reworded paragraphs (46)
Previous wording
We continue to be controlled by Thoma Bravo following the Corporate Conversion and the IPO. After giving effect to the Corporate Conversion and the closing of the IPO, Thoma Bravo controls approximately 86.2% of the voting power of the Company.
Current wording
We continue to be controlled by Thoma Bravo following the Corporate Conversion and the IPO. After giving effect to the Corporate Conversion and the closing of the IPO, Thoma Bravo controlled approximately 86.2% of the voting power of the Company.
Previous 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.
Current wording
The number of customers with $250,000 or more of ARR as of October 31, 2025 increased 28% on a year-over-year basis, and the number of customers with over $1,000,000 of ARR as of October 31, 2025 increased 39% on a year-over-year basis.
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. 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.
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 67% and 66% of our revenue from the United States for the three and nine months ended October 31, 2025, respectively. We generated 19% of our revenue from EMEA and 14% from the rest of the world, billed primarily in U.S. dollars, for both the three and nine months ended October 31, 2025.
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 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.
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 64% as of October 31, 2025 from 60% as of October 31, 2024. We believe the share of ARR generated by our SaaS solution will continue to increase over time.
Previous 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.
Current wording
Subscription Revenue. Subscription revenue increased by $48.5 million, or 22%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024 primarily due to an increase in SaaS revenue and term subscription revenue from our shift in focus on selling subscriptions to new customers and expanding our footprint with existing customers.
Previous 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.
Current wording
Perpetual License Revenue. License revenue decreased by $0.2 million for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The decrease was not considered significant and we continue to emphasize 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 $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.
Current wording
Services and Other Revenue. Services and other revenue decreased by $1.6 million, or 9% for the three months ended October 31, 2025 compared to the three months ended October 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 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 wording
Cost of Subscription Revenue. Cost of subscription revenue increased $16.2 million, or 27%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024 primarily due to an increase in employee-related costs of $8.8 million due to higher headcount and increased investments in existing employees, an increase in software and hosting costs of $3.7 million from the increase in sales of SaaS subscriptions, an increase of $1.4 million related to equity-based awards, an increase in amortization of intangible assets of $1.0 million, an increase in third-party royalties of $0.3 million, an increase in partner costs of $0.5 million, and an increase in amortization of capitalized software of $0.4 million.
Previous 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.
Current wording
Cost of Perpetual Licenses. Cost of perpetual licenses were not significant during either the three months ended October 31, 2025 or 2024. Such cost decreased for the three months ended October 31, 2025 compared to the three months ended October 31, 2024 primarily due to our shift in focus on selling subscriptions to new and existing customers.
Previous wording
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 wording
Cost of Services and Other. Cost of services and other increased by $0.7 million, or 4%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024, remaining materially consistent with the prior period.
Previous 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.
Current wording
Subscription. Subscription gross profit increased by $32.3 million, or 21%, during the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The increase was primarily due to the growth in subscription revenue. Subscription gross profit margin was 71% for the three months ended October 31, 2025 and 72% for the three months ended October 31, 2024. The change was materially consistent with the prior period.
Previous 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.
Current wording
Perpetual Licenses. License gross profit decreased during the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The decrease 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
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 wording
Services and Other. Services and other gross profit decreased by $2.4 million during the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The decrease in gross profit and gross profit margin 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, with cost remaining higher due to higher equity based compensation from the prior year.
Previous 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.
Current wording
Total gross profit increased by $29.7 million, or 19%, during the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The increase is primarily due to the growth in total revenue. Total gross profit margin was 66% for the three months ended October 31, 2025 and 67% for the three months ended October 31, 2024. Total gross profit margin was materially consistent with the prior period.
Previous wording
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 wording
Research and Development Expenses. Research and development expenses increased by $12.0 million, or 30%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. This increase was primarily driven by a $6.5 million increase in employee-based costs due to continued investment in talent related to the development of our products, a $3.8 million increase in equity-based compensation from the issuance of equity-based awards upon the closing of the IPO, and a $1.7 million increase in software and hosting costs.
Previous 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.
Current wording
Sales and Marketing Expenses. Sales and marketing expenses increased by $22.7 million, or 20%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. This increase was primarily driven by a $16.2 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 $7.3 million increase in equity-based compensation from the issuance of equity-based awards upon the closing of the IPO, a $1.1 million increase in advertising and promotion costs, a $0.4 million increase in software and hosting costs, and a $0.1 million increase in travel expenses. This increase was partially offset by a $2.0 million decrease in intangible asset amortization attributable to certain intangible assets reaching full amortization and a $0.5 million decrease in professional services fees.
Previous wording
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 wording
General and Administrative Expenses. General and administrative expenses increased by $12.2 million, or 45%, for the three months ended October 31, 2025 compared to the three months ended October 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 $2.2 million increase in employee-related costs due to higher headcount and increased investments in personnel, and a $0.8 million increase in software and hosting costs. This increase was partially offset by a $4.8 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.
Previous 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.
Current wording
Total other income (expense) decreased by $47.7 million, or 102%, for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. This decrease was primarily due to a $46.3 million net decrease in interest expense due to the full repayment of our Term Loans and a $2.0 million increase in interest income due to an increase in our cash and cash equivalents, partially offset by a $0.6 million increase in other expense related to foreign currency exchange loss. The overall decrease resulted in other income of $0.8 million for the three months ended October 31, 2025.
Previous wording
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 wording
The Company recorded an income tax benefit of $4.8 million for the three months ended October 31, 2025 compared to an income tax benefit of $11.9 million for the three months ended October 31, 2024, leading to a net benefit decrease of $7.1 million, or 60%, year-over-year. The decrease is primarily due to certain non-deductible equity-based compensation and non-deductible executive officer compensation.
Previous wording
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 wording
Subscription Revenue. Subscription revenue increased by $159.9 million, or 28%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024 primarily due to an increase in SaaS revenue and term subscription revenue from our shift in focus on selling subscriptions to new customers and expanding our footprint with existing customers.
Previous wording
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 wording
Perpetual License Revenue. License revenue increased by $0.1 million for the nine months ended October 31, 2025 compared to the nine months ended October 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 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 $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 wording
Services and Other Revenue. Services and other revenue decreased by $4.7 million, or 9%, for the nine months ended October 31, 2025 compared to the nine months ended October 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 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.
Current wording
Cost of Subscription Revenue. Cost of subscription revenue increased $48.5 million, or 28%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024 primarily due to an increase in employee-related costs of $18.1 million due to higher headcount and increased investments in personnel, an increase of $11.2 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 $13.2 million from the increase in sales of SaaS subscriptions, an increase in partner costs of $1.6 million, an increase in third-party royalties of $1.1 million, an increase in amortization of intangibles of $1.8 million and an increase in amortization of capitalized software of $1.1 million.
Previous 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.
Current wording
Cost of Services and Other. Cost of services and other increased by $10.5 million, or 20%, for the nine months ended October 31, 2025 compared to the nine months ended October 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
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 wording
Subscription. Subscription gross profit increased by $111.3 million, or 28%, during the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. The increase was primarily due to the growth in subscription revenue. Subscription gross profit margin was 69% for both the nine months ended October 31, 2025 and October 31, 2024. Subscription gross profit margin remained materially consistent with the prior period.
Previous wording
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 wording
Perpetual Licenses. License gross profit increased during the nine months ended October 31, 2025 compared to the nine months ended October 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
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.
Current wording
Services and Other. Services and other gross profit decreased by $15.2 million during the nine months ended October 31, 2025 compared to the nine months ended October 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 (31)% for the nine months ended October 31, 2025 and 1% for the nine months ended October 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
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 wording
Total gross profit increased by $96.4 million, or 24%, during the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. The increase is primarily due to the growth in total revenue. Total gross profit margin was 63% for the nine months ended October 31, 2025 and 64% for the nine months ended October 31, 2024. Total gross profit margin remained materially consistent with the prior period.
Previous 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.
Current wording
Research and Development Expenses. Research and development expenses increased by $42.3 million, or 34%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. This increase was primarily driven by a $26.3 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 $10.3 million increase in employee-based costs due to continued investment in talent related to the development of our products and a $5.1 million increase in software and hosting costs.
Previous wording
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 wording
Sales and Marketing Expenses. Sales and marketing expenses increased by $84.1 million, or 24%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. This increase was primarily driven by a $60.9 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 $44.0 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 $4.8 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 $1.6 million increase in travel expenses, a $0.8 million increase in professional services fees, and a $1.6 million increase in software and hosting costs. This increase was partially offset by a $31.5 million decrease in intangible amortization attributable to certain intangible assets reaching full amortization.
Previous 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.
Current wording
General and Administrative Expenses. General and administrative expenses increased by $78.8 million, or 98%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. This increase was primarily driven by a $78.8 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 $5.3 million increase in employee-related costs due to higher headcount and increased investments in existing employees, a $2.8 million increase in provision for credit losses, a $1.8 million increase in software and hosting costs, and a $0.3 million increase in travel expenses. This increase was partially offset by a $10.9 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
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 wording
Total other income (expense) decreased by $120.1 million, or 86%, for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024. This decrease was primarily due to a $115.8 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 $4.5 million increase in interest income due to an increase in our cash and cash equivalents, partially offset by a $0.1 million increase in other expense related to foreign currency exchange loss.
Previous 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.
Current wording
The Company recorded an income tax benefit of $53.2 million for the nine months ended October 31, 2025 compared to an income tax benefit of $62.5 million for the nine months ended October 31, 2024, leading to a net benefit decrease of $9.4 million, or 15%, 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.
Previous wording
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 wording
Our adjusted income from operations and adjusted operating margin increased for the nine months ended October 31, 2025 compared to the three months ended October 31, 2024, primarily due to the growth in our overall business and increased operating leverage.
Previous wording
Our primary sources of liquidity are cash flows from operations, issuance of Class A Units and Class B Units, issuance of our common stock in the IPO and debt financing. Our primary uses of liquidity are debt payments, offering costs, operating expenses, working capital requirements, and capital expenditures.
Current wording
Our primary sources of liquidity are cash flows from operations, issuance of Class A Units and Class B Units, issuance of our common stock in the IPO and debt financing. Our primary uses of liquidity are debt payments, offering costs, operating expenses, working capital requirements, capital expenditures and acquisitions.
Previous wording
Cash flows from operations have been historically negative as we continue to develop and expand our products and services and increase our sales and marketing efforts.
Current wording
Cash flows from operations have been historically negative as we continue to develop and expand our products and services and increase our sales and marketing efforts. For the nine months ended October 31, 2025, we had positive cash flows from operations.
Previous 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.
Current wording
As of October 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $298.1 million and our 2025 Revolving Credit Facility as described further below. We have restricted cash of $6.3 million as of October 31, 2025 primarily related to unconditional standby letters of credit for our corporate headquarters and for our corporate credit card program.
Previous wording
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 wording
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. The Company had no outstanding 2025 Revolving Credit Facility balance and was in compliance with all applicable covenants as of October 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.
Previous 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.
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 for the nine months ended October 31, 2025. The extinguishment of debt associated with the Term Loans and with the 2022 Revolving Credit Facility is recorded within interest expense on the condensed consolidated statements of operations.
Previous 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.
Current wording
As of October 31, 2025, we had $298.1 million of cash and cash equivalents (of which $23.1 million was held in our foreign subsidiaries), $250.0 million of availability under the 2025 Credit Agreement, and $568.0 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.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Cost of Perpetual Licenses. Cost of perpetual licenses were not significant during either the nine months ended October 31, 2025 or 2024. We continue to emphasize transitioning our sales effort from perpetual license solutions to subscriptions. We expect our cost of perpetual license to continue to not be significant.
Current report — wording carried from elsewhere
Our adjusted income from operations and adjusted operating margin increased for the three months ended October 31, 2025 compared to the three months ended October 31, 2024 but has remained generally consistent and reflects the high value-added nature of our offerings.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
Our adjusted subscription gross profit margin (adjusted subscription gross profit as a percentage of subscription revenue) has remained generally consistent in recent periods and reflects the high value-added nature of our offerings.