BOX INC

Previous wording

A discussion regarding our financial condition and results of operations for the year ended January 31, 2025 compared to the year ended January 31, 2024 is presented below. A discussion regarding our financial condition and results of operations for the year ended January 31, 2024 compared to the year ended January 31, 2023 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2024, filed with the SEC on March 11, 2024, which is available on the SEC’s website atwww.sec.gov.

Current wording

A discussion regarding our financial condition and results of operations for the year ended January 31, 2026 compared to the year ended January 31, 2025 is presented below. A discussion regarding our financial condition and results of operations for the year ended January 31, 2025 compared to the year ended January 31, 2024 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2025, filed with the SEC on March 10, 2025, which is available on the SEC’s website at www.sec.gov.

Previous wording

With our SaaS platform, users can work with their content as they need – from secure external collaboration and workspaces to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration. Administrators have a wide range of security, data protection, and compliance features they can activate to help meet legal and regulatory requirements, internal policies, and industry standards. The Box platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications. With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it.

Current wording

With our SaaS platform, customers can work with their content as they need – from secure external collaboration and workspaces to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration. Administrators have a wide range of security, data protection, and compliance features they can activate to help meet legal and regulatory requirements, internal policies, and industry standards. The Box ICM platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications. With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it.

Previous wording

We offer our solution to our customers as a subscription-based service, with subscription fees based on the requirements of our customers, including the number of users and functionality deployed. The majority of our customers subscribe to our service through one-year contracts, although we also offer our services for terms ranging from one month to three years or more. We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract.

Current wording

We offer our solution to our customers as a subscription-based service, with subscription fees based on the requirements of our customers, including the number of users and functionality deployed. The duration of our contracts with customers ranges from one to three years or more, and we typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract.

Previous wording

For the years ended January 31, 2025 and 2024, our revenue was $1.090 billion and $1.038 billion, respectively, representing year-over-year growth of 5%, or 7% growth on a constant currency basis. As of January 31, 2025, our remaining performance obligations were $1.466 billion, representing a 12% increase from our remaining performance obligations of $1.305 billion as of January 31, 2024, or 14% growth on a constant currency basis. For the year ended January 31, 2025, our gross profit was $862.0 million, and our gross margin was 79.1%, compared to our gross profit of $777.1 million and our gross margin of 74.9% for the year ended January 31, 2024. For the year ended January 31, 2025, our operating income was $79.6 million and our operating margin was 7.3%, compared to our operating income of $50.8 million and our operating margin of 4.9% for the year ended January 31, 2024. For the year ended January 31, 2025, our net cash provided by operating activities was $332.3 million, an increase of 4% from net cash provided by operating activities of $318.7 million for the year ended January 31, 2024. For the year ended January 31, 2025, our non-GAAP free cash flow was $304.6 million, an increase of 13% from non-GAAP free cash flow of $269.0 million for the year ended January 31, 2024.

Current wording

For the years ended January 31, 2026 and 2025, our revenue was $1.18 billion and $1.09 billion, respectively, representing year-over-year growth of 8%, or 7% growth on a constant currency basis. As of January 31, 2026, our remaining performance obligations were $1.71 billion, representing a 17% increase from our remaining performance obligations of $1.47 billion as of January 31, 2025, or 16% growth on a constant currency basis. For the year ended January 31, 2026, our gross profit was $932.6 million, and our gross margin was 79.2%, compared to our gross profit of $862.0 million and our gross margin of 79.1% for the year ended January 31, 2025. For the year ended January 31, 2026, our operating income was $83.2 million and our operating margin was 7.1%, compared to our operating income of $79.6 million and our operating margin of 7.3% for the year ended January 31, 2025. For the year ended January 31, 2026, our net cash provided by operating activities was $356.5 million, a 7% increase from our net cash provided by operating activities of $332.3 million for the year ended January 31, 2025. For the year ended January 31, 2026, our non-GAAP free cash flow was $312.9 million, a 3% increase from our non-GAAP free cash flow of $304.6 million for the year ended January 31, 2025.

Previous wording

Box Archive, our solution that will provide advanced data preservation with long-term content storage. Box Archive is expected to be generally available in the first half of fiscal year 2026.

Current wording

Box Archive, our solution that provides advanced data preservation with long-term content storage.

Previous wording

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior. Economic conditions, including impacts from inflation, higher interest rates, tariffs, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, reductions in U.S. federal spending, the ongoing Russia-Ukraine conflict and the ongoing conflict in the Middle East, and other changes in economic conditions, may adversely affect our results of operations and financial performance. During the year ended January 31, 2025, in addition to headwinds from foreign exchange rate trends, we continued to see an impact from additional customer scrutiny being placed on larger deals and lower seat expansion rates due to the challenging macroeconomic environment. As a result, we have experienced, and may continue to experience, increased customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets for services that we offer. While we believe IT budgets have tightened and some larger deals have required more scrutiny across verticals and geographies, we also believe we are well-positioned to execute through these dynamic times as Box's ICM platform enables enterprises to streamline their businesses, drive up productivity, reduce risk, and lower costs.

Current wording

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior. Economic conditions, including impacts from inflation, higher interest rates, tariffs, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, government shutdowns, reductions in U.S. federal spending, the ongoing Russia-Ukraine conflict and conflicts in the Middle East, and other changes in economic conditions, may adversely affect our results of operations and financial performance. As a result, we may continue to experience customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets for services that we offer.

Previous wording

Remaining performance obligations (RPO) represent, at a point in time, contracted revenue that has not yet been recognized. RPO consists of deferred revenue and backlog. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation. While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance.

Current wording

Remaining performance obligations (RPO) represent, at a point in time, contracted revenue that has not yet been recognized. RPO consists of deferred revenue and backlog. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation. Short-term RPO consists of the portion that is expected to be recognized within the next 12 months. While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance.

Previous wording

RPO as of January 31, 2025 was $1.466 billion, an increase of 12% from January 31, 2024. The increase in RPO was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites. The increase in RPO was also driven by the addition of new customers and the timing of customer-driven renewals. RPO growth was impacted by 160 basis points from unfavorable foreign currency exchange rates.

Current wording

RPO as of January 31, 2026 was $1.71 billion, an increase of 17% from January 31, 2025. As of January 31, 2026, short-term RPO was $913.7 million, an increase of 12% from January 31, 2025, and long-term RPO was $797.0 million, an increase of 22% from January 31, 2025. The increase in RPO was driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the timing of customer-driven renewals, longer average contract terms, and the addition of new customers. RPO growth was favorably impacted by approximately 70 basis points due to fluctuations in foreign currency exchange rates.

Previous wording

Billings represent our revenue plus the changes in deferred revenue and contract assets in the period. Billings we record in any particular period primarily reflect subscription renewals and expansion within existing customers plus sales to new customers, and represent amounts invoiced for all of our products and professional services. We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments. If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings. If the customer negotiates to be invoiced annually or more frequently, only the amount billed for such period will be included in billings.

Current wording

Billings represent our revenue plus the changes in deferred revenue and contract assets in the period. Billings we record in any particular period primarily reflect subscription renewals and expansion within existing customers plus sales to new customers, and represent amounts invoiced for all of our products and professional services. We typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings. If the customer negotiates to be invoiced annually or more frequently, only the amount billed for such period will be included in billings.

Previous wording

Billings for the year ended January 31, 2025 were $1.110 billion, an increase of 5% from the year ended January 31, 2024. The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was impacted by 110 basis points from unfavorable foreign currency exchange rates.

Current wording

Billings for the year ended January 31, 2026 were $1.22 billion, an increase of 10% from the year ended January 31, 2025. The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was favorably impacted by approximately 170 basis points due to fluctuations in foreign currency exchange rates.

Previous wording

We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.

Current wording

We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.

Previous wording

Non-GAAP free cash flow for the year ended January 31, 2025 was $304.6 million, representing an increase of 13% from the year ended January 31, 2024. The increase in non-GAAP free cash flow was primarily driven by the reduction in payments of finance lease liabilities due to our migration to the public cloud from our collocated data centers and the increase in cash flows from operating activities, which is described in more detail under Liquidity and Capital Resources below. The increase was partially offset by an increase in capitalized internal-use software costs.

Current wording

Non-GAAP free cash flow for the year ended January 31, 2026 was $312.9 million, representing an increase of 3% from the year ended January 31, 2025. The increase in non-GAAP free cash flow was primarily driven by the increase in cash flows from operating activities and the reduction in payments of finance lease liabilities due to our migration to the public cloud from our collocated data centers, partially offset by a decrease in proceeds from sales of property and equipment, an increase in capitalized software costs, and an increase in purchases of property and equipment. The year-over-year changes in cash flows from operating activities are described in more detail under Liquidity and Capital Resources below.

Previous wording

A reconciliation of non-GAAP free cash flow to net cash provided by operating activities, its nearest GAAP equivalent, is presented in the non-GAAP Financial Measures section at the end of Item 7 of this Annual Report on

Current wording

A reconciliation of non-GAAP free cash flow to net cash provided by operating activities, its nearest GAAP equivalent, is presented in the non-GAAP Financial Measures section at the end of Item 7 of this Annual Report on Form 10-K. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

Previous wording

Our net retention rate was 102%, 101%, and 108% as of January 31, 2025, 2024 and 2023, respectively. Our net retention rate continues to be impacted by heightened budget scrutiny, putting pressure on seat expansion within existing customers and increased partial customer churn. As our customers purchase add-on products or our bundled plans, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product. We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, are significant factors in our customer retention results. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future.

Current wording

Our net retention rate was 104%, 102%, and 101% as of January 31, 2026, 2025 and 2024, respectively. Our net retention rate continues to be impacted by heightened budget scrutiny, putting pressure on seat expansion within existing customers and increased partial customer churn. As our customers purchase add-on products or our bundled plans, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product. We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, are significant factors in our customer retention results. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future.

Previous wording

We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription and premier services ratably over the contract term. We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments. Our subscription and premier services contracts are typically non-cancellable and do not contain refund-type provisions. The majority of our customers subscribe to our service through one-year contracts, although we also offer our services for terms ranging between one month to three years or more.

Current wording

We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription and premier services ratably over the contract term. The duration of our contracts with customers ranges from one to three years or more, and we typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. Our subscription and premier services contracts are typically non-cancellable and do not contain refund-type provisions.

Previous wording

Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, public cloud hosting costs, depreciation of servers and equipment, security services and other tools, as well as amortization expense associated with acquired technology and capitalized internally developed software. We allocate overhead such as rent, information technology costs and employee benefit costs to all departments based on headcount. As such, general overhead expenses are reflected in cost of revenue and each of the operating expense categories set forth below.

Current wording

Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, public cloud hosting costs, depreciation of servers and equipment, security services and other tools, as well as amortization expense associated with acquired technology and capitalized software development. We allocate overhead such as facilities, information technology costs and employee benefit costs to all departments based on headcount. As such, general overhead expenses are reflected in cost of revenue and each of the operating expense categories set forth below.

Previous wording

Interest expense consists primarily of interest charges for our line of credit and convertible senior notes, interest expense related to finance leases, and the amortization of issuance costs of our convertible senior notes.

Current wording

Interest expense consists primarily of interest charges and the amortization of issuance costs for our convertible senior notes.

Previous wording

Other expense, net consists of gains and losses from foreign currency transactions and other income and expense. Other expense, net consists primarily of induced conversion expense related to our 2026 Convertible Notes.

Current wording

Other income (expense), net consists primarily of gains and losses from foreign currency transactions and foreign currency forward contracts not designated as cash flow hedges.

Previous wording

(Benefit from) provision for income taxes consists primarily of state and foreign income taxes payable and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions.

Current wording

Benefit from income taxes consists primarily of U.S. and foreign income taxes and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions.

Previous wording

The $52.4 million, or 5%, increase in revenue during the year ended January 31, 2025 was primarily driven by seat growth in existing customers, continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus, and strong growth in Japan. For the year ended January 31, 2025, our Suites attach rate was 85% in deals over $100,000, an increase from 78% for the year ended January 31, 2024. The increase was partially offset by the weakening of foreign currency exchange rates, which negatively impacted our revenue growth rate by 210 basis points, and customers partially churning their deployment with Box.

Current wording

The $87.1 million, or 8%, increase in revenue during the year ended January 31, 2026 was primarily driven by seat growth, net of churn in existing customers and continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus and Enterprise Advanced. The increase was also impacted by the strengthening of foreign currency exchange rates, which positively impacted our revenue growth rate by approximately 80 basis points.

Previous wording

The $32.5 million, or 12%, decrease in cost of revenue during the year ended January 31, 2025 was primarily due to decreases of $27.3 million in depreciation expense and $20.1 million in bandwidth and data center related expense due to the completion of our migration to the public cloud from our collocated data centers. Additionally, there was an increase of $4.3 million in gains related to the sale of data center assets and decreases of $1.1 million in consulting services, $1.0 million in subscription software contract expense, and $0.9 million in workforce reorganization costs, which were incurred in the prior year. This decrease was partially offset by an increase of $25.0 million in public cloud infrastructure costs, driven by our migration to the public cloud from our collocated data centers. Cost of revenue as a percentage of revenue decreased 420 basis points year-over-year.

Current wording

The $16.5 million, or 7%, increase in cost of revenue during the year ended January 31, 2026 was primarily due to a $13.7 million increase in amortization of capitalized software, a $7.9 million increase in public cloud infrastructure costs, and a decrease of $4.5 million in gains related to the sale of data center assets due to the completion of our migration to the public cloud from our collocated data centers. This increase was partially offset by a decrease of $4.8 million in subscription software contract expense and decreases of $4.1 million in bandwidth and data center related expense and $1.3 million in contractor related costs due to the completion of our migration to the public cloud from our collocated data centers. Cost of revenue as a percentage of revenue decreased approximately 10 basis points year-over-year.

Previous wording

The $16.1 million, or 6%, increase in research and development expense during the year ended January 31, 2025 was primarily due to increases of $15.5 million and $11.1 million in employee related costs and stock-based compensation expense, respectively, driven by a 22% increase in headcount. The increased employee headcount and related costs are driven by the growth in lower cost regions. This increase was partially offset by an increase of $12.1 million in capitalized internally developed software costs. Research and development expenses as a percentage of revenue remained flat year-over-year.

Current wording

The $29.7 million, or 11%, increase in research and development expense during the year ended January 31, 2026 was primarily due to increases of $18.4 million and $6.6 million in employee related costs and stock-based compensation expense, respectively, driven by a 5% increase in headcount. The increased employee headcount and related costs are primarily driven by the growth in lower cost regions. Additionally, we had increases of $4.8 million in workforce reorganization expenses, $4.7 million in subscription software contract expense, $3.3 million in office related costs, and $2.5 million in public cloud infrastructure costs. The increase was partially offset by an increase of $10.6 million in capitalized internally developed software costs. Research and development expenses as a percentage of revenue increased approximately 100 basis points year-over-year.

Previous wording

The $31.5 million, or 9%, increase in sales and marketing expense during the year ended January 31, 2025 was primarily due to increases of $13.0 million and $9.7 million in employee related costs and stock-based compensation expense, respectively, driven by a 7% increase in headcount, and $9.6 million in marketing expenses, driven by increased costs related to marketing events. Sales and marketing expenses as a percentage of revenue increased 100 basis points year-over-year.

Current wording

The $23.8 million, or 6%, increase in sales and marketing expense during the year ended January 31, 2026 was primarily due to increases of $10.6 million and $1.4 million in employee related costs and stock-based compensation expense, respectively, driven by a 5% increase in headcount, $3.1 million in workforce reorganization expenses, and $2.0 million in subscription software contract expense. Additionally, we had increases of $1.9 million in office related costs, $1.8 million in commission expenses, $1.7 million in consulting services, and $1.6 million in marketing expenses. Sales and marketing expenses as a percentage of revenue decreased approximately 100 basis points year-over-year.

Previous wording

The $8.4 million, or 7%, increase in general and administrative expense during the year ended January 31, 2025 was primarily due to increases of $4.8 million and $3.3 million in employee related costs and stock-based compensation expense, respectively, driven by a 9% increase in headcount. General and administrative expense as a percentage of revenue increased 100 basis points year-over-year.

Current wording

The $13.5 million, or 10%, increase in general and administrative expense during the year ended January 31, 2026 was primarily due to increases of $6.3 million and $3.4 million in stock-based compensation expense and employee related costs, respectively, driven by a 4% increase in headcount. Additionally, we had increases of $1.3 million in workforce reorganization expenses, $1.0 million in subscription software contract expense, and $1.0 million in litigation expense. General and administrative expense as a percentage of revenue remained flat year-over-year.

Previous wording

The $5.0 million increase during the year ended January 31, 2025 was primarily due to an increase of $5.0 million in interest income on cash and cash equivalents and short-term investments due to higher cash and short-term investment balances.

Current wording

The $1.0 million increase during the year ended January 31, 2026 was primarily due to an increase in interest income on cash and cash equivalents and short-term investments due to higher average cash and short-term investment balances, partially offset by lower interest rates on our investments.

Previous wording

The $2.2 million increase during the year ended January 31, 2025 was primarily due to an increase of $2.9 million in interest expense related to the Convertible Notes, particularly the 2029 Convertible Notes, which bear interest at a rate of 1.50% per year. This increase was partially offset by a decrease of $0.8 million in interest expense related to our finance leases.

Current wording

The $4.6 million increase during the year ended January 31, 2026 was primarily due to an increase of $5.4 million in interest expense related to the 2029 Convertible Notes, which bear interest at a rate of 1.50% per year compared to the 0.00% convertible notes that matured in 2026 (the "2026 Convertible Notes" and together with the 2029 Convertible Notes, the "Convertible Notes").

Previous wording

The $9.1 million increase in other expense, net during the year ended January 31, 2025 was primarily due to the convertible debt inducement expense of $10.1 million. This increase was partially offset by a decrease of $1.4 million in foreign currency losses.

Current wording

The $13.6 million increase during the year ended January 31, 2026 was primarily due to the convertible debt inducement expense of $10.1 million recognized during the year ended January 31, 2025 and an increase of $3.1 million in net foreign currency gains.

Previous wording

As of January 31, 2025, we had cash and cash equivalents, restricted cash, and short-term investments of $724.4 million. During the year ended January 31, 2025, we generated operating cash flow of $332.3 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing. We believe our existing cash, cash equivalents, and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond. Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, settlement of our convertible senior notes and convertible preferred stock, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. 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.

Current wording

As of January 31, 2026, we had cash and cash equivalents, restricted cash, and short-term investments of $479.6 million. During the year ended January 31, 2026, we generated operating cash flow of $356.5 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing. We believe our existing cash, cash equivalents, and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond. Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, settlement of our convertible senior notes and convertible preferred stock, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. 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.

Previous wording

The primary drivers for the changes in operating assets and liabilities include a $52.3 million increase in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, a $28.1 million decrease in operating lease liabilities due to recurring lease payments, and a $14.5 million increase in accounts receivable primarily due to timing of our cash collections. These cash outflows were partially offset by a $27.7 million increase in deferred revenue, and a $23.3 million decrease in operating right-of-use assets due to amortization.

Current wording

The $1.0 million increase in net cash provided from changes in operating assets and liabilities was primarily due to a $19.2 million change in deferred revenue due to the timing of revenue recognition, a $2.1 million change in other assets due to the timing of prepayments, and a $2.0 million change in operating lease liabilities due to recurring lease payments. These were partially offset by a $16.7 million change in accounts receivable due to the timing of our cash collections, a $4.1 million change in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, and a $1.7 million change in operating lease right-of-use assets due to amortization.

Previous wording

Cash used in investing activities of $23.2 million for the year ended January 31, 2025 was primarily driven by $121.3 million in purchases of short-term investments, $27.6 million in capitalized internal-use software costs, $3.5 million in cash paid for an acquisition, and $2.6 million of fixed asset purchases. These cash outflows were partially offset by $123.5 million in maturities and sales of short-term investments and $8.4 million in proceeds from sales of property.

Current wording

The $19.5 million increase in net cash used in investing activities for the year ended January 31, 2026 compared to the year ended January 31, 2025 was primarily due to a $20.9 million decrease in maturities and sales of short-term investments, an $8.1 million decrease in proceeds from sales of property and equipment, and a $7.5 million increase in capitalized software costs, partially offset by a $17.0 million decrease in purchases of short-term investments.

Previous wording

Cash used in financing activities of $62.4 million for the year ended January 31, 2025 was primarily driven by $211.1 million in repurchases of our common stock, $191.7 million paid for the partial repurchase of the 2026 Convertible Notes, $79.3 million of employee payroll taxes paid related to net share settlement of stock awards, $52.5 million for the purchase of capped calls related to the 2029 Convertible Notes, $30.0 million principal payments on the revolving loan facility, and $15.0 million of dividend payments to preferred stockholders. These cash outflows were partially offset by $447.8 million in proceeds from the issuance of the 2029 Convertible Notes, net of issuance costs, $30.3 million in proceeds from the settlement of capped calls related to the 2026 Convertible Notes, $25.9 million from issuances of common stock under our employee equity plans, and $19.1 million proceeds from exercise of stock options.

Current wording

The $507.2 million increase in net cash used in financing activities for the year ended January 31, 2026 compared to the year ended January 31, 2025 was primarily due to nonrecurring activities that were recognized during the year ended January 31, 2025, including $447.8 million in proceeds from the issuance of the 2029 Convertible Notes, net of issuance costs and $30.3 million in proceeds from the settlement of capped calls related to the 2026 Convertible Notes (the “2026 Capped Calls” and together with the 2029 Capped Calls, the “Capped Calls”), partially offset by $191.7 million paid for the partial repurchase of our 2026 Convertible Notes, $52.5 million for the purchase of 2029 Capped Calls, and $30.0 million used for principal payments on our secured credit agreement. Additionally, the decrease was driven by $205.0 million used for remaining principal payments upon the maturity of the 2026 Convertible Notes during the year ended January 31, 2026, a $78.8 million increase used for repurchases of our common stock, and a $17.6 million decrease in proceeds from the exercise of stock options.

Previous wording

In September 2024, using proceeds from the issuance of the 2029 Convertible Notes, we entered into separate and privately negotiated transactions with certain holders of the 2026 Convertible Notes to repurchase $140.0 million aggregate principal amount of the 2026 Convertible Notes.

Current wording

In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026. In September 2024, using proceeds from the issuance of the 2029 Convertible Notes, we entered into separate and privately negotiated transactions with certain holders of the 2026 Convertible Notes to repurchase $140.0 million aggregate principal amount of the 2026 Convertible Notes. Upon maturity in 2026, we settled in full the $205.0 million outstanding principal amount in cash.

Previous wording

In June 2023, we entered into an amended and restated secured credit agreement (the "June 2023 Facility") to provide for a $150.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit. In September 2024, we paid down our $30.0 million debt outstanding and had no outstanding debt as of January 31, 2025. In December 2024, we entered into Amendment No. 1 to the June 2023 Facility to decrease the revolving commitments from $150.0 million to $75.0 million and maintain the $45.0 million letter of credit sublimit.

Current wording

In June 2023, we entered into an amended and restated secured credit agreement (the “June 2023 Facility”) and in December 2024, we entered into Amendment No. 1 to the June 2023 Facility to provide for a $75.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit. As of January 31, 2026, we had no debt outstanding on the June 2023 Facility.

Previous wording

Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions. During the year ended January 31, 2025, we repurchased 7.6 million shares at a weighted average price of $27.90 per share for a total amount of $211.5 million. As of January 31, 2025, $52.0 million remained authorized and available for additional repurchases.

Current wording

Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions. On December 2, 2025, we announced that our Board of Directors authorized a $150 million expansion of the share repurchase plan. During the year ended January 31, 2026, we repurchased 9.7 million shares at a weighted average price of $30.35 per share for a total amount of $292.9 million. As of January 31, 2026, $59.2 million remained authorized and available for additional repurchases.

Previous wording

Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the consolidated balance sheet as of January 31, 2025, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under our June 2023 Facility and Convertible Notes. For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 6, 8, and 9, respectively, in Part II, Item 8 of this Annual Report on Form 10-K.

Current wording

Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the consolidated balance sheet as of January 31, 2026, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under our June 2023 Facility and 2029 Convertible Notes. For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 7, 8, and 9, respectively, in Part II, Item 8 of this Annual Report on Form 10-K.

Previous wording

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts we believe are more likely than not to be realized. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, within the carry-back or carry-forward periods available under the applicable tax law. In assessing our need for a valuation allowance, we consider available evidence, including past operating results, expirations or limitations of tax attributes, estimated future taxable income, and the feasibility of tax planning strategies. Our judgment regarding future estimates may change due to many factors, including future market conditions and the ability to successfully execute our business plans and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our provision for income taxes would increase or decrease in the period in which the assessment is changed. A release of a valuation allowance would result in the recognition of certain deferred tax assets and material income tax benefit in the period of release. As of January 31, 2025, we evaluated all negative and positive evidence and determined that the U.S. federal and state deferred tax assets, with the exception of California, are more likely than not to be realizable resulting in an income tax benefit of $201.2 million. As of January 31, 2025, we maintained our valuation allowance associated with the California state deferred tax assets. As of January 31, 2024, we evaluated all negative and positive evidence and determined that the U.K. deferred tax assets are more likely than not to be realizable resulting in an income tax benefit of $79.1 million. Refer to Note 13 in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Current wording

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts we believe are more likely than not to be realized. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, within the carry-back or carry-forward periods available under the applicable tax law. In assessing our need for a valuation allowance, we consider available evidence, including past operating results, expirations or limitations of tax attributes, estimated future taxable income, and the feasibility of tax planning strategies. Our judgment regarding future estimates may change due to many factors, including future market conditions and the ability to successfully execute our business plans and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our provision for income taxes would increase or decrease in the period in which the assessment is changed. A release of a valuation allowance would result in the recognition of certain deferred tax assets and material income tax benefit in the period of release. As of January 31, 2026 and 2025, we evaluated all negative and positive evidence and determined that our net deferred tax assets, with the exception of those in California, are more likely than not to be realizable.

Previous wording

Non-GAAP net income attributable to common stockholders and non-GAAP net income per share attributable to common stockholders

Current wording

Non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to common stockholders, and non-GAAP net income per share attributable to common stockholders.

Previous wording

We define non-GAAP operating income as GAAP operating income excluding expenses related to stock-based compensation, acquired intangible assets amortization, and as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue. Although stock-based compensation is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Management also views amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology and trade names, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense that is not typically affected by operations during any particular period. We also exclude the following expenses as they are considered by management to be special items outside of our core operating results: (1) fees related to shareholder activism, (2) expenses related to certain litigation, (3) expenses associated with a non-recurring workforce reorganization, consisting primarily of severance and other personnel-related costs, and (4) expenses related to acquisitions.

Current wording

We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, acquired intangible assets amortization, and as applicable, other special items. Although stock-based compensation is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Management also views amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology and trade names, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense that is not typically affected by operations during any particular period. We exclude the following expenses as they are considered by management to be special items outside of our core operating results: (1) expenses related to certain litigation, (2) expenses associated with a non-recurring workforce reorganization, consisting primarily of severance and other personnel-related costs, and (3) expenses related to acquisitions. In addition to these expenses, we exclude the following items to calculate non-GAAP net income attributable to common stockholders: (1) amortization of debt issuance costs, (2) induced conversion of convertible notes, (3) the income tax benefit from the release of a valuation allowance on deferred tax assets, (4) non-recurring benefits of federal R&D credits carryforwards and related UTP, (5) the income tax effects of non-GAAP adjustments, and (6) undistributed earnings attributable to preferred stockholders. Non-GAAP operating margin is defined as non-GAAP operating income as a percentage of revenue. Non-GAAP net income per share attributable to common stockholders is defined as non-GAAP net income attributable to common stockholders divided by the weighted-average outstanding shares.

Previous wording

We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business. We specifically identify adjusting items in our reconciliation of GAAP to non-GAAP financial measures. We consider non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening ​the​ balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

Current wording

We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized software development costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business. We specifically identify adjusting items in our reconciliation of GAAP to non-GAAP financial measures. We consider non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening the balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.