Operating Leases

3 Months Ended

Apr. 30, 2023

Note 6: Operating Leases

The Company leases its headquarters located in Sunnyvale, California, as well as office space and data center facilities in several locations under non-cancelable operating lease agreements, with expiration dates through fiscal 2033.

Supplemental balance sheet information related to leases was as follows (in thousands):


		As of
	April 30, 2023		January 31, 2023
Assets
Operating lease right-of-use assets	$	16,887	$	12,702
Total leased assets	$	16,887	$	12,702
Liabilities
Short-term operating lease liabilities	$	4,165	$	3,617
Long-term operating lease liabilities		13,987		10,426
Total lease liabilities	$	18,152	$	14,043

Weighted-average remaining lease term		6.0 years		4.8 years
Weighted-average discount rate		3.1%		4.5%

Operating lease right-of-use assets and long-term operating lease liabilities are included on the face of the consolidated balance sheet. Short-term operating lease liabilities are presented within accrued expenses and other current liabilities.

The Company incurred total lease costs in its consolidated statements of operations of $1.3 million and $1.2 million for the three months ended April 30, 2023 and 2022, respectively. Additionally, in the third quarter of fiscal 2023, the Company recorded facilities consolidation charges of $1.4 million to general and administrative expense, which included $1.3 million for right-of-use asset impairment and $0.1 million for fixed asset impairment, in connection with leased office facilities assumed in the OnSIP acquisition that the Company subsequently determined were not needed to support the future growth of its business. The Company vacated the facility subsequently but remains contractually obligated to the lessor for the underlying lease. As of April 30, 2023, the carrying amount of the acquired OnSIP lease liability on the consolidated balance sheet was approximately $1.1 million.

In August, 2022, the Company entered into a new operating lease agreement to expand its warehouse facilities and customer contact center in Newark, California to scale with the Company’s business growth. The lease commenced in March 2023 and will expire in March 2033. Total rental payments are approximately $6.9 million from the commencement date through the expiration date.

Supplemental cash flow information related to leases was as follows (in thousands):


		Three Months Ended
	April 30, 2023		April 30, 2022
Cash payments for operating leases	$	897	$	822
Right-of-use assets recognized in exchange for new operating lease obligations	$	4,902	$	316

As of April 30, 2023, maturities of operating lease liabilities were as follows (in thousands):


Fiscal Years Ending January 31,	April 30, 2023
2023 remainder	$	3,186
2024		4,345
2025		3,745
2026		2,385
2027		2,312
Thereafter		5,789
Total future minimum lease payments		21,762
Less: imputed interest		(3,610)
Present value of lease liabilities	$	18,152