Leases

12 Months Ended

Jan. 31, 2022

Note 6. Leases

We have entered into various non-cancellable operating lease agreements for certain of our offices and data centers with lease periods expiring primarily between fiscal years 2023 and 2029. Certain of these arrangements have free or escalating rent payment provisions and optional renewal or termination clauses. Our operating leases typically include variable lease payments, which are primarily comprised of common area maintenance and utility charges for our offices and power and network connections for our data centers, that are determined based on actual consumption. Our operating lease agreements do not contain any residual value guarantees, covenants, or other restrictions.

We also entered into various finance lease arrangements to obtain servers and related equipment for our data center operations. These agreements are primarily for four years and certain of these arrangements have optional renewal or termination clauses. The leases are secured by the underlying leased servers and related equipment.

We sublease certain floors of our Redwood City and London offices. Our current subleases have total lease terms ranging from 11 to 96 months that will expire at various dates by fiscal year 2025.

The components of lease cost, which were included in operating expenses in our consolidated statements of operations, were as follows (in thousands):


	Year End January 31,
	2022			2021
Finance lease cost:
Amortization of finance lease right of-use assets	$	51,907		$	54,630
Interest on finance lease liabilities		3,913			5,753
Operating lease cost, gross		53,052			54,243
Variable lease cost, gross		8,995			9,288
Sublease income		(10,787	)		(10,969	)
Total lease cost (1)	$	107,080		$	112,945

(1)

Short-term lease cost was not material for the periods presented and is not included in the table above.

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


	Year End January 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	58,527	$	59,478
Operating cash flows for finance leases		3,923		6,358
Financing cash flows for finance leases		50,391		60,020
Right-of-use assets obtained in exchange of lease obligations (1)
Operating leases	$	20,296	$	39,267
Finance leases		3,501		31,282

Supplemental information related to the remaining lease term and discount rate was as follows:


	January 31,
	2022			2021
Weighted-average remaining lease term (in years)
Operating leases		5.15			5.77
Finance leases		1.56			2.35

Weighted-average discount rate
Operating leases		5.09	%		5.27	%
Finance leases		4.55	%		4.44	%

As of January 31, 2022, maturities of our operating and finance lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands):


Fiscal years ending January 31:	Operating Leases (1)			Finance Leases
2023	$	54,159		$	43,371
2024		53,728			19,490
2025		36,477			1,574
2026		32,154			—
2027		30,816			—
Thereafter		36,070			—
Total lease payments	$	243,404		$	64,435
Less: imputed interest	$	(30,604	)	$	(2,364	)
Present value of total lease liabilities	$	212,800		$	62,071

(1)

Non-cancellable sublease proceeds for the fiscal years ending January 31, 2023, 2024, and 2025 of $8.2 million, $2.3 million, and $2.1 million, respectively, are not included in the table above.

As of January 31, 2022, we had two operating leases for our office spaces that have not yet commenced. These operating leases have aggregated undiscounted future payments of $43.0 million and lease terms ranging from one to ten years. These operating leases will commence in stages during fiscal year 2023, fiscal year 2024, and fiscal year 2025. We did not reflect these operating leases on the consolidated balance sheet as of January 31, 2022 and the tables above. We did not have any finance leases that have not yet commenced as of January 31, 2022.

We establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs. The present value of our estimated asset retirement obligation for our headquarters facility, which is recorded in other long-term liabilities, was $3.6 million and $3.1 million as of January 31, 2022 and 2021, respectively. The accretion expense, which was included in operating expenses in our consolidated statements of operations, was not material for all periods presented.