Fair Value of Financial Instruments

6 Months Ended

Jul. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 3. Fair Value of Financial Instruments

Fair Value Measurements of Assets and Liabilities Measured at Fair Value on a Recurring Basis

We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We define fair value as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

•Level 1—Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices which are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

•Level 3—Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

Financial assets subject to the fair value disclosure requirements are included in the table below. All of our financial assets are classified as Level 1. The estimated fair value of cash equivalents and short-term investments were as follows (in thousands):

	July 31,		January 31,
	2024		2024
Cash equivalents:
Money market funds	$	84,437	$	189,268
Total cash equivalents		84,437		189,268
Short-term investments:
U.S. treasury securities		75,605		61,484
Non-U.S. government issued securities		—		5,464
Total short-term investments (1)		75,605		66,948
Total cash equivalents and short-term investments (1)	$	160,042	$	256,216

(1) As of January 31, 2024, we had a certificate of deposit for a total of $30.0 million with an original maturity of more than three months and less than twelve months that is classified as a short-term investment in our condensed consolidated balance sheet. This certificate of deposit is not included in the table above as it does not meet the definition of a security.

There were no material differences between the estimated fair value and amortized cost of our cash equivalents and short-term investments.

As of July 31, 2024, remaining contractual maturities of our short-term investments were all within one year and we do not consider any portion of the unrealized losses to be credit losses..

Fair Value Measurements of Other Financial Instruments

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. As of July 31, 2024 and January 31, 2024, we had total debt outstanding relating to the June 2023 Facility with a gross carrying amount of $30.0 million. The estimated fair value of the June 2023 Facility, which we have classified as a Level 2 financial instrument, approximates its carrying value.

In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026 (the "Convertible Notes"). The fair value of the Convertible Notes is determined using observable market prices. The fair value of the Convertible Notes, which we have classified as a Level 2 instrument, was $407.5 million and $392.1 million as of July 31, 2024 and January 31, 2024, respectively.

During the six months ended July 31, 2024, we entered into foreign currency forward contracts to hedge monetary assets and liabilities denominated in non-functional currencies. These foreign currency forward contracts are recorded at fair value and have maturities of 12 months or less. As of July 31, 2024, we had foreign currency forward contracts not designated as hedging instruments with a total notional value of $72.0 million. Our foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. The gross fair value of these foreign currency forward contracts was not material as of July 31, 2024. The gains recognized for these foreign currency forward contracts were not material for the three and six months ended July 31, 2024. As of January 31, 2024, we did not have foreign currency forward contracts.