Business Combinations

3 Months Ended

Apr. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Business Combinations

Business Combinations

Voyage AI Innovations, Inc.

On February 17, 2025 (the “Acquisition Date”), the Company acquired all outstanding shares of Voyage AI Innovations, Inc. (“Voyage AI”), an AI-powered software company that specializes in embedding and reranking models. The Company acquired Voyage AI for its developed technology and talent.

The Company accounted for the transaction as a business acquisition under the acquisition method of accounting.

The acquisition date fair value of the preliminary purchase consideration was $160.9 million, which comprised the following (in thousands):

	Estimated Fair Value
Cash	$	19,464
Common stock(1)	141,402
Total	$	160,866

(1) Approximately 484,169 shares of the Company’s common stock were included in the purchase consideration and the fair values of these shares were determined based on the opening market price of $292.05 per share on February 18, 2025. Because the acquisition closed on a market holiday, the Company elected to use the opening market price on the first trading day subsequent to the acquisition date.

In connection with this business combination, the Company also issued to certain of Voyage AI’s employees a total of 213,023 shares of restricted stock awards and 35,152 shares of restricted stock units in exchange for a portion of their Voyage AI stock. These shares are subject to vesting agreements contingent upon each of these employees’ continued employment with the Company or its affiliates, pursuant to which the shares will vest over the weighted-average requisite service period of 2.7 years. The $62.2 million fair value of these restricted stock awards and $10.3 million fair value of these restricted stock units are accounted for as post-combination stock-based compensation expense over the weighted-average requisite service period.

The following table summarizes the preliminary allocation of purchase consideration to assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition:

	Estimated Fair Value (in thousands)		Estimated Useful Life (in years)
Cash and cash equivalents	$	17,365
Prepaid expenses and other current assets	1,435
Goodwill	119,962
Developed technology intangible asset	24,000		2.0
Accounts payable and accrued expenses	(954)
Deferred tax liabilities, net(1)	(942)
Total purchase price	$	160,866

(1) Deferred tax liabilities, net primarily relate to the intangible asset acquired and the amount presented is net of deferred tax assets.

The fair value of the developed technology was estimated using the reproduction cost method (Level 3), which utilized assumptions for the cost to replace, such as the workforce, timing and resources required, as well as a theoretical profit margin and opportunity cost. The Company determined the economic useful life to be two years based on the expected time period that the asset would contribute to the Company’s future cash flows without significant upgrades. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q. The Company continues to collect information with regards to the estimates and assumptions, including identification of potential liabilities, contingencies, and the allocation of the purchase price. Adjustments to the fair value of the net assets acquired, liabilities assumed and goodwill will be recorded within the measurement period, if necessary.

Goodwill related to the acquisition, which represents the difference between the purchase price and fair values of identifiable net assets, is not tax deductible for U.S. income tax purposes. The Company believes the goodwill balance associated with this business combination is attributable to the assembled workforce as well as synergies expected from expanded market opportunities when integrating the acquired developed technology with the Company’s offerings.

The Company incurred acquisition-related costs for the Voyage AI acquisition of $1.5 million during the three months ended April 30, 2025. These acquisition-related costs were included in general and administrative expenses in the Company’s interim condensed consolidated statements of operations.

From the date of acquisition through April 30, 2025, revenue attributable to Voyage AI, included in the Company’s interim condensed consolidated statements of operations for the three months ended April 30, 2025, was not material.

Grainite, Inc.

On September 27, 2023, the Company acquired the assets of Grainite, Inc. (“Grainite”), for total cash consideration of $15.0 million. Grainite is a stream processing application company and the transaction is intended to accelerate the development of the Company’s stream processing offering. The Company accounted for the transaction as a business combination, after determining that the acquired set of assets, the fair value of which was not concentrated in a single asset, or group of similar assets, and included (a) an assembled workforce and (b) intangible asset, met the definition of a business. As a result, the Company allocated the estimated fair value of $3.1 million of the identifiable asset acquired to the developed technology intangible asset. The fair value assigned to the intangible asset was determined through the use of a third-party valuation firm using replacement cost approach methodology, and includes the expected profit margin of a hypothetical third-party developer and a market participant’s opportunity cost. Judgment was applied for a number of assumptions used in the valuation of the identified intangible asset. The excess of the cash consideration over the identifiable intangible assets in the amount of $11.9 million was allocated to goodwill. This transaction is accounted for as an asset acquisition for tax purposes, and therefore both the goodwill and acquired intangible asset are deductible for tax purposes. Tax impacts were not material. Acquisition-related transaction costs were not material and have been expensed as incurred and included in general and administrative expenses in the condensed consolidated statements of operations. The business combination did not have a material impact on the Company’s consolidated financial statements for the year ended January 31, 2024.