Commitments and Contingencies

3 Months Ended

Apr. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Revolving Line of Credit

As of April 30, 2020 and January 31, 2020, the Company maintained a revolving line of credit that matures in September 2020 and provides for aggregate borrowings of up to $50.0 million. Prior to the maturity date, the Company has the option to borrow an aggregate amount not to exceed $15.0 million and convert the borrowing to a term loan (Term-Out Loan), provided that no prior event of default has occurred. The existing aggregate borrowing amount on the revolving line of credit is reduced by the amount of the Term-Out Loan. Principal payments on the Term-Out Loan are repaid in consecutive monthly installments. The maturity date is the earlier of (i) 48 months after such Term-Out Loan was made and (ii) September 2023. The applicable interest rate for borrowings under the revolving line of credit and the Term-Out Loan are determined as follows: for borrowings less than $5.0 million, the interest rate is based on the Wall Street Journal's Prime Rate plus a 0.5% margin. For borrowings greater than or equal to $5.0 million, but less than $10.0 million, the interest rate is based on the Wall Street Journal's Prime Rate. For borrowings greater or equal to $10.0 million, the interest rate is based on the Wall Street Journal's Prime Rate minus a 0.5% applicable margin.

Standby letters of credit related to the Company's office lease facilities of $4.4 million and $3.5 million were outstanding as of April 30, 2020 and January 31, 2020, respectively, and such amounts reduce aggregate borrowings available under the revolving line of credit. As of January 31, 2020, $46.5 million was available for borrowing under the revolving line of credit. During the three months ended April 30, 2020, the Company drew down $43.0 million from its revolving line of credit as a precautionary measure to provide liquidity in light of the global economic uncertainty caused by the COVID-19 pandemic and the remaining balance of $2.6 million was available for borrowing under the revolving line of credit.

As of April 30, 2020, the Company was in compliance with the financial covenants contained in the revolving line of credit. The revolving line of credit requires the Company to achieve a minimum level of quarterly subscription revenue and liquidity as defined in the credit agreement.

Operating Leases

The Company leases certain office and data center facilities under operating leases that expire in fiscal 2020 to 2028. Certain of our leases include options to renew with terms of up to five years. In February, 2020, the Company executed a lease agreement to expand its San Francisco headquarters and entered into a new lease agreement in San Mateo. The new San Francisco lease agreement includes an expansion of the lease space and an extension of the lease term of its existing lease space and spans to September 2028 for a total commitment of approximately $11.8 million. The new San Mateo office lease spans to September 2025 for a total gross commitment of approximately $13.8 million.

Rent expense during the three months ended April 30, 2020 and 2019 was $5.0 million and $3.4 million, respectively.

Future minimum lease payments by fiscal year for our operating leases are as follows (in thousands):


	April 30, 2020
	Operating Leases
Remainder of 2021	$	9,373
2022	14,729
2023	11,702
2024	10,517
2025	9,479
Thereafter	19,937
Total minimum payments	$	75,737

Warranties, Indemnification, and Contingent Obligations

The Company's arrangements generally include provisions indemnifying customers against liabilities if their customer data is compromised due to a breach of information security, or if the Company's applications or services infringe a third-party's intellectual property rights. To date, the Company has not incurred any costs as a result of such indemnification and has not accrued any liabilities related to such obligations in the unaudited condensed consolidated financial statements.

The Company enters into service level agreements with customers which warrant defined levels of uptime and support response times and permit those customers to receive credits for prepaid amounts in the event that those performance and response levels are not met. To date, the Company has not experienced any significant failures to meet defined levels of performance and response. In connection with the service level agreements, the Company has not incurred any significant costs and has not accrued any liabilities in the unaudited condensed consolidated financial statements. The Company's subscription services agreements also generally include a warranty that the service performs in accordance with the applicable specifications document. The Company's professional services are generally warranted to be performed in a professional manner and in a manner that will comply with the terms of the customer agreements. To date, the Company has not incurred any material costs associated with these warranties.