Leases

12 Months Ended

Apr. 30, 2023

The Company leases its facilities for office space under non-cancellable operating leases with various expiration dates through the fiscal year ending April 30, 2033. Certain lease agreements include options to renew or terminate the applicable lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

On August 25, 2021, the Company entered into a new lease to acquire approximately 283,015 square feet of office space in several phases in Redwood City, California. Total undiscounted base rent payments over the term of this lease are approximately $103.1 million. In addition to base rent, the Company will be responsible for the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the leased space. Under the terms of the lease agreement, the Company has a rent abatement with respect to each phase for the initial six months following the rent commencement date for such phase, with initial monthly base rent payments expected to commence April 1, 2023, which will be approximately $0.5 million at commencement and will increase up to a maximum monthly base rent of approximately $1.0 million. The lease agreement also includes an aggregate tenant improvement allowance of $44.2 million for certain costs. The term of the lease is 126 months from the date that rent commences with respect to phase one of the leased space, which will be nine months after the date when phase one of the leased space is delivered to the Company. Pursuant to the lease agreement, the Company provided the landlord an unconditional and irrevocable letter of credit of $12.6 million, which is subject to reduction pursuant to the terms of the lease agreement. The lease commencement date of the first two phases was determined to have occurred in the quarter ended January 31, 2022, when the landlord delivered the applicable leased space to the Company. The lease commencement date of the third phase was determined to have occurred in the quarter ended October 31, 2022, when the landlord delivered the leased space to the Company. The lease commencement date of the fourth phase was determined to have occurred in the quarter ended April 30, 2023, when the landlord delivered the leased space to the Company. The lease commencement date of other phases will be determined when the landlord delivers the applicable leased space to the Company.

The components of total lease costs, including variable lease costs, for the fiscal years ended April 30, 2023 and 2022 were as follows (in thousands):


	Fiscal Year Ended April 30,
Lease Costs	2023		2022
Operating lease costs	$	8,359	$	5,587
Short term lease costs	1,624		1,538
Variable lease costs	3,494		1,892
Sublease income	(26)		—
Total lease costs, net	$	13,451	$	9,017

On February 21, 2023, the Company entered into a sublease agreement with First Virtual Group, Inc. (the “Subtenant”), whereby the Company agreed to sublease to the Subtenant approximately 3,130 square feet of space located in Redwood City, California. Refer to Note 13. Related Party Transactions for more information.

Variable lease costs are primarily related to payments made to the Company’s landlords for common area maintenance, property taxes, insurance, and other operating expenses. Short-term lease costs primarily represent payments related to marketing arrangements that contain embedded short-term leases of billboards. Supplemental cash flow information and non-cash activity related to leases was as follows (in thousands):


	Fiscal Year Ended April 30,
	2023		2022		2021

Cash payments included in the measurement of operating lease liabilities – operating cash flows	$	5,250	$	4,667	$	4,031

Right-of-use assets obtained in exchange for lease obligations (including remeasurement of right-of-use assets and lease liabilities due to changes in the timing of receipt of lease incentives)	$	(5,589)	$	26,529	$	—
Right-of-use assets obtained in exchange for lease obligations arising from lease modifications	$	3,093	$	1,572	$	—

The following table presents the lease balances within the consolidated balance sheets, weighted-average remaining lease term, and weighted-average discount rates related to the Company’s operating leases (in thousands):


		As of April 30,
Operating leases		2023		2022
Right-of-use assets	Other assets, non-current	$	17,572	$	29,010
Lease liabilities, current	Other current liabilities	2,339		3,613
Lease liabilities, non-current	Other long-term liabilities	37,320		26,851
Total operating lease liabilities		$	39,659	$	30,464


	As of April 30,
Operating leases	2023		2022
Weighted average remaining lease term (in years)	9.9		9.7
Weighted average discount rate	8.1	%	3.5	%

Future minimum payments under lease obligations as of April 30, 2023 were as follows (in thousands):


	As of April 30, 2023
Fiscal 2024	$	6,136
Fiscal 2025	7,458
Fiscal 2026	7,744
Fiscal 2027	7,983
Fiscal 2028	8,229
Fiscal 2029 and thereafter	44,137
Total future minimum lease payments	81,687
Less: Tenant improvement allowance	(15,932)
Less: Imputed interest	(26,096)
Total operating lease liabilities	$	39,659