Commitment and Contingencies

12 Months Ended

Jan. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Operating Leases

The Company leases its facilities for office space under non-cancelable operating leases with various expiration dates through fiscal 2035. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

In addition, the Company subleases certain of its unoccupied facilities to third parties with various expiration dates through fiscal 2030. Such subleases have all been classified as operating leases.

The components of lease costs and other information related to leases were as follows (in thousands):


	Fiscal Year Ended January 31,
	2023		2022		2021

Operating lease costs	$	46,240	$	35,745	$	33,627
Variable lease costs	7,906		6,029		6,203
Sublease income	(12,782)		(12,722)		(12,779)
Total lease costs	$	41,364	$	29,052	$	27,051

Supplemental cash flow information and non-cash activity related to the Company’s operating leases were as follows (in thousands):


	Fiscal Year Ended January 31,
	2023		2022		2021

Cash payments (receipts) included in the measurement of operating lease liabilities—operating cash flows	$	42,342	$	38,249	$	31,281
Operating lease liabilities arising from obtaining right-of-use assets	$	72,158	$	28,314	$	11,506

Weighted-average remaining lease term and discount rate for the Company’s operating leases were as follows:


	January 31, 2023		January 31, 2022

Weighted-average remaining lease term (years)	8.2		8.0
Weighted-average discount rate	6.5	%	5.9	%

The total remaining lease payments under non-cancelable operating leases and lease receipts for subleases as of January 31, 2023 were as follows (in thousands):


	Operating Leases		Subleases		Total
Fiscal Year Ending January 31,
2024	$	32,033	$	(12,083)	$	19,950
2025	41,201		(7,746)		33,455
2026	38,044		(5,774)		32,270
2027	38,156		(5,960)		32,196
2028	35,727		(6,153)		29,574
Thereafter	151,951		(9,586)		142,365
Total lease payments (receipts)	$	337,112	$	(47,302)	$	289,810
Less: imputed interest	(85,454)
Present value of operating lease liabilities	$	251,658

Other Contractual Commitments

Other contractual commitments relate mainly to third-party cloud infrastructure agreements and subscription arrangements used to facilitate the Company’s operations at the enterprise level.

Future minimum payments under the Company’s non-cancelable purchase commitments with a remaining term in excess of one year as of January 31, 2023 are presented in the table below (in thousands):


	Amount
Fiscal Year Ending January 31,
2024	$	388,539
2025	499,406
2026	931,199		(1)
2027	556,178
2028	651,781
Thereafter	—
Total	$	3,027,103

________________

(1)Includes $416.4 million of remaining non-cancelable contractual commitments as of January 31, 2023 related to one of the Company's third-party cloud infrastructure agreements, under which the Company committed to spend an aggregate of at least $555.0 million, between September 2020 and December 2025 with no minimum purchase commitment during any year. The Company is required to pay the difference if it fails to meet the minimum purchase commitment by December 2025, and such payment can be applied to qualifying expenditures for cloud infrastructure services for up to twelve months after December 2025.

In January 2023, the Company amended one of its third-party cloud infrastructure agreements effective February 1, 2023 (the January 2023 Amendment). Under the amended agreement, the Company has committed to spend an aggregate of at least $2.5 billion from fiscal 2024 to fiscal 2028 on cloud infrastructure services ($350.0 million in fiscal 2024, $450.0 million in fiscal 2025, $500.0 million in fiscal 2026, $550.0 million in fiscal 2027, and $650.0 million in fiscal 2028), which are reflected in the table above. The Company is required to pay the difference if it fails to meet the minimum purchase commitment during any fiscal year, and such payment can be applied to qualifying expenditures for cloud infrastructure services during the term of the amended agreement. The remaining non-cancelable purchase commitments under the agreement prior to the January 2023 Amendment, the aggregate amount of which was $732.0 million as of January 31, 2023, is not reflected in the table above as the Company is no longer required to fulfill such commitments.

401(k) Plan—The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. The Company did not make any matching contributions to the 401(k) plan for each of the fiscal years ended January 31, 2023, 2022, and 2021.

Legal Matters—The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings will have a material adverse effect on its financial position, results of operations, or cash flows.

Letters of Credit—As of January 31, 2023, the Company had a total of $16.8 million in cash collateralized letters of credit outstanding, substantially in favor of certain landlords for the Company’s leased facilities. These letters of credit renew annually and expire at various dates through fiscal 2033.

Indemnification—The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including business partners, investors, contractors, customers, and the Company’s officers, non-employee directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party for claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims due to the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. For each of the fiscal years ended January 31, 2023, 2022, and 2021, losses recorded in the consolidated statements of operations in connection with the indemnification provisions were not material.