Commitments and Contingencies

12 Months Ended

Jan. 31, 2023

Commitments and Contingencies Disclosure [Abstract]


11			Commitments and Contingencies

Letters of Credit

We had a total of $4.3 million and $5.3 million in letters of credit outstanding in favor of certain landlords for office space and for credit line facilities as of January 31, 2023 and 2022, respectively. These letters of credit renew annually and expire on various dates through fiscal year 2025.

Indemnification

In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, vendors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.

These indemnification provisions may survive termination of the underlying agreement and the potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments we could be required to make under these indemnification provisions is indeterminable. As of January 31, 2023 and 2022, we have not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements was remote.

Workforce Restructuring

On June 24, 2022, our board of directors approved restructuring actions to manage our operating expenses by reducing our global workforce by approximately 5%. The workforce reduction aimed to simplify our go-to-market approach and improve sales productivity. In connection with these workforce reductions, we also ceased use of our office in Brooklyn, NY. On November 10, 2022, our board of directors approved further restructuring actions to reduce our global workforce across functions by an additional 6%. We substantially completed these actions and recognized related restructuring costs, consisting predominantly of employee termination benefits and contractual changes, during fiscal year 2023, with any remaining activities expected to be completed by the second quarter of fiscal year 2024. We incurred $23.4 million of expense related to our restructuring actions for fiscal year 2023, of which $22.3 million relates to employee termination benefits and the remainder relates to lease abandonment costs.

The following table shows the total amount incurred during fiscal year 2023 and the liability, which is recorded in accrued compensation and employee benefits in the consolidated balance sheets, for restructuring-related costs as of January 31, 2023 (in thousands):


Accrued restructuring costs as of January 31, 2022	$	—
Restructuring costs incurred during fiscal year 2023	23,446
Amount paid during fiscal year 2023	(19,339)
Write-off of assets associated with Brooklyn office	(218)
Accrued restructuring costs as of January 31, 2023	$	3,889

The following table shows the restructuring charges incurred during fiscal year 2023 (in thousands):


	Employee Termination Benefits		Lease Exit Costs		Total Restructuring Costs
Cost of subscription services revenue	$	76	$	106	$	182
Cost of professional services and other revenue	585		125		710
Sales and marketing	18,965		526		19,491
Research and development	448		46		494
General and administrative	2,192		377		2,569
Total	$	22,266	$	1,180	$	23,446

Defined Contribution Plans

We sponsor retirement plans for qualifying employees, including a 401(k) plan in the U.S. and defined contribution plans in certain other countries, to which we make matching contributions. Our total matching contributions to all defined contribution plans during fiscal years 2023, 2022, and 2021 were $14.5 million, $10.4 million and $5.1 million, respectively.

Litigation

From time to time, we may be involved in lawsuits, claims, investigations, and proceedings, consisting of intellectual property, commercial, employment, and other matters, which arise in the ordinary course of business. In accordance with ASC 450, Contingencies, we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or

financial condition. We have determined that the existence of a material loss is neither probable nor reasonably possible.

Warranty

We warrant to customers that our platform will operate substantially in accordance with its specifications. Historically, no significant costs have been incurred related to product warranties. Based on such historical experience, the probability of incurring such costs in the future is deemed remote. As such, no accruals for product warranty costs have been made.

Non-Cancelable Purchase Obligations

In the normal course of business, we enter into non-cancelable purchase commitments with various parties, mainly for hosting services and software products and services. During fiscal year 2023, we made commitments to purchase $138.1 million of cloud infrastructure services from a third-party vendor and $82.5 million of service credits toward products and services from strategic alliance partners, which together constitute the majority of the increase in our non-cancelable purchase commitments during the fiscal year.

As of January 31, 2023, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer as follows (in thousands):


Year Ended January 31,	Amount
2024	$	66,846
2025	88,931
2026	46,746
2027	12,131
2028	—
Thereafter	—
Total	$	214,654