Debt

6 Months Ended

Jul. 31, 2025

Debt Disclosure [Abstract]

Debt

Note 8 – Debt

Term Loan

In June 2022, the Company entered into a credit agreement with a consortium of lenders for a total $195.0 million revolving credit facility (the “Prior Credit Facility”) consisting of a $175.0 million term loan (the “Prior Closing Date Term Loan”) and $20.0 million in committed delayed-draw term loans (the “Prior Delayed Draw Term Loans”) with a maturity date of June 10, 2027. The proceeds of the Prior Delayed Draw Term Loans were to be used to pay accrued interest relating to the Prior Credit Facility. The Company also had the option to request incremental Delayed Draw Term Loan commitments (the “Prior Supplemental Delayed Draw Term Loans” and, together with the Prior Delayed Draw Term Loans and the Prior Closing Date Term Loan, collectively, the “Prior Loans”). The terms of the Prior Supplemental Delayed Draw Term Loans were identical to the Prior Delayed Draw Term Loans. The Company borrowed the full $175.0 million Prior Closing Date Term Loan with a closing date of June 10, 2022 and incurred $4.3 million debt discount and issuance costs.

Under the Prior Credit Facility, interest accrued on the Prior Loans, at the Company’s election made at the time of borrowing, at either the Alternate Base Rate (“ABR”) or Secured Overnight Financing Rate (“SOFR”). The Company also had the option to convert all or a portion of the outstanding principal amount to/from a SOFR-based loan to/from an ABR-based loan after the initial election. ABR loans had an annual interest rate equal to ABR plus 5.5%. ABR is a fluctuating interest rate per annum equal to the highest of: (i) prime rate, (ii) federal funds rate plus 0.5%, or (iii) Term SOFR for one month plus 1.0%. SOFR loans had an annual interest rate equal to Term SOFR plus 6.5%. Term SOFR is a rate per annum equal to the greater of: (i) the floor of 1.0% or (ii) the sum of Term SOFR Reference Rate plus Term SOFR Adjustment applicable to the comparable Interest Period (as defined in the June 2022 credit agreement). The Company had the option to elect an Interest Period of one, three, or six months on the SOFR loans as long as the election did not extend beyond the maturity date of June 10, 2027. The annual interest rate was subject to a 0.5% increase and separately, a 0.5% decrease depending on certain actions by the Company.

Interest on ABR loans was payable quarterly in arrears. Interest on SOFR loans was payable on the last day of each Interest Period, but if the interest period was more than three months, interest was payable on the last day of each three-month interval after the first day of such Interest Period.

In August 2023, the Company executed an amended and restated credit agreement with a consortium of lenders for a total $330.0 million revolving credit facility (the “Amended Credit Facility”) consisting of a $289.5 million term loan (the “Amended Term Loan”) and $40.5 million in committed delayed draw term loan (the “Amended Delayed Draw Term Loan”) with a maturity date of August 17, 2028. The Amended Credit Facility replaced the Prior Credit Facility. Immediately prior to the closing date of the Amended Credit Facility, the Company had an outstanding balance under the Prior Credit Facility of $193.6 million which consisted of $189.5 million of the Prior Loans and $4.1 million of unpaid interest under the Prior Credit Facility. The Company borrowed the full $289.5 million Amended Term Loan and used a portion to replace and refinance the full $189.5 million of the Prior Loans. The Company borrowed $4.1 million under the Amended Delayed Draw Term Loan to fund the unpaid interest under the Prior Credit Facility. The Company incurred $3.5 million debt discount costs in relation to the Amended Credit Facility.

The interest terms under the Amended Credit Facility are identical to the interest terms under the Prior Credit Facility except the ABR loan has an annual interest rate equal to ABR plus 6.0%, the SOFR loan has an annual interest rate equal to Term SOFR plus 7.0%, and the maturity date is August 17, 2028.

Under the Amended Credit Facility, the prepayment starts at 1.5% and reduces to zero beginning on the third anniversary from the closing date. Any amounts drawn and repaid or prepaid under the Amended Credit Facility may not be reborrowed.

The Company will have the option to fund up to 100.0% of cash interest with the proceeds of the Amended Delayed Draw Term Loan, subject to a 0.5% increase in the annual interest rate effective from the date of funding for 90 days, or 180 days if the Interest Period for such Amended Delayed Draw Term Loan is six months from the date of funding.

Under the Amended Credit Facility, the annual interest rate on all outstanding principal amounts will be reduced by 0.5% if the Company’s Annualized Subscription Recurring Revenue (as defined in the amended credit agreement, “ASRR”) is at least $500.0 million and the Company delivers a compliance certificate in accordance with the amended credit agreement.

The amended credit agreement contains certain covenants that require the Company, among other things, to maintain a specified minimum liquidity amount and minimum ASRR amount. Failure to comply with these covenants, along with other non-financial covenants, could result in an event of default, which may lead to acceleration of the amounts owed and/or the enforcement of other remedies by the lenders.

The Company had $6.9 million of debt discount and issuance costs on the $293.6 million Amended Term Loan and Amended Delayed Draw Term Loan as of August 17, 2023. The debt discount and issuance costs were recorded as a direct deduction from the long-term debt liability and are amortized into interest expense over the contractual term of the Amended Credit Facility.

Under the Amended Delayed Draw Term Loan, the Company borrowed zero and $19.2 million during the six months ended July 31, 2025 and 2024, respectively.

In June 2025, the Company repaid in full the outstanding balance of $327.9 million under the Amended Credit Facility, which consisted of $289.5 million under the Amended Term Loan and $38.4 million under the Amended Delayed Draw Term Loan, and terminated the Amended Credit Agreement. In conjunction with the repayment, the Company incurred a loss on early extinguishment of debt of $6.7 million related to the write-off of unamortized debt discount and issuance costs and prepayment premium, which was recorded as a loss on debt extinguishment in the unaudited condensed consolidated statements of operations for the three and six months ended July 31, 2025.

Convertible Notes

In June 2025, the Company completed a private offering to qualified institutional buyers of $1.15 billion aggregate principal amount of 0.00% convertible senior notes due 2030, including the exercise in full of the initial purchasers’ option to purchase up to an additional $150.0 million principal amount of the Convertible Notes. The Company’s net proceeds from the Convertible Notes were approximately $1.13 billion, after deducting the initial purchasers’ discounts and debt issuance costs. The Convertible Notes were issued pursuant to an indenture, dated June 13, 2025 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee. The Convertible Notes are general unsecured obligations of the Company and will mature on June 15, 2030, unless earlier converted, redeemed or repurchased. The Convertible Notes do not bear regular interest, and the principal amount of the Convertible Notes will not accrete. Special interest, if any, is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025 (if and to the extent that special interest is then payable on the Convertible Notes).

The Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding March 15, 2030, only upon satisfaction of certain conditions as described in the Indenture. On or after March 15, 2030, the Convertible Notes are convertible at any time at the election of holders until the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate for the Convertible Notes will initially be 8.0155 shares of Class A common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $124.76 per share of the Company’s Class A common stock. The conversion rate for the Convertible Notes is subject to adjustment under certain circumstances, such as upon the occurrence of a make-whole fundamental change as defined in the Indenture, where the maximum conversion rate will not exceed 11.4220 shares of Class A common stock per $1,000 principal amount of the Convertible Notes, subject to adjustment in the same manner as the conversion rate. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the Indenture.

The Company may redeem for cash all or any portion of the Convertible Notes (subject to the partial redemption limitation set forth in the Indenture), at its option, on or after June 20, 2028, if the last reported sale price of the Class A common stock has been at least 130% of the conversion price for the Convertible Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

If the Company undergoes a fundamental change (as defined in the Indenture), then, subject to certain conditions and except as set forth in the Indenture, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date.

The net carrying amount of the Convertible Notes was as follows (in thousands):

	July 31, 2025
Principal	$	1,150,000
Unamortized debt discount and issuance costs	(21,453)
Net carrying amount	$	1,128,547

For each of the three and six months ended July 31, 2025, amortization of debt discount and issuance costs was $0.6 million. The debt discount and issuance costs are being amortized into interest expense on the unaudited condensed consolidated statements of operations over the term of the Convertible Notes at an effective interest rate of 0.19%.

Capped Calls

In connection with the pricing of the Convertible Notes and the exercise in full by the initial purchasers of their option to purchase additional Convertible Notes, the Company entered into capped call transactions (the "Capped Calls") with certain affiliates of certain initial purchasers of the Convertible Notes and other financial institutions. The Capped Calls each have an initial strike price of approximately $124.76 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Convertible Notes. The Capped Calls associated with the Convertible Notes cover, subject to anti-dilution adjustments, approximately 9.2 million shares of the Company’s Class A common stock. The Capped Calls are generally expected to reduce the potential dilution to the Company’s Class A common stock upon any conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or

offset subject to a cap based on the cap price initially equal to $175.10 per share, subject to certain adjustments. For accounting purposes, the Capped Calls are separate transactions and not part of the terms of the Convertible Notes, and are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $88.6 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital and will not be remeasured as long as they continue to meet the condition for equity classification.

The Convertible Notes and the Capped Calls have been integrated for tax purposes. The impact of this tax treatment results in the Capped Calls being deductible with the cost of the Capped Calls qualifying as original issue discount for tax purposes over the term of the Convertible Notes.

As of July 31, 2025, the Company was in compliance with all of its debt covenants.