0001643269-21-000041 | 10-Q | XBRL Viewer

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Cover - shares	9 Months Ended
Cover - shares	Oct. 31, 2021	Nov. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 31, 2021
Document Transition Report	false
Entity File Number	001-39502
Entity Registrant Name	Sumo Logic, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-2234444
Entity Address, Address Line One	305 Main Street
Entity Address, City or Town	Redwood City
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94063
City Area Code	650
Local Phone Number	810-8700
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	SUMO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		112,003,989
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001643269
Current Fiscal Year End Date	--01-31

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 31, 2021	Jan. 31, 2021
Current assets:
Cash and cash equivalents	$ 78,288	$ 404,140
Marketable securities, current	210,633	0
Accounts receivable, net	43,404	44,761
Prepaid expenses	10,639	10,509
Deferred sales commissions, current	15,810	12,790
Other current assets	2,647	3,110
Total current assets	361,421	475,310
Marketable securities, noncurrent	73,153	0
Property and equipment, net	4,864	4,156
Operating lease right-of-use assets	7,162
Goodwill	95,815	50,672
Acquired intangible assets, net	30,421	10,656
Deferred sales commissions, noncurrent	29,736	27,857
Other assets	1,507	1,856
Total assets	604,079	570,507
Current liabilities:
Accounts payable	9,338	4,832
Accrued expenses and other current liabilities	25,839	23,316
Operating lease liabilities, current	4,612
Deferred revenue, current	118,668	102,625
Total current liabilities	158,457	130,773
Operating lease liabilities, noncurrent	3,514
Deferred revenue, noncurrent	5,594	4,076
Other liabilities	4,789	4,246
Total liabilities	172,354	139,095
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock	11	10
Additional paid-in-capital	921,710	829,238
Accumulated other comprehensive loss	(2,406)	(45)
Accumulated deficit	(487,590)	(397,791)
Total stockholders’ equity	431,725	431,412
Total liabilities and stockholders’ equity	$ 604,079	$ 570,507

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Oct. 31, 2021	Oct. 31, 2020
Income Statement [Abstract]
Revenue	$ 62,016	$ 51,868	$ 175,076	$ 148,485
Cost of revenue	20,384	13,601	55,557	42,140
Gross profit	41,632	38,267	119,519	106,345
Operating expenses:
Research and development	25,464	18,753	69,768	51,756
Sales and marketing	33,565	26,904	95,300	80,534
General and administrative	14,015	15,507	45,258	32,096
Total operating expenses	73,044	61,164	210,326	164,386
Loss from operations	(31,412)	(22,897)	(90,807)	(58,041)
Interest and other (expense) income, net	(19)	(322)	34	(249)
Interest expense	(44)	(290)	(133)	(654)
Loss before provision for income taxes	(31,475)	(23,509)	(90,906)	(58,944)
Provision (benefit) for income taxes	(639)	417	(1,107)	764
Net loss	$ (30,836)	$ (23,926)	$ (89,799)	$ (59,708)
Net loss per share, basic (in USD per share)	$ (0.28)	$ (0.43)	$ (0.84)	$ (1.92)
Net loss per share, diluted (in USD per share)	$ (0.28)	$ (0.43)	$ (0.84)	$ (1.92)
Weighted-average number of shares outstanding, basic (in shares)	110,409	55,816	107,479	31,044
Weighted-average number of shares outstanding, diluted (in shares)	110,409	55,816	107,479	31,044

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Oct. 31, 2021	Oct. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (30,836)	$ (23,926)	$ (89,799)	$ (59,708)
Other comprehensive income (loss):
Foreign currency translation adjustments	(2,077)	(51)	(2,154)	(33)
Unrealized gain on available-for-sale marketable securities	(218)	0	(207)	0
Total comprehensive loss	$ (33,131)	$ (23,977)	$ (92,160)	$ (59,741)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Common Stock RSUs	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance at Jan. 31, 2020	$ (220,574)	$ 2		$ 97,131	$ (213)	$ (317,494)
Beginning balance (in shares) at Jan. 31, 2020		18,984,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs	342,685	$ 2		342,683
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs (in shares)		17,020,000
Conversion of convertible redeemable preferred stock to common stock upon initial public offering	340,167	$ 6		340,161
Conversion of convertible redeemable preferred stock to common stock upon initial public offering (in shares)		63,762,000
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering	512			512
Issuance of common stock upon exercise of stock options	6,113			6,113
Issuance of common stock upon exercise of stock options (in shares)		2,222,000
Vesting of early exercised stock options	148			148
Common stock issued in connection with acquisitions (in shares)		256,000
Stock-based compensation	28,987			28,987
Foreign currency translation adjustments	(33)				(33)
Net loss	(59,708)					(59,708)
Ending balance at Oct. 31, 2020	438,297	$ 10		815,735	(246)	(377,202)
Ending balance (in shares) at Oct. 31, 2020		102,244,000
Beginning balance at Jan. 31, 2020	$ 340,167
Beginning balance (in shares) at Jan. 31, 2020	63,762,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of convertible redeemable preferred stock to common stock upon initial public offering	$ (340,167)
Conversion of convertible redeemable preferred stock to common stock upon initial public offering (in shares)	(63,762,000)
Ending balance (in shares) at Oct. 31, 2020	0
Ending balance at Oct. 31, 2020	$ 0
Beginning balance at Jul. 31, 2020	(244,208)	$ 2		109,261	(195)	(353,276)
Beginning balance (in shares) at Jul. 31, 2020		20,128,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs	342,685	$ 2		342,683
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs (in shares)		17,020,000
Conversion of convertible redeemable preferred stock to common stock upon initial public offering	340,167	$ 6		340,161
Conversion of convertible redeemable preferred stock to common stock upon initial public offering (in shares)		63,762,000
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering	512			512
Issuance of common stock upon exercise of stock options	3,992			3,992
Issuance of common stock upon exercise of stock options (in shares)		1,301,000
Vesting of early exercised stock options	49			49
Common stock issued in connection with acquisitions (in shares)		33,000
Stock-based compensation	19,077			19,077
Foreign currency translation adjustments	(51)				(51)
Net loss	(23,926)					(23,926)
Ending balance at Oct. 31, 2020	438,297	$ 10		815,735	(246)	(377,202)
Ending balance (in shares) at Oct. 31, 2020		102,244,000
Beginning balance at Jul. 31, 2020	$ 340,167
Beginning balance (in shares) at Jul. 31, 2020	63,762,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of convertible redeemable preferred stock to common stock upon initial public offering	$ (340,167)
Conversion of convertible redeemable preferred stock to common stock upon initial public offering (in shares)	(63,762,000)
Ending balance (in shares) at Oct. 31, 2020	0
Ending balance at Oct. 31, 2020	$ 0
Beginning balance at Jan. 31, 2021	431,412	$ 10		829,238	(45)	(397,791)
Beginning balance (in shares) at Jan. 31, 2021		102,484,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options	17,975	$ 1		17,974
Issuance of common stock upon exercise of stock options (in shares)		5,824,000
Exercise of common stock warrants (in shares)		18,000
Vesting of restricted stock units (in shares)			1,567,000
Vesting of early exercised stock options	147			147
Issuance of common stock in connection with employee stock purchase plan (in shares)		280,000
Issuance of common stock in connection with employee stock purchase plan	4,725			4,725
Common stock issued in connection with acquisitions (in shares)		1,674,000
Common stock issued in connection with acquisitions	30,499			30,499
Stock-based compensation	39,127			39,127
Other comprehensive income (loss)	(2,361)				(2,361)
Foreign currency translation adjustments	(2,154)
Net loss	(89,799)					(89,799)
Ending balance at Oct. 31, 2021	431,725	$ 11		921,710	(2,406)	(487,590)
Ending balance (in shares) at Oct. 31, 2021		111,847,000
Beginning balance at Jan. 31, 2021	$ 0
Beginning balance (in shares) at Jan. 31, 2021	0
Ending balance (in shares) at Oct. 31, 2021	0
Ending balance at Oct. 31, 2021	$ 0
Beginning balance at Jul. 31, 2021	447,222	$ 11		904,076	(111)	(456,754)
Beginning balance (in shares) at Jul. 31, 2021		110,133,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options	4,648			4,648
Issuance of common stock upon exercise of stock options (in shares)		1,344,000
Vesting of restricted stock units (in shares)			370,000
Vesting of early exercised stock options	49			49
Stock-based compensation	12,937			12,937
Other comprehensive income (loss)	(2,295)				(2,295)
Foreign currency translation adjustments	(2,077)
Net loss	(30,836)					(30,836)
Ending balance at Oct. 31, 2021	431,725	$ 11		$ 921,710	$ (2,406)	$ (487,590)
Ending balance (in shares) at Oct. 31, 2021		111,847,000
Beginning balance at Jul. 31, 2021	$ 0
Beginning balance (in shares) at Jul. 31, 2021	0
Ending balance (in shares) at Oct. 31, 2021	0
Ending balance at Oct. 31, 2021	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Cash flows from operating activities
Net loss	$ (89,799,000)	$ (59,708,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,889,000	6,152,000
Amortization of deferred sales commissions	11,353,000	8,148,000
Accretion (amortization) of marketable securities purchased at a premium (discount)	2,156,000	0
Stock-based compensation, net of amounts capitalized	39,127,000	28,666,000
Non-cash operating lease cost	3,132,000	0
Other	(1,852,000)	186,000
Changes in operating assets and liabilities
Accounts receivable	1,910,000	(14,717,000)
Prepaid expenses	(133,000)	(2,276,000)
Other assets	1,104,000	(619,000)
Deferred sales commissions	(16,252,000)	(17,718,000)
Accounts payable	4,283,000	(149,000)
Accrued expenses and other current liabilities	1,806,000	1,781,000
Deferred revenue	16,436,000	1,695,000
Operating lease liabilities	(3,371,000)	0
Other noncurrent liabilities	265,000	2,354,000
Net cash used in operating activities	(19,946,000)	(46,205,000)
Cash flows from investing activities
Purchases of marketable securities	(359,587,000)	0
Maturities of marketable securities	57,958,000	0
Sales of marketable securities	15,480,000	0
Purchases of property and equipment	(1,799,000)	(358,000)
Capitalized internal-use software costs	0	(1,205,000)
Cash paid for acquisitions, net of cash and restricted cash acquired	(40,340,000)	0
Net cash used in investing activities	(328,288,000)	(1,563,000)
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts	0	349,166,000
Proceeds from borrowings	0	24,250,000
Repayment of borrowings	0	(24,250,000)
Payments of deferred offering costs	(93,000)	(1,321,000)
Proceeds from employee stock purchase plan	4,725,000	0
Proceeds from exercise of common stock options	17,974,000	6,113,000
Cash paid for holdback consideration in connection with acquisitions	0	(100,000)
Net cash provided by financing activities	22,606,000	353,858,000
Effect of exchange rate changes on cash and cash equivalents	(174,000)	(134,000)
Change in cash and cash equivalents and restricted cash	(325,802,000)	305,956,000
Beginning of period	404,440,000	101,813,000
End of period	78,638,000	407,769,000
Supplemental disclosures of cash flow information
Cash paid for income taxes	831,000	846,000
Cash paid for interest	63,000	706,000
Supplemental non-cash investing and financing information
Conversion of redeemable convertible preferred stock to common stock	0	340,161,000
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital	0	512,000
Vesting of early exercised options	148,000	148,000
Common stock and assumed awards issued as consideration for acquisitions	30,499,000	0
Unpaid cash consideration for acquisitions	456,000	0
Stock-based compensation capitalized as internal-use software costs	0	321,000
Deferred offering costs accrued but not yet paid	0	3,140,000
Property and equipment accrued but not yet paid	40,000	130,000
Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheets
Cash and cash equivalents	78,288,000	407,469,000
Restricted cash included in other current assets	350,000	300,000
Total cash, cash equivalents, and restricted cash	$ 78,638,000	$ 407,769,000

Description of Business and Basis of Presentation	9 Months Ended
Description of Business and Basis of Presentation	Oct. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation Organization and Nature of Operations Sumo Logic, Inc. (the “Company”) was incorporated in Delaware in March 2010. The Company provides, on a cloud-native software-as-a-service (“SaaS”) delivery model, a software platform that enables organizations of all sizes to address the challenges and opportunities presented by digital transformation, modern applications, and cloud computing. The platform enables organizations to automate the collection, ingestion, and analysis of application, infrastructure, security, and IoT data to derive actionable insights. Basis of Presentation and Principles of Consolidation The Company’s condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of January 31, 2021, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by GAAP for complete consolidated financial statements. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021, as filed with the SEC on March 12, 2021. The Company’s condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments that are necessary for the fair statement of the Company’s condensed consolidated financial information. The results of operations for the three and nine months ended October 31, 2021 are not necessarily indicative of the results to be expected for the year ending January 31, 2022 or for any other interim period or for any other future year. Fiscal Year The Company’s fiscal year ends on January 31. Unless otherwise stated, references to year in these condensed consolidated financial statements relate to the above described fiscal year rather than calendar year.

Summary of Significant Accounting Policies

9 Months Ended

Oct. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of Estimates and Judgments

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements and may involve subjective or significant judgment by the Company; therefore, actual results could differ from the Company’s estimates. The Company’s accounting policies that involve judgment include revenue recognition, period of benefit for deferred sales commissions, assumptions used for estimating the fair value of common stock to calculate stock-based compensation (prior to the closing of the Company’s initial public offering (“IPO”)), capitalization of internal-use software costs, valuation of goodwill and intangible assets, estimate of credit losses for accounts receivable and marketable securities, and valuation allowances associated with income taxes.

COVID-19

While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the duration and spread of the outbreak, the emergence of variants of the virus, the extent and effectiveness of containment actions, and the effectiveness of vaccination efforts, it has already had an adverse effect on the global economy and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown. The Company may experience customer losses,

including due to bankruptcy or customers ceasing operations, which may result in delays in collections or an inability to collect accounts receivable from these customers. The extent to which the COVID-19 pandemic, including the emergence of variants of the virus, may continue to impact the Company’s financial condition, results of operations, or liquidity continues to remain uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, which will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.

In May 2020, as part of the Company’s efforts to respond to the COVID-19 pandemic and ensure longer-term financial stability, the Company initiated cost reduction measures, including a headcount reduction. The headcount reduction resulted in $1.2 million of severance and benefits expense and $0.1 million in stock-based compensation expense for the year ended January 31, 2021.

Significant Accounting Policies

Other than those described below, there have been no changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021, that have had a material impact on its condensed consolidated financial statements and related notes.

Marketable Securities

Marketable securities consist of U.S. Treasury securities, corporate debt securities, commercial paper, foreign government obligations, supranational securities, and certificates of deposits. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. Interest receivable on these securities is presented in other current assets on the condensed consolidated balance sheets. All marketable securities are recorded at their estimated fair values. When the fair value of a marketable security declines below its amortized cost basis, the carrying value of the security will be reduced to its fair value if it is more likely than not that management is required to sell the impaired security before recovery of its amortized basis, or management has the intention to sell the security. If neither of these conditions are met, the Company determines whether any portion of the decline is due to credit losses. Any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Company’s condensed consolidated statement of operations. When the fair value of the security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss) and are recognized in the Company’s condensed consolidated statement of operations only if the Company sells or intends to sell the security before recovery of its cost basis. Realized gains and losses are determined based on the specific identification method and are reported in interest and other (expense) income, net in the Company’s condensed consolidated statements of operations.

Leases

The Company enters into operating lease arrangements for real estate assets related to office space. The Company determines if an arrangement is or contains a lease at commencement by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date, which is the date the leased assets are made available for use. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, noncurrent in the condensed consolidated balance sheets. The Company did not have any financing leases in any of the periods presented.

Operating lease right-of-use assets (“RoU”) and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist of the fixed payments under the arrangement, less any lease incentives, such as tenant improvement allowances. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-to-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The interest rate implicit in our operating leases is not readily determinable, and therefore an incremental borrowing rate (“IBR”) is estimated to determine the present value of future payments. The estimated IBR factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. Lease expenses are recognized on a straight-line basis over the lease term.

The Company generally uses the non-cancelable lease term when recognizing the right-of-use assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised. The Company accounts for lease components and non-lease components as a single lease component.

Leases with a term of 12 months or less are not recognized on the condensed consolidated balance sheets but are recognized as expense on a straight-line basis over the term of the lease.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Land is not depreciated. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization are removed from the Company’s consolidated balance sheet and the resulting gain or loss is reflected in the Company’s consolidated statement of operations.

The following table presents the estimated useful lives of the Company’s property and equipment:


			Useful Life
Computer and hardware equipment			3 years
Furniture and fixtures			5 years
Leasehold improvements			Shorter of lease term or estimated useful life
Capitalized internal-use software			3 years
Building			10 - 22 years

Related Party Transactions

Certain members of the Company’s board of directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. The Company received cash payments of $1.5 million from a related party for the year ended January 31, 2021. Related party transactions were not material as of October 31, 2021, or for the nine months ended October 31, 2021 or 2020.

Recently Adopted Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”) on its condensed consolidated financial statements. The sections below describe impacts from newly adopted pronouncements.

In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842). This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about lease arrangements. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which amended the effective date of the new guidance. The Company adopted this guidance using a modified retrospective approach as of February 1, 2021. The Company has elected to use the optional transition method which allows the Company to apply the guidance of ASC 840, including disclosure requirements, in the comparative periods presented. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification related to agreements entered prior to adoption.

The adoption of the new standard resulted in recognition of operating lease RoU assets and operating lease liabilities of $10.3 million and $11.5 million, respectively, as of February 1, 2021. There was no cumulative impact of transition to the Company’s accumulated deficit balance as of the adoption date.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued various amendments including ASU No. 2018-19, ASU No. 2019-04, and ASU No. 2019-05. The guidance and related amendments modify the accounting for credit losses for most financial assets and require the use of an expected loss model, replacing the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The Company adopted this guidance as of February 1, 2021, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting PronouncementsUnder the JOBS Act, the Company meets the definition of an emerging growth company and can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period.

Fair Value Measurements

9 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:

Level 1 Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the short maturity of those instruments.

The following tables present the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis, based on the three-tier fair value hierarchy (in thousands):


	As of October 31, 2021
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	69,155	$	—	$	—	$	69,155
Corporate debt securities	—		644		—		644
Marketable securities:
U.S. Treasury securities	—		78,340		—		78,340
Corporate debt securities	—		134,888		—		134,888
Commercial paper	—		29,272		—		29,272
Foreign government obligations	—		6,211		—		6,211
Supranational securities	—		30,455		—		30,455
Certificates of deposit	—		4,620		—		4,620
Total financial assets	$	69,155	$	284,430	$	—	$	353,585


	As of January 31, 2021
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	397,200	$	—	$	—	$	397,200

The Company had $0.4 million and $0.3 million of restricted cash invested in money market funds that is not included in the tables above as of October 31, 2021 and January 31, 2021, respectively.

In connection with the Loan and Security agreement, discussed in Note 7, the Company issued 32,276 warrants to purchase shares of the Company’s redeemable convertible preferred stock. The Company used a Black-Scholes option valuation model to value its redeemable convertible preferred stock warrant liability at inception and on subsequent valuation dates. Changes in the fair values

of the redeemable convertible preferred stock warrant liability were recorded as interest and other (expense) income, net in the Company’s condensed consolidated statements of operations. All 32,276 warrants to purchase shares of redeemable convertible preferred stock converted into warrants to purchase common stock upon the closing of the Company’s IPO and the related liability was reclassified to additional-paid in capital in the Company’s condensed consolidated balance sheet. During the nine months ended October 31, 2021, 21,746 warrants were exercised. There were no transfers out of level 3 during the nine months ended October 31, 2021 and 2020.

The following is a summary of available-for sale marketable securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet as of October 31, 2021 (in thousands):


	As of October 31, 2021
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U.S. Treasury securities	$	78,401	$	1	$	(62)	$	78,340
Corporate debt securities	135,019		4		(135)		134,888
Commercial paper	29,276		—		(4)		29,272
Foreign government obligations	6,221		—		(10)		6,211
Supranational securities	30,454		3		(2)		30,455
Certificates of deposit	4,622		—		(2)		4,620
Total marketable securities	$	283,993	$	8	$	(215)	$	283,786

The Company does not believe that any unrealized losses are attributable to credit-related factors based on its evaluation of available evidence. To determine whether a decline in value is related to credit loss, the Company evaluates, among other factors: the extent to which the fair value is less than the amortized cost basis, changes to the rating of the security by a rating agency and any adverse conditions specifically related to an issuer of a security or its industry. No impairment loss has been recorded on the securities included in the table above, as the Company believes that the decrease in fair value of these securities is temporary.

The following table presents the contractual maturities of the Company’s marketable securities (in thousands):


	October 31, 2021
Due in one year or less	$	210,633
Due after one year and within five years	73,153
Total marketable securities	$	283,786

The Company had no marketable securities as of January 31, 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

9 Months Ended

Oct. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net, consisted of the following (in thousands):


	October 31, 2021		January 31, 2021
Computer and hardware equipment	$	3,147	$	2,206
Furniture and fixtures	2,003		1,773
Leasehold improvements	2,990		2,416
Capitalized internal-use software	3,386		3,386
Building	322		—
Land	90		—
Gross property and equipment(a)	11,938		9,781
Accumulated depreciation and amortization	(7,074)		(5,625)
Property and equipment, net	$	4,864	$	4,156

______________

(a)Gross property and equipment includes construction-in-progress of $0.1 million and $0.6 million that had not yet been placed in service as of October 31, 2021 and January 31, 2021, respectively. The costs associated with construction-in-progress are not amortized until placed in service.

Depreciation and amortization expense of property and equipment was $0.5 million and $0.4 million for the three months ended October 31, 2021 and 2020, respectively, and $1.5 million and $1.0 million for the nine months ended October 31, 2021 and 2020, respectively.

The following table presents the Company’s long-lived assets by geographic region for the periods indicated (in thousands):


	October 31, 2021		January 31, 2021
United States	$	3,933	$	3,381
International	931		775
Total long-lived assets	$	4,864	$	4,156

The Company did not capitalize any internal-use software costs for the nine months ended October 31, 2021. The Company capitalized $0.4 million and $1.5 million of internal-use software costs during the three and nine months ended October 31, 2020, respectively. Amortization of internal-use software costs was $0.1 million and $0.2 million during the three months ended October 31, 2021 and 2020, respectively and $0.6 million and $0.5 million during the nine months ended October 31, 2021 and 2020, respectively. There were no impairments of capitalized internal-use software costs during the nine months ended October 31, 2021 or 2020.

Fully amortized capitalized internal-use software was written off in the amount of $8.0 million during the nine months ended October 31, 2020.

Acquisitions, Intangible Assets and Goodwill

9 Months Ended

Oct. 31, 2021

Business Combinations [Abstract]

Acquisitions, Intangible Assets and Goodwill

Sensu, Inc.

On June 10, 2021, the Company completed the acquisition of Sensu, Inc. (“Sensu”) a privately-held software company that is a leader in open source monitoring. The addition of Sensu is expected to accelerate the Company's observability strategy by providing customers with an affordable and scalable end-to-end solution for infrastructure and application monitoring.

The aggregate amount recorded as purchase consideration was $32.7 million, of which $8.6 million was paid or to be paid in cash, and $24.1 million was comprised of 1,123,697 shares of the Company’s common stock. The value of consideration assigned to such shares of common stock was based on the closing price of the Company’s common stock on the date of acquisition, or $21.49 per share.

Additionally, 71,644 shares of common stock were issued with a fair value of $21.49 per share at the time of grant and will be recorded as stock-based compensation. These shares are subject to risk of forfeiture which lapses in full 1.5 years after the acquisition date. The Company recorded stock-based compensation expense related to the vesting of the restricted common stock of $0.3 million and $0.4 million during the three and nine months ended October 31, 2021, respectively. As of October 31, 2021, the remaining unrecognized stock-based compensation expense was $1.1 million, and will be recognized over the remaining vesting period.

A portion of the consideration otherwise payable was held back by the Company as partial security for certain indemnification obligations. The consideration held back will be released 12 months after the acquisition date, subject to reduction for any indemnification claims.

Certain stock options held by Sensu employees were assumed by the Company with a total fair value of $0.6 million and will be recognized as stock-based compensation over the remaining service period. See Note 10 for more details on the Sensu options assumed.

The acquisition was accounted for as a business combination and the total purchase consideration was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date and the excess was recorded as goodwill. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the issuance date of these condensed consolidated financial statements and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of October 31, 2021, the primary area that remains preliminary relates to the valuation of certain tax-related items.

The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date (in thousands):


	Amount
Cash and cash equivalents	$	2,270
Accounts receivable	409
Other current assets	50
Acquired intangible assets	11,800
Goodwill	19,889
Accounts payable	(49)
Deferred revenue, current	(658)
Accrued expenses and other current liabilities	(143)
Deferred revenue, noncurrent	(99)
Other liabilities	(747)
Total acquisition consideration	$	32,722

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):


	Total		Useful Life (in years)
Developed technology	$	8,800	3
Customer relationships	3,000		5
Intangible assets	$	11,800

Goodwill represents the future economic benefits arising from other assets that could not be individually identified and separately recognized, such as the acquired assembled workforce and synergies expected to be achieved from the integration of Sensu. In addition, goodwill represents the future benefits as a result of the acquisition that management expects to enhance the Company’s product available to both new and existing customers and increase the Company’s market position. Goodwill is not deductible for tax purposes.

The results of operations of Sensu from the date of acquisition have been included in the Company’s condensed consolidated financial statements. Pro forma revenue and results of operations have not been presented because the historical results of Sensu are not material to the Company’s condensed consolidated financial statements in any period presented.

DF Labs S.p.A.

On May 24, 2021, the Company completed the acquisition of DF Labs S.p.A. (“DFLabs”), a privately-held Italian corporation and a leader in security orchestration, automation and response (“SOAR”) technology. The combination of the Company’s Cloud SIEM and DFLabs' solution will provide customers with comprehensive cloud-native security intelligence solutions.

The aggregate amount recorded as purchase consideration was $41.7 million, of which $35.3 million was paid in cash, and $6.4 million was comprised of 334,815 shares of the Company’s common stock. The value of consideration assigned to such shares of common stock was based on the closing price of the Company’s common stock on the date of acquisition, or $18.97 per share.

Additionally, 143,492 shares of common stock were issued with a fair value of $18.97 per share at the time of grant and will be recorded as stock-based compensation. These shares are subject to risk of forfeiture, which lapses in full 2.0 years after the acquisition date. The Company recorded stock-based compensation expense related to the vesting of the restricted common stock of $0.3 million and $0.6 million during the three and nine months ended October 31, 2021, respectively. As of October 31, 2021, the remaining unrecognized stock-based compensation expense was $2.1 million and will be recognized over the remaining vesting period.

A portion of the consideration otherwise payable was placed into escrow as partial security for certain indemnification obligations. The escrow fund will be released 12 months after the acquisition date, subject to reduction for any indemnification claims.

issuance date of these condensed consolidated financial statements and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of October 31, 2021, the primary area that remains preliminary relates to the valuation of certain tax-related items.

The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date (in thousands):


	Amount
Cash and cash equivalents	$	782
Accounts receivable	430
Other current assets	111
Property and equipment	435
Acquired intangible assets	17,200
Goodwill	26,623
Other assets	178
Accounts payable	(262)
Deferred revenue, current	(340)
Accrued expenses and other current liabilities	(788)
Deferred revenue, noncurrent	(38)
Other liabilities	(2,654)
Total acquisition consideration	$	41,677

Acquired intangible assets consist of developed technology with an estimated useful life of 3 years.

Goodwill represents the future economic benefits arising from other assets that could not be individually identified and separately recognized, such as the acquired assembled workforce of DFLabs and synergies expected to be achieved from the integration of DFLabs. In addition, goodwill represents the future benefits as a result of the acquisition that management expects to enhance the Company’s product available to both new and existing customers and increase the Company’s market position. Goodwill is not deductible for tax purposes.

The results of operations of DFLabs from the date of acquisition have been included in the Company’s condensed consolidated financial statements. Pro forma revenue and results of operations have not been presented because the historical results of DFLabs are not material to the Company’s condensed consolidated financial statements in any period presented.

Acquisition-Related Expenses

The Company incurred acquisition-related expenses primarily for professional services of $3.8 million, which were recorded as general and administrative expenses in the consolidated statement of operations.

Acquired Intangible Assets

Acquired intangible assets, net consisted of the following (in thousands):


	October 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Useful Life (in years)
Developed technology	$	44,196	$	(16,542)	$	27,654	2.3
Customer relationships	3,000		(233)		2,767		4.7
Total	$	47,196	$	(16,775)	$	30,421


	January 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Useful Life (in years)
Developed technology	$	20,093	$	(9,437)	$	10,656	1.8

The Company recorded amortization expense of $3.8 million and $1.7 million during the three months ended October 31, 2021 and 2020, respectively and $8.4 million and $5.1 million during the nine months ended October 31, 2021 and 2020, respectively. There was no impairment of intangible assets recorded for the nine months ended October 31, 2021 or 2020. Fully amortized intangible assets were written off in the amount of $1.0 million during the nine months ended October 31, 2021.

As of October 31, 2021, future amortization expense related to acquired developed technology was as follows (in thousands):


	Amortization Expense
Remainder of fiscal 2022	$	3,779
2023	13,480
2024	8,970
2025	3,375
2026	600
Thereafter	217
Total amortization expense	$	30,421

As of January 31, 2021, future amortization expense related to acquired developed technology was as follows (in thousands):


	Amortization Expense
2022	6,146
2023	4,510
Total amortization expense	$	10,656

Goodwill

Changes in the carrying amount of goodwill for the nine months ended October 31, 2021 was as follows (in thousands):


	Amounts
Balance as of January 31, 2021	$	50,672
Acquisitions	46,512
Foreign currency translation	(1,369)
Balance as of October 31, 2021	$	95,815

There was no impairment of goodwill recorded for the nine months ended October 31, 2021 or 2020.

Leases

9 Months Ended

Oct. 31, 2021

Leases [Abstract]

Leases

The Company leases office space globally under non-cancelable operating lease agreements that expire at various dates through fiscal 2026. The leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases include (i) renewal options at the election of the Company to renew or extend the lease for an additional 6 years, and/or (ii) options to terminate the lease early, subject to certain termination penalties and fees. These optional renewal and terminations periods have not been considered in the determination of the RoU asset and lease liabilities associated with these leases, as the Company did not consider it reasonably certain it would exercise the options.

The Company evaluated its contracts and determined each of its identified leases are classified as operating leases. The Company has no lease agreements that are classified as finance leases as of October 31, 2021.

The following table presents the components of operating lease expense (in thousands):


	Three Months Ended October 31, 2021		Nine Months Ended October 31, 2021
Operating lease expense	$	1,109	$	3,367
Variable lease expense	115		381
Short-term lease expense	20		39
Sublease income	65		151

As of October 31, 2021, the weighted average remaining lease term was 1.9 years and the weighted average discount rate used to determine the net present value of the lease liability was 3.1%.

Rent expense under ASC 840 was $0.8 million and $2.3 million for the three and nine months ended October 31, 2020.

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


	Three Months Ended October 31, 2021		Nine Months Ended October 31, 2021
Cash paid for amounts included in the measurement of lease liabilities	$	1,190	$	3,580

As of October 31, 2021, remaining maturities of lease liabilities are as follows (in thousands):


	Amount
Remainder of 2022	$	1,205
2023	4,776
2024	1,997
2025	349
2026	54
Total lease payments	$	8,381
Less: imputed interest	(225)
Present value of lease liabilities	$	8,156

Debt	9 Months Ended
Debt	Oct. 31, 2021
Debt Disclosure [Abstract]
Debt	Debt In February 2021, the Company entered into an Amended and Restated Loan and Security Agreement with Silicon Valley Bank (“SVB Agreement”) which provides for a revolving line of credit facility. The SVB Agreement amends and restates the Loan and Security Agreement dated January 31, 2016. Under the SVB Agreement, the Company can borrow up to $50 million. Interest on any drawdown accrues at the prime rate minus a spread rate ranging from 0.25% to 0.75%, as determined by the Company’s adjusted quick ratio, subject to either a 3.00% or 2.50% floor depending on the adjusted quick ratio. The SVB Agreement is secured by substantially all of the Company’s assets and includes restrictive covenants, in each case subject to certain exceptions, that limit the Company’s ability to, among other things: incur debt, grant liens, make acquisitions, suffer changes in control, make investments, make certain dividends or distributions, repurchase or redeem stock, dispose of or transfer assets, and enter into transactions with affiliates. Pursuant to the SVB Agreement, the Company is required to maintain a minimum adjusted quick ratio of 1.25 to 1.00. The SVB Agreement also contains customary events of default, upon which Silicon Valley Bank may declare all or a portion of the Company’s outstanding obligations payable to be immediately due and payable. As of October 31, 2021 and January 31, 2021, the Company did not have any debt balance outstanding. The Company was in compliance with the financial covenants associated with the SVB Agreement as of October 31, 2021.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Commitment and Contingencies	9 Months Ended
Commitment and Contingencies	Oct. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Non-Cancellable Purchase Commitments During the nine months ended October 31, 2021, there were no material changes, outside the ordinary course of business, to the Company’s contractual obligations and commitments reported in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. Other Obligations Litigation and Other Matters From time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable. Attorneys representing a purported class of current and former employees in various sales roles alleged potential claims of employee misclassification and related federal and state law claims, which the Company disputed. In response, the Company mediated the dispute, and in August 2020, the Company entered into a settlement agreement with the purported class counsel to resolve the dispute, which was handled in arbitration and resulted in the Company paying $4.5 million to resolve the class-wide claims during the nine months ended October 31, 2021. As of January 31, 2021, the Company had recorded $4.5 million related to these claims within accrued expenses and other current liabilities on the condensed consolidated balance sheet. The Company is not always able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued. In management’s opinion, resolution of all current matters, including employment matters, is not expected to have a material adverse impact on the Company’s business, financial position, results of operations, or cash flows as of October 31, 2021 or January 31, 2021.

Revenue

9 Months Ended

Oct. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

The following table presents the Company’s revenue by geographic region, based on the billing address of the customer, for the periods indicated (in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
United States	$	49,742	$	44,636	$	143,966	$	125,648
International	12,274		7,232		31,110		22,837
Total revenue	$	62,016	$	51,868	$	175,076	$	148,485

No individual foreign country contributed 10% or more of revenue for the three and nine months ended October 31, 2021 and 2020.

No customer individually accounted for 10% or more of the Company’s revenue for the three and nine months ended October 31, 2021 or 2020.

Deferred Revenue and Remaining Performance Obligations

The Company recognized revenue of $48.8 million and $38.1 million during the three months ended October 31, 2021 and 2020, respectively, and $97.2 million and $77.6 million during the nine months ended October 31, 2021 and 2020, respectively that was included in the deferred revenue balance at the beginning of the respective periods.

As of October 31, 2021, future estimated revenue related to performance obligations from non-cancelable contracts that were unsatisfied or partially unsatisfied was $294.2 million and the Company expects to recognize revenue of $194.3 million for these remaining performance obligations over the next 12 months, with the remaining balance recognized thereafter.

Accounts Receivable, Net and Contract Assets

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The allowance is based upon historical loss patterns, the age of each past due invoice, and expectations of forward-looking loss estimates to determine whether the allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. The allowance for credit losses was $0.3 million and $0.1 million as of October 31, 2021 and January 31, 2021, respectively.

As of October 31, 2021, one customer accounted for 18% of total accounts receivable. As of January 31, 2021, one customer accounted for 10% of total accounts receivable.

Unbilled receivables are recorded when revenue recognized on a contract exceeds the billings to date for that contract and the right to consideration is unconditional when only passage of time is required before payment of that consideration is due, net of allowance for credit losses. Unbilled receivables totaled $1.0 million as of October 31, 2021 and January 31, 2021, respectively, and were recorded within accounts receivable, net on the condensed consolidated balance sheets.

Contract assets are recorded when revenue recognized on a contract exceeds the billings to date for that contract and the right to consideration is conditional. There are no contract assets on the condensed consolidated balance sheet as of October 31, 2021. Contract assets totaled $1.6 million as of January 31, 2021, and were recorded within other current assets on the condensed consolidated balance sheets.

Deferred Sales Commissions

The Company capitalized sales commission of $6.8 million and $10.8 million during the three months ended October 31, 2021 and 2020, respectively and $16.3 million and $17.7 million during the nine months ended October 31, 2021 and 2020, respectively. Amortized costs were $4.2 million and $2.9 million for the three months ended October 31, 2021 and 2020, respectively and $11.4 million and $8.1 million for the nine months ended October 31, 2021 and 2020. There was no impairment loss in relation to deferred sales commissions for the nine months ended October 31, 2021 or 2020.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

Stockholders' Equity and Equity Incentive Plans

9 Months Ended

Oct. 31, 2021

Equity [Abstract]

Stockholders' Equity and Equity Incentive Plans

Stockholders’ Equity and Equity Incentive Plans

Redeemable Convertible Preferred Stock

Upon the closing of the Company’s IPO, all 63,761,950 shares of redeemable convertible preferred stock were automatically converted into shares of common stock on a one-to-one basis, and the carrying value of $340.2 million was reclassified into common stock and additional paid-in-capital. As of October 31, 2021, there were no shares of redeemable convertible preferred stock issued and outstanding.

Common Stock

The Company’s Amended and Restated Certificate of Incorporation authorized the Company to issue 1,000.0 million shares of common stock at a par value of $0.0001 as of October 31, 2021 and January 31, 2021. As of October 31, 2021 and January 31, 2021, approximately 111.8 million and 102.5 million shares of common stock were issued and outstanding, respectively.

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of October 31, 2021 and January 31, 2021, no dividends had been declared.

Stock Plans

The Company has two equity incentive plans: the 2010 Stock Plan (the “2010 Plan”) and the 2020 Equity Incentive Plan (the “2020 Plan”). In connection with the Company’s IPO in September 2020, the 2010 Plan was terminated and replaced by the 2020 Plan and all shares that remained available for issuance under the 2010 Plan at that time were reserved for issuance under the 2020 Plan. The number of shares of common stock available for issuance under the 2020 Plan will be increased by any shares of common stock subject to awards outstanding under the 2010 Plan that expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for satisfying tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest.

The Company has issued stock options and restricted stock units (“RSUs”) to employees, directors, consultants, and advisors pursuant to both the 2010 Plan and 2020 Plan.

Employee stock options are granted with an exercise price no less than the fair value of the underlying common stock on the grant date, in general vest based on continuous service over four years, and expire 10 years from the date of grant. The value of RSUs is measured based on the grant date fair value of the awards and in general vest based on satisfying a service-based condition based on continuous service over four years.

As of October 31, 2021, there were 14.6 million shares available for grant under the 2020 Plan. The 2020 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2021, by an amount equal to the least of (i) 12,500,000 shares, (ii) 5% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as the administrator of the 2020 Plan may determine.

Stock Options

The following table is a summary of option activity during the nine months ended October 31, 2021:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)			(years)	(in thousands)
Balance at January 31, 2021	24,768	$	4.16	6.7	$	749,111
Options granted	—	$	—
Options exercised	(5,802)	$	3.07
Options cancelled	(1,171)	$	7.39
Balance at October 31, 2021	17,795	$	4.31	6.1	$	230,853
Options exercisable at October 31, 2021	14,040	$	3.44	5.7	$	194,169

No stock options were granted during the three months ended October 31, 2021. Stock options granted during the three months ended October 31, 2020 had a weighted-average grant-date fair value $11.13 per share. The aggregate intrinsic value of options exercised during the three months ended October 31, 2021 and 2020 was $19.4 million and $17.0 million, respectively.

No stock options were granted during the nine months ended October 31, 2021. Stock options granted during the nine months ended October 31, 2020 had a weighted-average grant-date fair value $6.21 per share. The aggregate intrinsic value of options exercised during the nine months ended October 31, 2021 and 2020 was $99.5 million and $25.9 million, respectively.

No income tax benefits have been recognized for stock-based compensation arrangements. As of October 31, 2021, there was $18.6 million of total unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 1.8 years.

Early Exercise of Employee Options

As of October 31, 2021 and January 31, 2021, the Company had a liability of $0.1 million and $0.2 million for 26,875 and 75,250 shares, respectively, of common stock that were unvested and early exercised by employees.

Restricted Stock Units

The following table is a summary of RSU activity for the nine months ended October 31, 2021:


	Number of Shares	Weighted Average Grant Date Fair Value per Share
	(in thousands)
Balance at January 31, 2021	3,757	$	15.07
Granted(a)(b)	5,550	$	20.32
Released	(1,567)	$	14.42
Forfeited	(906)	$	18.84
Balance at October 31, 2021	6,834	$	18.98
RSUs expected to vest at October 31, 2021	6,834	$	18.98

______________

(a)During the nine months ended October 31, 2021, of the 5.6 million RSUs granted, 0.1 million awards were subject to both service-based and performance-based vesting conditions.

(b)In connection with the acquisitions, the Company agreed to grant 0.4 million RSUs to employees of the acquired companies.

As of October 31, 2021, there was $108.8 million of total unrecognized compensation expense related to unvested employee and director RSUs, of which $2.1 million is for the RSUs subject to certain other performance metrics. Total unrecognized compensation expense related to unvested RSUs is expected to be recognized over a weighted-average period of 3.4 years.

Sensu Plans

In connection with the acquisition of Sensu, the Company assumed 33,267 options to purchase shares of common stock, granted under the Sensu, Inc. Amended and Restated 2017 Equity Incentive Plan, at a weighted-average exercise price of $4.88 per share and weighted-average fair value of $17.19 per share, of which 33,062 remained outstanding as of October 31, 2021. As of October 31, 2021, 9,001 options were vested and exercisable with a weighted-average exercise price of $4.80, and the total unrecognized compensation expense related to these awards was $0.4 million. During the nine months ended October 31, 2021, 205 options were exercised.

Jask Labs Plans

In connection with the acquisition of Jask Labs, the Company assumed 265,075 options to purchase shares of common stock, granted under the Jask Labs 2015 Stock Option and Grant Plan and the Jask Labs 2018 Equity Incentive Plan (together, the “Jask Plans”), at a weighted-average exercise price of $9.86 per share and weighted-average fair value of $6.39 per share, of which 116,162 and 140,348 remained outstanding as of October 31, 2021 and January 31, 2021, respectively. As of October 31, 2021, 98,247 options were vested and exercisable with a weighted-average exercise price of $10.55, and the total unrecognized compensation expense related to these awards was $0.1 million. During the nine months ended October 31, 2021, 22,623 options were exercised.

Employee Stock Purchase Plan

In September 2020, the board of directors adopted and the stockholders of the Company approved the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective on September 17, 2020. The ESPP was amended in September 2021. The ESPP initially reserved and authorized the issuance of up to a total of 2,000,000 shares of common stock to participating employees. The number of shares reserved under the ESPP will automatically increase on the first day of each fiscal year, starting on February 1, 2021, in an amount equal to the least of (i) 2,500,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as the administrator of the ESPP may determine. The ESPP generally provides for 24-month offering periods beginning June 15 and December 15 of each year, with each offering period consisting of four six-month purchase periods. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock as of the beginning of the offering period or (2) the fair market value of the Company’s common stock on the purchase date, as defined in the ESPP. Under the reset provision currently authorized, if the closing stock price on the offering date of a new offering falls below the closing stock price on the offering date of an ongoing offering, the ongoing offering would terminate immediately following the purchase of ESPP shares on the purchase date immediately preceding the new offering and participants in the terminated ongoing offering would automatically be enrolled in the new offering (“ESPP reset”), resulting in a modification charge to be recognized over the new offering period.

The Company recognized stock-based compensation expense related to the ESPP of $0.8 million and $0.3 million during the three months ended October 31, 2021 and 2020, respectively, and $3.3 million and $0.3 million during the nine months ended October 31, 2021 and 2020, respectively. As of October 31, 2021 and January 31, 2021, $3.0 million and $2.5 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions, respectively. As of October 31, 2021, there was $6.8 million of unrecognized stock-based compensation expense related to the ESPP that is expected to be recognized over an average vesting period of 0.9 years.

During the nine months ended October 31, 2021, 279,600 shares of common stock were issued under the ESPP at a purchase price of $16.90.

Stock-Based Compensation Expense

The following table presents total stock-based compensation expense included in the condensed consolidated statements of operations (in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
Cost of revenue	$	191	$	213	$	520	$	314
Research and development(a)	6,441		5,728		16,957		9,606
Sales and marketing	3,749		4,747		11,393		7,863
General and administrative	2,556		8,255		10,257		10,883
Total stock-based compensation expense	$	12,937	$	18,943	$	39,127	$	28,666

________________

(a)During the nine months ended October 31, 2021, the Company did not capitalize any stock-based compensation related to internal-use software development costs. During the three and nine months ended October 31, 2020, the Company capitalized stock-based compensation of $0.1 million and $0.3 million related to internal-use software development costs, respectively. The research and development stock-based compensation amounts are presented net of the capitalized costs.

In connection with the acquisition of Jask Labs, the Company granted 130,180 shares of restricted common stock, with a fair value of $12.11683 per share at the time of grant, that vest over a period of two years. The Company recorded $0.2 million in stock-based compensation expense related to the vesting of the restricted common stock during the three months ended October 31, 2021 and 2020 and $0.6 million during the nine months ended October 31, 2021 and 2020. As of October 31, 2021, the awards were fully vested.

The RSUs granted under the 2010 Plan were subject to service-based and performance-based vesting conditions, which included a liquidity event condition. In certain cases the RSUs are also subject to certain other performance metrics. The liquidity event performance-based vesting condition was deemed probable of occurring upon the completion of the IPO. On that date the Company recorded cumulative stock-based compensation expense of $10.9 million using the accelerated attribution method. The remaining unrecognized stock-based compensation expense will be recorded over the RSUs remaining requisite service periods. Included within these amounts was $1.4 million for the RSUs subject to both the occurrence of a liquidity event and certain other performance metrics.

Common Stock Transfers

During the nine months ended October 31, 2020, certain of the Company’s existing investors acquired outstanding common stock from former employees of the Company, for a purchase price greater than the fair value of the common stock at the time of the transaction. In connection with these stock transfers, the Company waived its right of first refusal and other transfer restrictions applicable to such shares. As a result, the Company recorded stock-based compensation of $0.3 million for the nine months ended October 31, 2020, in general and administrative expenses in the condensed consolidated statements of operations. The amount recorded as stock-based compensation represents the difference between the price paid and the estimated fair value at the date of the transaction.

Income Taxes	9 Months Ended
Income Taxes	Oct. 31, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Accounting for income taxes for interim periods generally requires the provision for income taxes to be determined by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss before income taxes, adjusted for discrete items, if any, for the reporting period. The Company updates its estimate of the annual effective tax rate each quarter and records a cumulative adjustment in such period. The Company recorded an income tax benefit of $0.6 million and $1.1 million for the three and nine months ended October 31, 2021, respectively. The Company recorded income tax expense $0.4 million and $0.8 million for the three and nine months ended October 31, 2020, respectively. Income tax expense consists primarily of income taxes in foreign jurisdictions in which the Company conducts business. Due to the Company’s history of losses in the United States, a full valuation allowance on substantially all of the Company’s deferred tax assets, including net operating loss carryforwards, research and development tax credits, capitalized research and development, and other book versus tax differences was maintained. The Company recorded a one-time tax benefit of $0.7 million due to a partial release of our valuation allowance in connection with the acquisition of Sensu. The American Rescue Plan Act of 2021 (“American Rescue Plan”) was enacted by the United States on March 11, 2021. The American Rescue Plan did not have a material impact on the Company’s provision for income taxes for the three or nine months ended October 31, 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Net Loss Per Share

9 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss per Share

Basic net loss per share attributable to the Company’s common stockholders is computed by dividing the net loss attributable to the Company’s common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic net loss per share for all years presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss position in each period presented.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
Net loss	$	(30,836)	$	(23,926)	$	(89,799)	$	(59,708)
Weighted-average shares outstanding, basic and diluted	110,409		55,816		107,479		31,044
Net loss per share, basic and diluted	$	(0.28)	$	(0.43)	$	(0.84)	$	(1.92)

The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):


	Three Months Ended October 31,		Nine Months Ended October 31,
	2021	2020	2021	2020
Stock options	17,795	25,234	17,795	25,234
RSUs	6,834	3,191	6,834	3,191
ESPP	205	44	205	44
Warrants	11	32	11	32
Shares subject to repurchase	242	166	242	166
Assumed options for acquisitions	149	142	149	142
Issuable shares for acquisitions	194	543	194	543

Total anti-dilutive securities	25,430	29,352	25,430	29,352

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Oct. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	The Company’s condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of January 31, 2021, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by GAAP for complete consolidated financial statements. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021, as filed with the SEC on March 12, 2021.
Principles of Consolidation	The Company’s condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments that are necessary for the fair statement of the Company’s condensed consolidated financial information. The results of operations for the three and nine months ended October 31, 2021 are not necessarily indicative of the results to be expected for the year ending January 31, 2022 or for any other interim period or for any other future year.
Fiscal Year	The Company’s fiscal year ends on January 31. Unless otherwise stated, references to year in these condensed consolidated financial statements relate to the above described fiscal year rather than calendar year.
Use of Estimates and Judgments	The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements and may involve subjective or significant judgment by the Company; therefore, actual results could differ from the Company’s estimates. The Company’s accounting policies that involve judgment include revenue recognition, period of benefit for deferred sales commissions, assumptions used for estimating the fair value of common stock to calculate stock-based compensation (prior to the closing of the Company’s initial public offering (“IPO”)), capitalization of internal-use software costs, valuation of goodwill and intangible assets, estimate of credit losses for accounts receivable and marketable securities, and valuation allowances associated with income taxes.
Covid-19	While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the duration and spread of the outbreak, the emergence of variants of the virus, the extent and effectiveness of containment actions, and the effectiveness of vaccination efforts, it has already had an adverse effect on the global economy and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown. The Company may experience customer losses, including due to bankruptcy or customers ceasing operations, which may result in delays in collections or an inability to collect accounts receivable from these customers. The extent to which the COVID-19 pandemic, including the emergence of variants of the virus, may continue to impact the Company’s financial condition, results of operations, or liquidity continues to remain uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, which will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.
Marketable Securities	Marketable securities consist of U.S. Treasury securities, corporate debt securities, commercial paper, foreign government obligations, supranational securities, and certificates of deposits. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. Interest receivable on these securities is presented in other current assets on the condensed consolidated balance sheets. All marketable securities are recorded at their estimated fair values. When the fair value of a marketable security declines below its amortized cost basis, the carrying value of the security will be reduced to its fair value if it is more likely than not that management is required to sell the impaired security before recovery of its amortized basis, or management has the intention to sell the security. If neither of these conditions are met, the Company determines whether any portion of the decline is due to credit losses. Any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Company’s condensed consolidated statement of operations. When the fair value of the security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss) and are recognized in the Company’s condensed consolidated statement of operations only if the Company sells or intends to sell the security before recovery of its cost basis. Realized gains and losses are determined based on the specific identification method and are reported in interest and other (expense) income, net in the Company’s condensed consolidated statements of operations.
Leases	The Company enters into operating lease arrangements for real estate assets related to office space. The Company determines if an arrangement is or contains a lease at commencement by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date, which is the date the leased assets are made available for use. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, noncurrent in the condensed consolidated balance sheets. The Company did not have any financing leases in any of the periods presented. Operating lease right-of-use assets (“RoU”) and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist of the fixed payments under the arrangement, less any lease incentives, such as tenant improvement allowances. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-to-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The interest rate implicit in our operating leases is not readily determinable, and therefore an incremental borrowing rate (“IBR”) is estimated to determine the present value of future payments. The estimated IBR factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. Lease expenses are recognized on a straight-line basis over the lease term. The Company generally uses the non-cancelable lease term when recognizing the right-of-use assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised. The Company accounts for lease components and non-lease components as a single lease component. Leases with a term of 12 months or less are not recognized on the condensed consolidated balance sheets but are recognized as expense on a straight-line basis over the term of the lease.
Property and Equipment, Net	Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Land is not depreciated. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization are removed from the Company’s consolidated balance sheet and the resulting gain or loss is reflected in the Company’s consolidated statement of operations.
Related Party Transactions	Certain members of the Company’s board of directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements The Company assesses the adoption impacts of recently issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”) on its condensed consolidated financial statements. The sections below describe impacts from newly adopted pronouncements. In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842). This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about lease arrangements. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which amended the effective date of the new guidance. The Company adopted this guidance using a modified retrospective approach as of February 1, 2021. The Company has elected to use the optional transition method which allows the Company to apply the guidance of ASC 840, including disclosure requirements, in the comparative periods presented. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification related to agreements entered prior to adoption. The adoption of the new standard resulted in recognition of operating lease RoU assets and operating lease liabilities of $10.3 million and $11.5 million, respectively, as of February 1, 2021. There was no cumulative impact of transition to the Company’s accumulated deficit balance as of the adoption date. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued various amendments including ASU No. 2018-19, ASU No. 2019-04, and ASU No. 2019-05. The guidance and related amendments modify the accounting for credit losses for most financial assets and require the use of an expected loss model, replacing the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The Company adopted this guidance as of February 1, 2021, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting PronouncementsUnder the JOBS Act, the Company meets the definition of an emerging growth company and can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period.
Fair Value Measurements	The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows: Level 1 Observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the short maturity of those instruments.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Oct. 31, 2021

Accounting Policies [Abstract]

Property, Plant and Equipment

The following table presents the estimated useful lives of the Company’s property and equipment:


			Useful Life
Computer and hardware equipment			3 years
Furniture and fixtures			5 years
Leasehold improvements			Shorter of lease term or estimated useful life
Capitalized internal-use software			3 years
Building			10 - 22 years

Property and equipment, net, consisted of the following (in thousands):


	October 31, 2021		January 31, 2021
Computer and hardware equipment	$	3,147	$	2,206
Furniture and fixtures	2,003		1,773
Leasehold improvements	2,990		2,416
Capitalized internal-use software	3,386		3,386
Building	322		—
Land	90		—
Gross property and equipment(a)	11,938		9,781
Accumulated depreciation and amortization	(7,074)		(5,625)
Property and equipment, net	$	4,864	$	4,156

______________

Fair Value Measurements (Tables)

9 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis


	As of October 31, 2021
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	69,155	$	—	$	—	$	69,155
Corporate debt securities	—		644		—		644
Marketable securities:
U.S. Treasury securities	—		78,340		—		78,340
Corporate debt securities	—		134,888		—		134,888
Commercial paper	—		29,272		—		29,272
Foreign government obligations	—		6,211		—		6,211
Supranational securities	—		30,455		—		30,455
Certificates of deposit	—		4,620		—		4,620
Total financial assets	$	69,155	$	284,430	$	—	$	353,585


	As of January 31, 2021
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	397,200	$	—	$	—	$	397,200

Summary of Available-for-Sale Marketable Securities


	As of October 31, 2021
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U.S. Treasury securities	$	78,401	$	1	$	(62)	$	78,340
Corporate debt securities	135,019		4		(135)		134,888
Commercial paper	29,276		—		(4)		29,272
Foreign government obligations	6,221		—		(10)		6,211
Supranational securities	30,454		3		(2)		30,455
Certificates of deposit	4,622		—		(2)		4,620
Total marketable securities	$	283,993	$	8	$	(215)	$	283,786

Maturity of Marketable Securities

The following table presents the contractual maturities of the Company’s marketable securities (in thousands):


	October 31, 2021
Due in one year or less	$	210,633
Due after one year and within five years	73,153
Total marketable securities	$	283,786

Property and Equipment, Net (Tables)

9 Months Ended

Oct. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

The following table presents the estimated useful lives of the Company’s property and equipment:


			Useful Life
Computer and hardware equipment			3 years
Furniture and fixtures			5 years
Leasehold improvements			Shorter of lease term or estimated useful life
Capitalized internal-use software			3 years
Building			10 - 22 years

Property and equipment, net, consisted of the following (in thousands):


	October 31, 2021		January 31, 2021
Computer and hardware equipment	$	3,147	$	2,206
Furniture and fixtures	2,003		1,773
Leasehold improvements	2,990		2,416
Capitalized internal-use software	3,386		3,386
Building	322		—
Land	90		—
Gross property and equipment(a)	11,938		9,781
Accumulated depreciation and amortization	(7,074)		(5,625)
Property and equipment, net	$	4,864	$	4,156

______________

Long-lived Assets by Geographic Areas

The following table presents the Company’s long-lived assets by geographic region for the periods indicated (in thousands):


	October 31, 2021		January 31, 2021
United States	$	3,933	$	3,381
International	931		775
Total long-lived assets	$	4,864	$	4,156

Acquisitions, Intangible Assets and Goodwill (Tables)

9 Months Ended

Oct. 31, 2021

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date (in thousands):


	Amount
Cash and cash equivalents	$	2,270
Accounts receivable	409
Other current assets	50
Acquired intangible assets	11,800
Goodwill	19,889
Accounts payable	(49)
Deferred revenue, current	(658)
Accrued expenses and other current liabilities	(143)
Deferred revenue, noncurrent	(99)
Other liabilities	(747)
Total acquisition consideration	$	32,722

The following table presents the preliminary purchase consideration allocation recorded in the Company’s condensed consolidated balance sheet as of the acquisition date (in thousands):


	Amount
Cash and cash equivalents	$	782
Accounts receivable	430
Other current assets