What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-05 compared with 2025-03-05 · 95 added, 106 removed, 365 unchanged (36% of the section changed)

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References to fiscal 2026, for example, refer to the fiscal year ended January 31, 2026.

is the leading independent identity partner.

We are the leading independent identity partner.

Our Okta Platform and Auth0 Platform enable our customers to securely connect the right people to the right technologies and services at the right time.

Every day, thousands of organizations and millions of people use our platforms to securely access a wide range of cloud, mobile, web and Software-as-a-Service ("SaaS") applications, on-premises servers, application programming interfaces, IT infrastructure providers and services from a multitude of devices.

Employees and contractors sign into the Okta Platform to seamlessly and securely access the applications they need to do their most important work with more modern and secure experiences in the cloud and via mobile devices.

Developers leverage our Okta Platform and Auth0 Platform to securely and efficiently embed identity into the software they build, allowing them to innovate and focus on their core mission.

Given the growth trends in cloud adoption and the number of applications customers use and the movement to remote and hybrid workforces, identity is becoming the most critical layer of an organization’s security.

As organizations shift from network-based security models to a Zero Trust security model focusing on adaptive and context-aware controls, identity has become the most reliable way to manage user access and protect digital assets.

Our approach to identity allows our customers to simplify and efficiently scale their security infrastructures across internal IT systems and external customer facing applications.

As of January 31, 2025, more than 19,650 customers across nearly every industry used our solutions to secure and manage identities around the world.

Our customers consist of leading global organizations ranging from the largest enterprises, to small and medium-sized businesses, universities, non-profits and government agencies.

We also partner with leading application, IT infrastructure and security vendors through our Okta Integration Network.

Every day, thousands of organizations and millions of people use our platforms to securely access a wide range of cloud, mobile, web and Software-as-a-Service (“SaaS”) applications, on-premises servers, application programming interfaces (“APIs”), IT infrastructure providers, and services from a multitude of devices.

For IT and security leaders, the Okta Platform governs the seamless and secure access by human users and non-human identities (“NHIs”) to the applications they need to do their most important work.

We are expanding these capabilities to include AI agents with the introduction of new product offerings currently in development and early access.

Developers leverage our Okta Platform and Auth0 Platform to securely and efficiently embed identity for both human users and, increasingly, AI agents into the software they build, allowing them to innovate and focus on their core mission.

Our customers consist of leading global organizations ranging from the largest enterprises to small- and medium-sized businesses, universities, nonprofits and government agencies.

We partner with a broad range of application, IT infrastructure and security vendors through our Okta Integration Network.

As of January 31, 2026, we had over 7,000 integrations with these cloud, mobile and web applications, and IT infrastructure and security vendors.

We employ a SaaS business model and generate revenue primarily by selling multi-year subscriptions to our cloud-based offerings.

We focus on attracting and retaining our customers and increasing the value we provide to them over time.

By retaining customers and increasing value, we increase their spending with us through expanding the number of users who access our Okta Platform and Auth0 Platform, and by selling additional product offerings.

We sell our product offerings directly through our field and inside sales teams, as well as indirectly through our network of channel partners, including resellers, system integrators and other distribution partners.

We focus on attracting and retaining our customers by building on and increasing the value we provide to them over time.

This commitment to our customers’ success helps drive increased customer investment in the number of users of our Okta Platform and Auth0 Platform and adoption of our additional product offerings.

We sell our product offerings directly through our field and inside sales teams, as well as indirectly through our network of channel partners, including cloud marketplaces, resellers, system integrators and other distribution partners.

Our subscription fees include the use of our service and our technical support and management of our platforms.

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Future growth may be impacted by longer sales cycles, which we have experienced, which in turn, could result in delays in deals closing, creating near-term headwinds for cash flow, remaining performance obligations (“RPO”) and billings growth as well as potential future impacts on revenue growth and other key metrics on a trailing basis.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Impact of Cybersecurity Incidents

In the past we have experienced cybersecurity incidents, such as the January 2022 incident involving one of our third-party service providers and the October 2023 incident where a threat actor gained unauthorized access to and stole information from our third-party customer support system, that harmed our reputation and customer relations, adversely impacted our financial results and may create additional liabilities.

While we expect the impact of these security incidents to adversely affect our future financial performance, we cannot predict the extent of such impact with certainty.

Due to the nature of our business, the announcement of any security incidents, even if not significant, could have these impacts.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

the nature of our business, the announcement of any security incidents, even if not significant, could have these impacts.

Impact of Current Economic Conditions

Worldwide economic and political uncertainties and negative trends, including financial and credit market fluctuations, tariffs and increasing trade protectionism, changes in government spending levels, uncertainty in the banking sector, rising interest rates, inflation and other impacts from the macroeconomic environment have, and could continue to, adversely affect our business operations or financial results.

Worldwide economic and political uncertainties and negative trends, including financial and credit market fluctuations, tariffs and increasing trade protectionism, changes in government spending levels, uncertainty in the banking sector, changing interest rates, inflation and other impacts from the macroeconomic environment have, and could continue to, adversely affect our business operations or financial results.

As we continue to monitor the direct and indirect impacts of these circumstances, the broader implications of these macroeconomic and political events on our business, results of operations and overall financial position remain uncertain.

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For fiscal 2026, 2025 and 2024, our revenue was $2,919 million, $2,610 million and $2,263 million, respectively, representing a growth rate of 12% and 15% in fiscal 2026 and 2025, respectively.

For fiscal 2025, we generated net income of $28 million, and for fiscal 2024 and 2023, we generated net losses of $355 million and $815 million, respectively.

For fiscal 2026 and 2025, we generated net income of $235 million and $28 million, respectively, and for fiscal 2024, we generated a net loss of $355 million.

Our accumulated deficit as of January 31, 2026 was $2,567 million.

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(dollars in millions)

Number of total customers

19,650 18,950 17,600

Customers with annual contract value (“ACV”) above $100,000

5,100 4,800 4,485

Dollar-based net retention rate for the trailing 12 months ended 106 % 107 % 111 %

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Remaining performance obligations $ 4,827 $ 4,215 $ 3,385

Total Customers and Number of Customers with Annual Contract Value Above $100,000

As of January 31, 2025, we had over 19,650 customers on our platforms.

Increasing awareness of our platforms and capabilities, coupled with the mainstream adoption of cloud technology, has expanded the diversity of our customer base to include organizations of all sizes across all industries.

Beginning in the first quarter of fiscal 2026, we will no longer provide the number of total customers as a business metric on which to evaluate the strength of our business.

Number of Customers with Annual Contract Value Above $100,000

The number of customers who have greater than $100,000 in ACV with us was 5,100, 4,800 and 4,485 as of January 31, 2026, 2025 and 2024, respectively.

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We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract with us or one of our partners to access our platforms.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

For purposes of determining our customer count, we do not include customers that use our platforms under self-service arrangements only.

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Our Dollar-Based Net Retention Rate is based upon our ACV which is calculated based on the terms of that customer’s contract and represents the total contracted annual subscription amount as of that period end.

We calculate our Dollar-Based Net Retention Rate as of a period end by starting with the ACV from all customers as of twelve months prior to such period end ("Prior Period ACV").

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

calculate our Dollar-Based Net Retention Rate as of a period end by starting with the ACV from all customers as of twelve months prior to such period end (“Prior Period ACV”).

We then calculate the ACV from these same customers as of the current period end (“Current Period ACV”).

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We allocate shared costs, such as facilities costs (including rent, utilities and depreciation on assets shared by all departments), certain information technology costs, security costs and recruiting costs to all departments based on headcount.

As such, allocated shared costs are reflected in each of the cost of revenue and operating

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

expense categories.

As such, allocated shared costs are reflected in each of the cost of revenue and operating expense categories.

Employee compensation costs reflected in each of the cost of revenue and operating expense categories include salaries, bonuses, compensation related taxes, benefits and stock-based compensation.

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We will continue to invest in technology innovation and we anticipate that costs qualifying for capitalization of internal-use software costs and related amortization may fluctuate over time.

We expect our investment in technology to expand the capability of our platform, enabling us to improve our gross margin over time.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

expect our investment in technology to expand the capability of our platforms, enabling us to improve our gross margin over time.

The level and timing of investment in these areas could affect our cost of subscription revenue in the future.

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General and administrative expenses consist primarily of employee compensation costs for finance, accounting, legal, information technology and human resources personnel.

In addition, general and administrative expenses include acquisition and integration-related costs, non-personnel costs, such as legal, accounting and other professional fees, charitable contributions, and all other supporting corporate expenses, such as information technology, not allocated to other departments.

In addition, general and administrative expenses include acquisition and integration-related costs, non-personnel costs, such as legal, accounting and other professional fees, charitable contributions, allocated overhead and all other supporting corporate expenses.

Restructuring and Other Charges.

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Total operating expenses 2,109 2,066 2,198

Operating loss (74) (516) (812)

Operating income (loss)

149 (74) (516)

Interest expense (4) (5) (8)

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Income (loss) before provision for income taxes

46 (337) (801)

Provision for income taxes

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Total operating expenses 72 79 97

Operating loss (3) (23) (44)

Operating income (loss)

Interest expense — — —

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The increase in revenue was attributable to increased revenue from existing customers as reflected in our Dollar-Based Net Retention Rate of 106% as of January 31, 2026 and an increase in the number of customers as detailed in our Key Business Metrics.

For fiscal 2025, the decrease in professional services and other revenue was due to lower bookings associated with professional services.

For fiscal 2026, the increase in professional services and other revenue was due to higher bookings associated with professional services.

Beginning in fiscal 2027, we expect professional services and other revenue to decline as we shift more engagements to our partner ecosystem.

Cost of Revenue, Gross Profit and Gross Margin

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Total gross margin 77 % 76 %

For fiscal 2025, cost of subscription revenue increased primarily due to an increase of $15 million in labor costs and an increase in stock-based compensation of $7 million as we expanded our headcount.

Additionally, third-party hosting costs increased by $8 million as we expanded capacity to support our growth, while software and consulting costs increased by $7 million and $4 million, respectively.

For fiscal 2026, cost of subscription revenue increased primarily due to an increase of $20 million in labor costs, third-party hosting costs of $15 million, and software costs of $9 million.

This was offset by decreases in consulting costs of $10 million and stock-based compensation of $8 million.

Our gross margin for subscription revenue improved from 79% to 80% during fiscal 2026.

The increase was primarily driven by improved spend efficiency resulting in lower relative cost of subscription revenue.

For fiscal 2025, cost of professional services and other revenue decreased due to a reduction in labor costs of $7 million and a decrease in stock-based compensation of $3 million, driven by lower headcount.

For fiscal 2026, cost of professional services and other revenue increased due to an increase in labor costs of $15 million offset by a decrease in stock-based compensation of $2 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Our gross margin for professional services and other revenue improved to (29)% during fiscal 2025 from (36)% during fiscal 2024 primarily due to improved spend efficiency resulting in lower relative cost of professional services and other.

Our gross margin for professional services and other revenue remained relatively flat.

Operating Expenses

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Percentage of revenue 22 % 25 %

For fiscal 2025, research and development expenses decreased due to a reduction in stock-based compensation expense of $61 million, offset by increases in labor costs of $28 million, hosting fees of $6 million and software costs of $2 million.

For fiscal 2026, research and development expenses decreased due to a reduction in stock-based compensation expense of $20 million, offset by increases in labor costs of $15 million and hosting fees of $2 million.

The decrease in research and development as a percentage of total revenue was primarily driven by improved spend efficiency.

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Percentage of revenue 35 % 37 %

For fiscal 2025, sales and marketing expenses decreased primarily due to a reduction in labor costs of $34 million and a decrease in stock-based compensation expense of $25 million, driven by lower headcount.

For fiscal 2026, sales and marketing expenses increased primarily due to an increase in labor costs of $23 million, marketing costs of $12 million, travel and entertainment of $8 million, software costs of $2 million and stock-based compensation expense of $1 million.

The decrease in sales and marketing as a percentage of total revenue was primarily driven by improved spend efficiency.

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Percentage of revenue 15 % 17 %

For fiscal 2025, general and administrative expenses decreased primarily due to a reduction in stock-based compensation expense of $37 million, offset by increases in consulting costs of $12 million, labor costs of $9 million, and software costs of $6 million.

For fiscal 2026, general and administrative expenses remained flat.

Increases in labor costs of $13 million and stock-based compensation expense of $8 million were partially offset by decreases in legal and professional fees of $10 million and consulting costs of $8 million.

The decrease in general and administrative as a percentage of total revenue was primarily driven by improved spend efficiency.

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Percentage of revenue — % — %

For fiscal 2025, restructuring and other charges decreased primarily due to the absence of lease impairments along with a smaller overall restructuring plan implemented in fiscal 2025 compared to fiscal 2024.

Restructuring and other charges decreased in fiscal 2026 due to a reduction in the scale of restructuring initiatives compared to fiscal 2025.

Interest and Other, Net

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For fiscal 2026, interest and other, net decreased primarily due to a decrease in gains on early extinguishment of debt related to repurchases of the convertible senior notes offset by an increase in interest income from our short-term investments.

We expect interest income to decrease in fiscal 2027 as we deploy investable cash to fund our Share Repurchase Program, settle our 2026 Convertible Senior Notes obligation, and due to changes in the interest rate environment.

Provision for Income Taxes

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$ 20 $ 18 $ 2 14 %

For fiscal 2026, income tax expense resulted primarily from income in profitable foreign jurisdictions and state and local taxes, offset by the favorable impacts of the “One Big Beautiful Bill Act” (the “Act”) enacted on July 4, 2025.

For fiscal 2025, income tax expense resulted primarily from income in profitable foreign jurisdictions, federal and state taxes resulting from limitations on tax attribute utilization, offset by the impact of tax windfalls from stock-based compensation in the United States.

For fiscal 2024, income tax expense resulted primarily from income in profitable foreign jurisdictions, federal and state taxes resulting from tax attribution utilization limitations, and the tax impact of shortfalls from stock-based compensation in the United Kingdom.

The Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize research and development expenses over five years for U.S.

activities and 15 years for foreign activities, per IRC Section 174, instead of deducting them in the year they were incurred.

Starting in fiscal 2023, this change has increased our U.S.

federal and state cash taxes.

This impact is expected to continue in future years as our capitalized research and development expenses continue to increase.

The Organization for Economic Cooperation and Development ("OECD") and many countries have proposed to reallocate some portion of profits of large multinational companies with global revenues exceeding EUR 20 billion to markets where sales arise ("Pillar One"), as well as enacted a global minimum tax rate of at least 15% for multinationals with global revenues exceeding EUR 750 million ("Pillar Two"), with additional countries considering or intending to adopt these proposals.

In December 2022, the Council of the European Union ("EU") formally adopted the EU Minimum Tax Directive, which would require member states to adopt Pillar Two into their domestic law.

The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023.

Certain jurisdictions in which we operate have enacted Pillar Two legislation, with other countries considering changes to their tax laws to adopt the OECD's proposals.

The enactment of Pillar Two legislation is not expected to

The Act, among other provisions, maintains the U.S.

federal 21% corporate tax rate, makes permanent the immediate expensing of domestic research and development expenditures, allows for 100% bonus depreciation for qualified assets, and modifies the U.S.

taxation of profits derived from foreign operations.

The provisions of the Act have staggered effective dates beginning in 2025 and continuing through 2027.

Our provision for income taxes reported for fiscal 2026 was computed to reflect the effects of the change in the tax law.

We expect the immediate expensing of domestic R&D expenditures to be the most significant impact of the Act, resulting in a reduction in federal and state cash tax payments and in our provision for income taxes for future periods.

In addition, certain provisions of the Act, particularly those related to international taxation, are effective beginning in the fiscal period ending January 31, 2027.

We are currently evaluating the impact of these provisions on our financial statements and tax positions.

We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative.

The realization of the net deferred tax assets is dependent on our ability to generate sufficient

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

have a material adverse effect on our effective tax rate, financial position, results of operations and cash flows.

We will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative.

The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income during the periods prior to the expiration of tax attributes to fully utilize these assets.

Given our current and anticipated future earnings, we may release a significant portion of our valuation allowance if there is sufficient positive evidence that outweighs the negative evidence.

future taxable income during the periods prior to the expiration of tax attributes to fully utilize these assets.

Given our current and anticipated future earnings, we may release a significant portion of our valuation allowance in the foreseeable future if there is sufficient positive evidence that outweighs the negative evidence.

The release of the valuation allowance would result in the recognition of certain deferred tax assets and a corresponding decrease to income tax expense for the period the release is recorded.

However, the exact timing and amount of any potential valuation allowance released is uncertain.

However, the exact timing and amount of any potential valuation allowance release remains uncertain and is subject to change on the basis of the level of profitability that we are able to actually achieve.

As of January 31, 2026 we continue to maintain a full valuation allowance on our deferred tax assets in the United States.

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treasury securities, money market funds, corporate debt securities and certificates of deposit.

Historically, we have generated significant operating losses and both positive and negative cash flows from operations as reflected in our accumulated deficit and consolidated statements of cash flows.

Recent macroeconomic events, including rising interest rates, global inflation and bank failures, have led to further economic uncertainty in the global economy.

Recent macroeconomic events, including changes in interest rates, global inflation and bank failures, have led to further economic uncertainty in the global economy.

To mitigate risk, our cash and cash equivalents are distributed across large financial institutions.

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however, there can be no assurances that conditions in the banking sector and in global financial markets will not worsen and/or adversely affect us.

Effective the first quarter of fiscal 2025, we satisfy employee payroll tax withholding due upon the vesting of share-based compensation awards with our own funds under the "net share settlement" approach.

Previously, payroll tax withholding was satisfied via the sale of shares of our common stock in the open market.

The net share settlement approach reduces our equity dilution rate by covering such withholding tax obligations from existing cash reserves and impacts future liquidity.

The cash outflow to cover these tax obligations is classified as a financing activity in the statement of cash flows.

In September 2019, we completed our private offering of the 2025 Notes due on September 1, 2025 and received aggregate gross proceeds of $1,060 million.

The interest rate on the 2025 Notes is fixed at 0.125% per year and is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2020.

In connection with the 2025 Notes, we used a portion of the proceeds to enter into capped call transactions ("2025 Capped Calls") with respect to our Class A common stock.

As of January 31, 2025, the 2025 Notes are classified as current liabilities due to their upcoming maturity on September 1, 2025, and we currently intend to settle the principal amount of the 2025 Notes in cash.

In June 2020, we completed our private offering of the 2026 Notes due on June 15, 2026 and received aggregate gross proceeds of $1,150 million.

In January 2026, our board authorized a stock repurchase program of up to $1 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”).

We have and may repurchase shares of our Class A common stock from time to time through open market purchases, in privately negotiated transactions, or by other means.

Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18.

We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares.

The timing and the amount of stock repurchases under the Share Repurchase will be based on our evaluation of factors including business and market conditions, corporate and regulatory requirements, and other considerations.

The Share Repurchase Program does not obligate us to repurchase any specific number of shares and may be modified, suspended, or terminated at any time.

During the year ended January 31, 2026, we repurchased and immediately retired 875,150 shares of our Class A common stock for an aggregate amount, including commissions, of $79 million under the Share Repurchase Program.

As of January 31, 2026, approximately $921 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

We satisfy employee tax withholding obligations due upon the vesting of share-based awards through net share settlement using available cash.

This practice reduces our equity dilution rate and impacts liquidity as our cash requirements for these obligations are primarily driven by the market price of our Class A common stock at the time of vesting.

In fiscal 2026 and 2025 , cash paid to satisfy these employee tax withholding obligations was $192 million and $148 million , respectively.

In September 2019, we completed our private offering of the 2025 convertible senior notes (“2025 Notes”) due on September 1, 2025 and we used a portion of the proceeds to enter into capped call transactions (“2025 Capped Calls”) with respect to our Class A common stock.

The 2025 Notes matured on September 1, 2025, and we settled in full the principal amount then outstanding of $510 million in cash and the associated then outstanding 2025 Capped Calls expired unexercised.

In June 2020, we completed our private offering of the 2026 convertible senior notes (“2026 Notes”) due on June 15, 2026 and received aggregate gross proceeds of $1,150 million.

The interest rate on the 2026 Notes is fixed at 0.375% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020.

In connection with the 2026 Notes, we used a portion of the proceeds to enter into capped call transactions (“2026 Capped Calls”) with respect to our Class A common stock.

In the ordinary course of our business, we may, at any time and from time to time, seek to extinguish our outstanding Notes through cash purchases and/or exchanges for equity, in open-market purchases, privately negotiated transactions or otherwise.

Such extinguishments, if any, will be conducted on such terms and at such prices as we may determine, and will depend on our evaluation of the prevailing market conditions, trading price of the 2025 Notes and 2026 Notes (collectively, "the Notes"), our liquidity requirements, legal and contractual restrictions and other factors.

During fiscal 2025, we repurchased $42 million principal amount of the 2025 Notes for

As of January 31, 2026, the outstanding principal balance of the 2026 Notes of $350 million is classified as a current liability due to their upcoming maturity on June 15, 2026 and we currently intend to settle the principal amount of the 2026 Notes in cash.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

$40 million in cash, and $258 million principal amount of the 2026 Notes for $240 million in cash, which resulted in an aggregate gain on early extinguishment of debt of $19 million.

During fiscal 2024, we repurchased $508 million principal amount of the 2025 Notes for $462 million in cash, and $542 million principal amount of the 2026 Notes for $475 million in cash, which resulted in an aggregate gain on early extinguishment of debt of $106 million.

The 2025 Capped Calls and 2026 Capped Calls remained outstanding notwithstanding such repurchase.

We may, however, elect to terminate the 2025 Capped Calls or 2026 Capped Calls, in full or in part.

In connection with any such termination, the option counterparties or their respective affiliates are expected to modify their hedge positions, which activity could affect the market price of our Class A common stock or the trading price of the Notes that remain outstanding.

See Note 8 to our consolidated financial statements “Convertible Senior Notes, Net” and the section titled “Transactions relating to our Notes may affect the value of our Class A common stock” in “ Risk Factors ” included under Part I, Item 1A of this Annual Report on Form 10-K for additional information.

On February 1, 2024, we completed the acquisition of Spera Cybersecurity, Inc.

and its subsidiary ("Spera"), an identity security platform provider.

In the ordinary course of our business, we have and may, at any time and from time to time, seek to extinguish our outstanding 2026 Notes through cash purchases and/or exchanges for equity, in open-market purchases, privately negotiated transactions or otherwise.

Such extinguishments, if any, will be conducted on such terms and at such prices as we may determine, and will depend on our evaluation of the prevailing market conditions, trading price of the 2026 Notes, our liquidity requirements, legal and contractual restrictions and other factors.

See Note 8 to our consolidated financial statements “Convertible Senior Notes, Net” and the section titled “Transactions relating to the 2026 Notes may affect the value of our Class A common stock” in “ Risk Factors ” included under Part I, Item 1A of this Annual Report on Form 10-K for additional information.

On September 4, 2025, we acquired all of the outstanding equity of Axiom Security Ltd (“Axiom”), a privately held company specializing in privileged access management solutions.

The acquisition date cash consideration was $54 million.

Of this amount, $12 million was transferred to an escrow fund as partial security for any purchase price adjustments and indemnification obligations, and will be paid to the former Spera stockholders following the 18-month anniversary of the closing date (less any such adjustments or indemnification obligations).

See Note 16 to our consolidated financial statements “Business Combinations” for additional information.

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We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights;

additionally, we have, and may in the future, repurchase shares of our Class A common stock from time to time under our Share Repurchase Program.

We may be required to seek additional equity or debt financing.

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As of January 31, 2026, we had deferred revenue of $1,905 million, of which $1,875 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The following table summarizes our cash flows for the periods indicated:

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Net cash provided by (used in) investing activities 271 (314) 441

Net cash used in financing activities

(720) (359) (883)

Net cash provided by (used in) financing activities (359) (883) 48

Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash 14 (4) 1

Net increase (decrease) in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

$ 449 $ 73 $ 71

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Our primary uses of cash from operating activities are for employee-related expenditures, marketing expenses and third-party hosting costs.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

During fiscal 2026, cash provided by operating activities was $884 million, an increase of $134 million compared to fiscal 2025.

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Investing Activities

During fiscal 2025, cash used in investing activities was $314 million, compared to cash provided by investing activities of $441 million during fiscal 2024.

The change was primarily attributable to a decrease in proceeds from maturities and sales of available-for-sale securities and an increase in payments for business acquisitions and purchases of securities available-for-sale and other.

During fiscal 2026, cash provided by investing activities was $271 million, compared to cash used in investing activities of $314 million during fiscal 2025.

The change was primarily driven by higher proceeds from maturities and redemption of available-for-sale securities and a decrease in purchases of available-for-sale and other securities.

Financing Activities

During fiscal 2025, cash used in financing activities was $359 million, a decrease of $524 million compared to fiscal 2024.

The decrease was primarily attributable to lower volume of payments made for repurchases of the Notes offset by the taxes paid related to net share settlement of equity awards during fiscal 2025.

During fiscal 2026, cash used in financing activities was $720 million, an increase of $361 million compared to fiscal 2025.

The increase was primarily attributable to an increase in payments upon maturity and repurchases of convertible senior notes, an increase in taxes paid related to net share settlement of equity awards, and further impacted by common stock repurchases related to the initiation of our share repurchase program in fiscal 2026.

The cash outlay for common stock repurchases and taxes paid on net share settlement of equity awards are generally predicated on the closing price of our stock on the respective transaction dates.

Material Cash Requirements

Contractual Obligations

The following table represents the Company’s known short-term (i.e., the next twelve months) and long-term (i.e., beyond the next twelve months) obligations as of January 31, 2025:

The following table represents our known short-term (i.e., the next twelve months) and long-term (i.e., beyond the next twelve months) obligations as of January 31, 2026:

Short-term Long-term Total

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(3) Purchase obligations primarily relate to data center hosting facilities, and other sales and marketing obligations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Indemnification Agreements

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In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.

No material demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.

In the preparation of these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures.

In the preparation of these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

and expenses, and related disclosures.

To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected.

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Any residual purchase price is recorded as goodwill.

The allocation of the purchase price requires management to make significant

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets.

The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets.

These estimates can include, but are not limited to:

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• uncertain tax positions and tax-related valuation allowances;

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

• fair value of assumed equity awards.

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Revenue Recognition

We derive our revenues primarily from subscription fees and professional services fees.

We primarily derive our revenues from subscription fees.

A description of our revenue recognition policies is included in Note 2 to our consolidated financial statements “Summary of Significant Accounting Policies.”

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Our contracts with customers often contain multiple performance obligations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis