What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-27 compared with 2023-03-24 · 315 added, 360 removed, 928 unchanged (42% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID Number 185 )

R eport of Predecessor Auditor (PCAOB ID Number 248)

Report of Predecessor Auditor (PCAOB ID Number 248 )

Consolidated Balance Sheets

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheet of UiPath, Inc.

and subsidiaries (the Company) as of January 31, 2023, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the year ended January 31, 2023, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of UiPath Inc.

and subsidiaries (the Company) as of January 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended January 31, 2024, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2023, and the results of its operations and its cash flows for the year ended January 31, 2023, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended January 31, 2024, in conformity with U.S.

generally accepted accounting principles.

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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We have audited the accompanying consolidated balance sheet of UiPath, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of January 31, 2022, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity, and cash flows for each of the two years in the period ended January 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2022, and the results of its operations and its cash flows for each of the two years in the period ended January 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of January 31, 2022 (not presented herein), the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity, and cash flows for the year ended January 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2022, and the results of its operations and its cash flows for the year ended January 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

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Cash and cash equivalents $ 1,061,678 $ 1,402,119

Restricted cash 438 —

Marketable securities 818,145 354,774

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Stockholders’ equity:

Preferred stock, $ 0.00001 par value per share, 20,000 shares authorized as of January 31, 2023 and 2022;

0 shares issued and outstanding as of January 31, 2023 and 2022

Class A common stock, $ 0.00001 par value per share, 2,000,000 shares authorized as of January 31, 2023 and 2022;

474,160 and 458,773 shares issued and outstanding as of January 31, 2023 and 2022, respectively

Class B common stock, $ 0.00001 par value per share, 115,741 shares authorized as of January 31, 2023 and 2022;

82,453 shares issued and outstanding as of January 31, 2023 and 2022

Preferred stock, $ 0.00001 par value per share, 20,000 shares authorized;

none issued and outstanding

Class A common stock, $ 0.00001 par value per share, 2,000,000 shares authorized;

492,660 and 474,160 shares issued, respectively;

486,820 and 474,160 shares outstanding, respectively

Class B common stock, $ 0.00001 par value per share, 115,741 shares authorized;

82,453 shares issued and outstanding

Treasury stock, at cost, 5,840 shares and none , respectively

( 102,615 ) —

Additional paid-in capital 4,024,079 3,736,838

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Loss before income taxes ( 75,815 ) ( 317,561 ) ( 510,883 )

Provision for (benefit from) income taxes 10,791 14,703 ( 2,265 )

Provision for income taxes 14,068 10,791 14,703

Net loss $ ( 89,883 ) $ ( 328,352 ) $ ( 525,586 )

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Net loss $ ( 89,883 ) $ ( 328,352 ) $ ( 525,586 )

Other comprehensive (loss) income, net of tax:

Unrealized loss on available-for-sale marketable

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on available-for-sale marketable

securities, net 519 ( 284 ) ( 318 )

Foreign currency translation adjustments 694 ( 3,003 ) 23,738

Other comprehensive (loss) income ( 3,287 ) 23,420 ( 18,747 )

Other comprehensive income (loss), net 1,213 ( 3,287 ) 23,420

Comprehensive loss $ ( 88,670 ) $ ( 331,639 ) $ ( 502,166 )

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Convertible preferred stock Common stock

(Class A) Common stock

(Class B) Additional

capital Accumulated

comprehensive

income (loss) Accumulated

deficit Total stockholders’ equity (deficit)

Shares Amount Shares Amount Shares Amount Amount Amount Amount Amount

Balance as of January 31, 2020 282,108 $ 996,389 41,883 $ — 115,741 $ 1 $ 72,229 $ 6,226 $ ( 877,967 ) $ ( 799,511 )

Issuance of convertible preferred stock, net of issuance costs of $ 324

12,149 225,579 — — — — — — — —

Issuance of common stock upon exercise of stock options and restricted stock awards — — 28,196 1 — — 20,518 — — 20,519

Issuance of common stock upon vesting of restricted stock awards — — 10 — — — 373 — — 373

Stock-based compensation expense related to common stock secondary transactions — — 5,088 — ( 5,088 ) — 4,983 — — 4,983

Stock-based compensation — — — — — — 81,072 — — 81,072

Other comprehensive loss, net of tax — — — — — — — ( 18,747 ) — ( 18,747 )

Net loss — — — — — — — — ( 92,393 ) ( 92,393 )

Treasury stock

Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity (deficit)

Class A Class B

Shares Amount Shares Amount Shares Amount Shares Amount Amount Amount Amount Amount

Balance as of January 31, 2021 294,257 $ 1,221,968 75,177 $ 1 110,653 $ 1 — $ — $ 179,175 $ ( 12,521 ) $ ( 970,360 ) $ ( 803,704 )

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Balance as of January 31, 2023 — $ — 474,160 $ 5 82,453 $ 1 — $ — $ 3,736,838 $ 7,612 $ ( 1,824,298 ) $ 1,920,158

Issuance of common stock upon exercise of stock options — — 5,221 — — — — — 6,728 — — 6,728

Vesting of early exercise stock options — — — — — — — — 2 — — 2

Issuance of common stock upon settlement of restricted stock units — — 17,695 — — — — — — — — —

Tax withholdings on settlement of restricted stock units — — ( 6,061 ) — — — — — ( 113,162 ) — — ( 113,162 )

Charitable donation of Class A common stock — — 281 — — — — — 4,215 — — 4,215

Repurchase of Class A common stock — — — — — — ( 5,840 ) ( 102,615 ) — — — ( 102,615 )

Issuance of common stock under employee stock purchase plan — — 1,364 — — — — — 17,313 — — 17,313

Stock-based compensation expense — — — — — — — — 372,145 — — 372,145

Other comprehensive income, net of tax — — — — — — — — — 1,213 — 1,213

Net loss — — — — — — — — — — ( 89,883 ) ( 89,883 )

Balance as of January 31, 2024 — $ — 492,660 $ 5 82,453 $ 1 ( 5,840 ) $ ( 102,615 ) $ 4,024,079 $ 8,825 $ ( 1,914,181 ) $ 2,016,114

The accompanying notes are an integral part of these consolidated financial statements.

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Net loss $ ( 89,883 ) $ ( 328,352 ) $ ( 525,586 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 22,597 18,723 14,705

Amortization of deferred contract acquisition costs 75,471 59,826 39,257

Reversal of deferred contract acquisition costs and accrued sales commissions, net — — ( 9,229 )

Net amortization on marketable securities ( 28,246 ) ( 1,782 ) 1,954

Abandonment and impairment charges 2,881 — —

Stock-based compensation expense 371,955 369,840 515,583

Charitable donation of Class A common stock 4,215 5,499 —

Amortization of operating lease right-of-use assets 11,675 8,875 7,266

Non-cash operating lease expense 13,047 11,675 8,875

Abandonment and impairment charges — 2,881 —

Provision for deferred income taxes 554 861 ( 5,832 )

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Deferred revenue 137,471 160,746 105,481

Net cash (used in) provided by operating activities ( 9,981 ) ( 54,963 ) 29,177

Net cash provided by (used in) operating activities 299,082 ( 9,981 ) ( 54,963 )

Cash flows from investing activities:

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Cash flows from financing activities:

Proceeds from initial public offering, net of underwriting discounts and commissions — 692,369 —

Payments of initial public offering costs — ( 3,734 ) ( 732 )

Proceeds from issuance of convertible preferred stock — 750,000 225,903

Issuance costs related to convertible preferred stock — ( 164 ) ( 324 )

Repurchases of Class A common stock ( 102,615 ) — —

Proceeds from exercise of stock options 6,740 8,388 12,197

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Proceeds from employee stock purchase plan contributions 17,555 15,011 19,040

Payment of deferred consideration related to business acquisition ( 5,863 ) — —

Repurchase of unvested early exercised stock options — ( 1,493 ) —

Proceeds from credit agreement — — 78,587

Repayment of credit agreement — — ( 78,587 )

Payment of deferred loan costs related to senior secured credit facility — — ( 808 )

Proceeds from initial public offering, net of underwriting discounts and commissions — — 692,369

Payments of initial public offering costs — — ( 3,734 )

Proceeds from issuance of convertible preferred stock — — 750,000

Issuance costs related to convertible preferred stock — — ( 164 )

Net cash (used in) provided by financing activities ( 196,895 ) ( 60,669 ) 1,469,673

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Value of shares issued in payment of business acquisitions — 2,965 30,467

Deferred consideration related to business acquisitions 11,433 — —

Loan notes issued in connection with business acquisitions — 11,433 —

Reduction in accrued expenses and other liabilities for vesting of early exercised stock options 2 1,357 3,017

Tax withholdings on net settlement of restricted stock units, accrued but not yet paid 3,354 2,213 270

Property and equipment included in accounts payable 1,056 1,863 —

(1) Prior period amounts have been combined to conform to current presentation

Purchases of property and equipment included in accounts payable 511 1,056 1,863

The accompanying notes are an integral part of these consolidated financial statements.

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(the “Company,” “we,” “us,” or “our”) was incorporated in Delaware in June 2015 and is headquartered in New York, New York.

Our end-to-end automation platform, the UiPath Business Automation Platform, offers a robust set of capabilities that allows our customers to discover opportunities for automation, automate using a digital workforce that seamlessly collaborates with humans, and operate a mission critical automation program at scale.

We have legal presence in 32 countries, with our principal operations in the U.S.

, Romania, and Japan.

Our AI-powered UiPath Business Automation Platform offers a robust set of capabilities that allows our customers to discover opportunities for automation, automate using a digital workforce that seamlessly collaborates with humans, and operate a mission critical automation program at scale.

We have legal prese nce in 32 countries, with our principal operations in t he U.S., R omania, and Japan.

2 Summary of Significant Accounting Policies

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References to fiscal years 2024, 2023, and 2022 refer to the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

On July 9, 2020, we effected a three -for-one stock split of our outstanding common stock and convertible preferred stock, without any change in the par value per share.

All information related to common stock, convertible preferred stock, equity awards, and net loss per share presented in our consolidated financial statements and the accompanying notes reflects the impact of this stock split.

Use of Estimates

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We evaluate estimates based on historical and anticipated results, trends, and various other assumptions.

Such estimates include, but are not limited to, certain aspects of revenue recognition, estimated expected period of benefit for deferred contract acquisition costs, allowance for credit losses, fair value of financial assets and liabilities, fair value of acquired assets and assumed liabilities, useful lives of long-lived assets, capitalized software development costs, carrying value of operating lease ROU assets and operating lease liabilities, incremental borrowing rates for operating leases, amount of stock-based compensation expense including determination of fair value of common stock prior to our IPO, timing and amount of contingencies, costs related to our restructuring actions, uncertain tax positions, and valuation allowance for deferred income taxes.

Such estimates include, but are not limited to, certain aspects of revenue recognition, expected period of benefit for deferred contract acquisition costs, allowance for credit losses, fair value of financial assets and liabilities, fair value of acquired assets and assumed liabilities, useful lives of long-lived assets, capitalized software development costs, carrying value of operating lease ROU assets and operating lease liabilities, incremental borrowing rates for operating leases, amount of stock-based compensation expense including determination of fair value of common stock prior to our IPO, timing and amount of contingencies, costs related to our restructuring actions, uncertain tax positions, and valuation allowance for deferred income taxes.

Actual results could differ from these estimates and assumptions.

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Financial assets and liabilities denominated in currencies other than the functional currency are recorded at the exchange rate at the time of the transaction and subsequent gains and losses related to changes in the foreign currency are included in other income (expense), net in the consolidated statements of operations.

For fiscal years 2023, 2022 and 2021, we

Notes to Consolidated Financial Statements

recognized transaction (losses) gains of $( 0.5 ) million, $( 17.2 ) million, and $ 22.4 million, respectively, excluding the impact of foreign currency forward contracts, which are discussed below.

For fiscal years 2024, 2023 and 2022, we recognized foreign currency transaction gains (losses) of $ 0.3 million, $( 0.5 ) million, and $( 17.2 ) million, respectively, excluding the impact of foreign currency forward contracts (discussed below) in fiscal year 2022.

Derivative Financial Instruments

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We account for our derivative instruments as either assets or liabilities and carry them at fair value.

These foreign currency contracts are not designated and do not qualify as hedging instruments, as defined by ASC 815, Derivatives and Hedging .

Our foreign currency forward contract was terminated on January 28, 2022.

We did not have foreign currency forward contracts during fiscal year 2023.

We record changes in the fair value of these derivatives as a component of other income (expense), net in the consolidated statements of operations.

Net gains (losses) associated with foreign currency forward contracts were zero , $ 8.3 million and $( 4.0 ) million for fiscal years 2023, 2022 and 2021, respectively.

These foreign currency contracts are not designated and do not qualify as hedging

Notes to Consolidated Financial Statements

instruments, as defined by ASC 815, Derivatives and Hedging .

Our most recent foreign currency forward contract was terminated on January 28, 2022.

We recorded changes in its fair value as a component of other income (expense), net in the consolidated statements of operations.

Net gain associated with the foreign currency forward contract was $ 8.3 million for fiscal year 2022.

We did not have foreign currency forward contracts during fiscal year 2023 or 2024.

Concentration of Risks

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable.

We maintain our cash balance at financial institutions that management believes are high-credit, quality financial institutions, where deposits exceed the FDIC limits.

As of January 31, 2023 and 2022, 98 % and 96 % of our cash and cash equivalents were concentrated in the U.

, EU countries, and Japan, respectively.

We extend differing levels of credit to customers based on creditworthiness, do not require collateral deposits, and when necessary maintain reserves for potential credit losses based upon the expected collectability of accounts receivable.

We maintain our cash balance at financial institutions that management believes are high-credit, quality financial institutions, where deposits, at times, exceed FDIC limits.

As of January 31, 2024 and 2023, 91 % and 98 %, respectively, of our cash and cash equivalents were concentrated in the U.S., EU countries, and Japan.

The selection of investments in marketable securities is governed by our investment policy.

The policy aims to emphasize principles of safety and liquidity, with the overall objective of earning an attractive rate of return while limiting exposure to risk of loss and avoiding inappropriate concentrations.

We use this policy to guide our investment decisions as it stipulates, among other things, a list of eligible investment types, minimum ratings and other restrictions for each type, and overall portfolio composition constraints.

With regard to accounts receivable, we extend differing levels of credit to customers based on creditworthiness, do not require collateral deposits, and when necessary maintain reserves for potential credit losses based upon the expected collectability of accounts receivable.

We manage credit risk related to our customers by performing periodic evaluations of creditworthiness and applying other credit risk monitoring procedures.

Significant customers are those which represent 10% or more of our total revenue for the period or accounts receivable at the balance sheet date.

Significant customers are those that represent 10% or more of our total revenue for the period or accounts receivable at the balance sheet date.

For fiscal years 2024, 2023, and 2022, no single customer accounted for 10% or more of our total revenue.

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Level 3—Unobservable inputs for the asset or liability that are supported by little or no market activity and that are significant to the fair value.

Financial instruments consist of cash equivalents, marketable securities, accounts receivable, derivative financial instruments, and accounts payable.

Marketable securities and derivative instruments are recorded at fair

Notes to Consolidated Financial Statements

Financial instruments consist of cash equivalents, marketable securities, accounts receivable, and accounts payable.

Marketable securities are recorded at fair value.

Cash equivalents, accounts receivable and accounts payable are recorded at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.

Notes to Consolidated Financial Statements

Cash and Cash Equivalents

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Marketable Securities

Our marketable securities consist of corporate bonds, municipal bonds, agency bonds, treasury bills and commercial paper with original maturity dates of more than three months from the date of purchase.

Our marketable securities consist of corporate bonds, municipal bonds, agency bonds, treasury bills and U.S.

government securities, and commercial paper with original maturity dates of more than three months from the date of purchase.

We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate such designation at each balance sheet date.

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Credit-related unrealized losses are recognized as an allowance on the consolidated balance sheets with a corresponding charge to other income (expense), net in the consolidated statements of operations.

As of January 31, 2023, we have not recorded any allowance for credit losses related to our available-for-sale marketable securities.

As of January 31, 2024 and 2023 we did not record any allowance for credit losses related to our available-for-sale marketable securities, and we did not record any impairments related to these securities in fiscal years 2024, 2023, or 2022.

Accounts Receivable and Allowance for Credit Losses

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We write off accounts receivable when they are determined to be uncollectible.

We have not experienced significant credit losses from accounts receivable.

The allowance for credit losses was $ 1.1 million and $ 2.7 million as of January 31, 2024 and 2023, respectively.

Credit loss expense was $ 1.2 million, $ 0.7 million, and $ 2.2 million for fiscal years 2023, 2022, and 2021, respectively.

Notes to Consolidated Financial Statements

Credit loss (recovery) expense was $( 1.6 ) million, $ 1.2 million, and $ 0.7 million for fiscal years 2024, 2023, and 2022, respectively.

Property and Equipment, Net

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( 1 to 14 years)

Notes to Consolidated Financial Statements

Internal-Use Software

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We evaluate our long-lived assets, including these capitalized costs, for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable.

Beginning in the fourth quarter of fiscal 2022, we began to broadly market on-premises versions of certain of our SaaS products, thereby establishing a pattern of marketing internal-use software and a rebuttable presumption that we intend to market any SaaS products we develop.

Beginning in the fourth quarter of fiscal year 2022, we began to broadly market on-premises versions of certain of our SaaS products, thereby establishing a pattern of marketing internal-use software and a rebuttable presumption that we intend to market any SaaS products we develop.

As a result, our ongoing and future SaaS projects must be accounted for under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, which is discussed below under "Software Development Costs."

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These capitalized costs are included in other assets, non-current on the consolidated balance sheets.

Gross capitalized internal-use software development costs were $ 7.5 million and $ 10.1 million as of January 31, 2023 and 2022, respectively.

Gross capitalized internal-use software development costs were $ 7.5 million as of January 31, 2024 and 2023.

Amortization expense was $ 1.3 million, $ 1.3 million, and $ 1.2 million for fiscal years 2024, 2023, and 2022, respectively.

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These gross capitalized costs were $ 2.7 million and $ 2.2 million as of January 31, 2024 and 2023, respectively, and are recorded in other assets, non-current on our consolidated balance sheets.

Related amortization expense was $ 1.0 million, $ 0.9 million and $ 0.4 million for fiscal years 2023, 2022, and 2021, respectively.

Accumulated amortization was $ 2.2 million and $ 1.2 million as of January 31, 2023 and 2022, respectively.

Related amortization expense was none , $ 1.0 million, and $ 0.9 million for fiscal years 2024, 2023, and 2022, respectively.

Accumulated amortization was $ 2.2 million as of January 31, 2024 and 2023.

Software Development Costs

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Technological feasibility is established when the working model is complete.

Costs incurred subsequent to establishing

Notes to Consolidated Financial Statements

technological feasibility are capitalized until the product is available for general release to customers, at which point they are amortized on a product-by-product basis.

Costs incurred subsequent to establishing technological feasibility are capitalized until the product is available for general release to customers, at which point they are amortized on a product-by-product basis.

Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact their recoverability.

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Capitalized costs are included in other assets, non-current on the consolidated balance sheets.

Gross capitalized software development costs were $ 4.3 million as of both January 31, 2023 and 2022, and amortization expense was $ 0.9 million, $ 0.7 million, and $ 0.5 million for fiscal years 2023, 2022 and 2021, respectively.

Gross capitalized software development costs were $ 4.2 million and $ 4.3 million as of January 31, 2024 and 2023, respectively.

Related amortization expense was $ 0.9 million, $ 0.9 million, and $ 0.7 million for fiscal years 2024, 2023 and 2022, respectively.

Accumulated amortization was $ 3.0 million and $ 2.1 million as of January 31, 2024 and 2023, respectively.

Notes to Consolidated Financial Statements

Capitalized license fees paid to third parties are amortized over the license term at the greater of a straight-line or a consumption basis and are included in cost of licenses revenue or cost of subscription services revenue in the consolidated statements of operations based on the nature of the underlying third-party product.

Capitalized costs are included in other assets, non-current on the consolidated balance sheets.

Gross capitalized license fees were $ 22.4 million and $ 16.3 million as of January 31, 2023 and 2022, respectively, and amortization expense was $ 7.3 million, $ 7.5 million, and $ 4.1 million for fiscal years 2023, 2022 and 2021, respectively.

Accumulated amortization was $ 17.6 million and $ 10.3 million as of January 31, 2023 and 2022, respectively.

Capitalized costs are included in prepaid expenses and other current assets and other assets, non-current on the consolidated balance sheets.

Gross capitalized license fees were $ 4.2 million and $ 22.4 million as of January 31, 2024 and 2023, respectively.

Related amortization expense was $ 8.4 million, $ 7.3 million, and $ 7.5 million for fiscal years 2024, 2023, and 2022, respectively.

Accumulated amortization was none and $ 17.6 million as of January 31, 2024 and 2023, respectively.

We determine if an arrangement contains a lease at inception based on whether there is an identified asset and whether we control the use of the identified asset throughout the period of use.

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Options to renew or terminate the lease are recognized as part of our operating lease ROU assets and operating lease liabilities when it is reasonably certain the options will be exercised.

We do not allocate consideration between lease and non-lease components, such as maintenance costs, as we have elected to not separate lease and non-lease components for any leases within our existing classes of assets.

We have elected to not separate lease and non-lease components for any leases within our existing classes of assets.

Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term.

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Business Acquisitions

Assets acquired and liabilities assumed in a business combination are recorded at their respective fair values at the date of the acquisition.

Determination of the fair value of assets acquired and liabilities assumed relies on

Notes to Consolidated Financial Statements

management judgments and often involves the use of estimates and assumptions, including but not limited to assumptions about future cash inflows and outflows, discount rates, and lives of intangible and other assets.

Assets acquired and liabilities assumed in a business combination are recorded at their respective fair values at the date of the acquisition in accordance with ASC 805, Business Combinations (with the exception of contract assets and contract liabilities, which are measured according to ASC 606, Revenue from Contracts with Customers, discussed under "Revenue Recognition," below).

Determination of the fair value of assets acquired and liabilities assumed relies on management judgments and often involves the use of estimates and assumptions, including but not limited to assumptions about future cash inflows and outflows, discount rates, and lives of intangible and other assets.

Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill.

2 unchanged sentences

Acquisition costs, such as legal and consulting fees, are expensed as incurred.

Goodwill and Intangible Assets

Notes to Consolidated Financial Statements

Goodwill and Acquired Intangible Assets

Goodwill represents the excess of the purchase price in a business acquisition over the fair value of the net assets acquired and is not amortized.

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If the carrying amount of an asset or asset group exceeds the related undiscounted cash flows, it is considered to be impaired and an impairment charge is recognized for the amount by which the carrying value of the asset or asset group exceeds its fair value.

There were no events or changes in circumstances during fiscal years 2023 and 2022 which indicated potential impairment of our long-lived assets.

During fiscal year 2020, we concluded that the carrying values of long-lived assets related to our Houston office, including operating lease ROU assets, leasehold improvements, and furniture and fixtures, exceeded their estimated fair values as the result of a restructuring plan.

There were no events or changes in circumstances during fiscal years 2024, 2023, or 2022 which indicated potential impairment of our long-lived assets.

Revenue Recognition

We derive revenue from the sale of:

(1) software licenses for use of our proprietary software and related maintenance and support;

(1) software licenses for on-premise use of our proprietary software and related maintenance and support;

(2) the right to access certain software products we host (i.e., SaaS);

and (3) professional services.

For certain of our products that are available both on-premise and via SaaS, we sell a single offering that allows customers the choice of either deployment option throughout the term of contract.

For many of our products that are available both on-premise and via SaaS, we sell a single offering that allows customers the choice of either on-premise or SaaS deployment throughout the term of the contract.

These Flex Offerings are comprised of three types of performance obligations:

term license, maintenance and support, and SaaS.

In accordance with ASC 606, Revenue from Contracts with Customers , revenue is recognized when or as a customer obtains control of the promised goods and services.

In accordance with ASC 606, Revenue from Contracts with Customers , revenue is recognized when or as a customer obtains control of the distinct promised goods and services.

The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for those goods or services.

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Determination of the transaction price;

Notes to Consolidated Financial Statements

Allocation of the transaction price to the performance obligations in the contract;

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The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing.

We apply the practical expedient in ASC 606 and do not evaluate payment terms of one year or less for the existence of a significant financing component.

We apply the practical expedient in ASC 606 and do not evaluate payment terms of one year or less for

Notes to Consolidated Financial Statements

the existence of a significant financing component.

Revenue is recorded net of sales tax.

We generally do not offer a right of refund in our contracts.

We primarily sell term licenses (including the term license portion of Flex Offerings), which provide customers the right to use software for a specified period of time.

Our term licenses (typically sold as a portion of Flex Offerings), provide customers the right to use software for a specified period of time.

Revenue for licenses is recognized at the point in time at which the customer is able to use and benefit from the software, which is generally upon delivery to the customer or upon commencement of the renewal term.

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We generate subscription services revenue through the provision of:

(1) maintenance and support, which include technical support and unspecified updates and upgrades on a when-and-if-available basis for our licenses, and (2) SaaS products, including those sold as part of our Flex Offerings.

(1) maintenance and support, which include technical support and unspecified updates and upgrades on a when-and-if-available basis for our licenses, and (2) SaaS products (typically sold as a portion of Flex Offerings).

Maintenance and support represent stand-ready obligations for which revenue is recognized ratably over the term of the arrangements.

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Our SSP reflects the amount we would charge for each performance obligation if it were sold separately in standalone sales to similar customers in similar circumstances in similar geographies.

Notes to Consolidated Financial Statements

Consideration Payable to Customers

From time to time, we enter into arrangements wherein we sell our products and services to a customer or partner while also having made commitments to purchase products or services from that customer or partner or make investments to enable that customer or partner to create or enhance their RPA practice.

From time to time, we enter into arrangements wherein we sell our products and services to a customer or partner while also making commitments to purchase products or services from that customer or partner or make investments to enable that customer or partner to create or enhance their automation practice.

These commitments are treated as consideration payable to a customer, and therefore as a reduction to the transaction price, when it is determined that the payment is not in exchange for a distinct good or service that is priced at fair market value.

If the consideration payable includes a variable amount, we estimate the transaction price, including assessing whether the estimate of variable consideration must be constrained.

We also offer certain rebate incentives to our partners which are treated as consideration payable to a customer and therefore accounted for as a reduction to the transaction price of the related revenue arrangements.

Notes to Consolidated Financial Statements

Modifications

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These costs are recorded as deferred contract acquisition costs on the consolidated balance sheets.

We determine whether costs should be deferred based on the terms of our sales compensation plans and whether the sales commissions are incremental to a customer contract (i.e.

We determine whether costs should be deferred based on the terms of our sales compensation and partner incentive plans and whether the commissions are incremental to a customer contract (i.e.

would not have occurred absent the customer contract).

Under our current sales compensation plan, commissions for renewals of subscription contracts are not commensurate with the commissions paid on the initial contract.

Under our current sales compensation and certain of our partner incentive plans, commissions for renewals of subscription contracts are not commensurate with the commissions paid on the initial contract.

We allocate deferred contract acquisition costs to performance obligations in proportion to the transaction price allocated to each performance obligation and amortize the costs accordingly.

Commissions allocated to licenses and license renewals are expensed at the time the corresponding licenses revenue is recognized.

Commissions allocated to subscription services are capitalized and amortized on a straight-line basis over a period of five years for initial contracts, reflecting our estimate of the expected period that we will benefit from those commissions.

Commissions associated with licenses and license renewals are expensed at the time the corresponding licenses revenue is recognized.

Commissions associated with subscription services are capitalized and amortized on a straight-line basis over a period of five years for initial contracts, reflecting our estimate of the expected period that we will benefit from those commissions.

We determine the period of benefit by taking into consideration the length of our customer contracts, retention rate, the technology lifecycle, and other factors.

Commissions paid on renewal contracts that are allocated to subscription services are capitalized and amortized over the renewal term.

Commissions paid on renewal contracts that are associated with subscription services are capitalized and amortized over the renewal term.

We apply the practical expedient in ASC 340-40, Other Assets and Deferred Costs to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

We periodically review deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

There were no impairment losses recorded for fiscal years 2023, 2022, and 2021.

During fiscal year 2021, sales commissions for renewal of a subscription contract were commensurate with the sales commissions paid for the acquisition of the initial subscription contract because there was minimal to no difference in sales commission rates between new and renewal contracts.

Sales commissions paid upon the initial acquisition of a contract were amortized over the contract term, while sales commissions paid related to renewal contracts were amortized over the renewal term.

The change to the sales compensation plan for fiscal 2022 was accounted for as a change in accounting estimate, of which the impact to fiscal year 2021 was $ 9.2 million, resulting

Notes to Consolidated Financial Statements

from the reversal of accrued sales commission of $ 14.6 million partially offset by the reversal of deferred contract acquisition cost of $ 5.4 million.

There were no impairment losses recorded for fiscal years 2024, 2023, or 2022.

Cost of Revenue

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Subscription Services

Cost of subscription services revenue primarily consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.

Cost of subscription services revenue also includes third-party consulting services, hosting costs related to our SaaS products, amortization of acquired developed technology and capitalized development costs related to SaaS products, and allocated overhead.

Cost of subscription services revenue consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.

Notes to Consolidated Financial Statements

related to SaaS products, and allocated overhead.

Overhead is allocated to cost of subscription services revenue based on applicable headcount.

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Cost of professional services and other revenue primarily consists of personnel-related expenses of our professional services team, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.

Cost of professional services and other revenue also includes third-party consulting services and allocated overhead.

Cost of professional services and other revenue also includes subcontracted third-party services and allocated overhead.

We recognize these expenses as they are incurred.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing employees and related sales support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs, sales and partner commissions, marketing events, advertising costs, travel, trade shows, other marketing materials, and allocated overhead.

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing employees and related sales support teams, including salaries and bonuses, stock-based compensation expense, employee benefit costs, sales and partner commissions, marketing events, advertising costs, travel, trade shows, other marketing materials, and allocated overhead.

Advertising costs are expensed as incurred and are included in sales and marketing expenses.

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The fair value of each stock option is determined using the Black-Scholes pricing model.

The fair value of each RSU and RSA is determined based on the fair value of our Class A common stock on the grant date.

The fair value of RSUs and RSA s is determined based on the fair value of our Class A common stock on the grant date.

The fair value of PSUs that are dependent on the satisfaction of a performant condition is also determined based on the fair value of our Class A common stock on the grant date.

The fair value of ESPP awards is determined using the Black-Scholes pricing model.

Notes to Consolidated Financial Statements

Stock-based compensation expense is included in cost of revenue and operating expenses within our consolidated statements of operations based on the expense classification of the individual earning the award.

The fair value of awards with only service-based vesting conditions is recognized as expense over the requisite service period on a straight-line basis.

The fair value of awards that contain both service-based and performance-based vesting conditions, such as RSUs that were granted under the 2018 Plan before our IPO, are expensed using the accelerated attribution method once it is probable that the performance condition will be met.

The fair value of ESPP awards is recognized over the relevant offering period on a straight-line basis.

We account for forfeitures as they occur.

Pursuant to ASC 740, Income Taxes , we account for our income taxes using the asset and liability method, whereby DTAs and DTLs are recognized based on temporary differences between the bases used for financial reporting and income tax reporting purposes.

For PSUs dependent on the satisfaction of a performance condition, compensation expense is recognized only when management believes it is probable that the performance condition will be achieved.

Although total compensation expense recognized for these awards will ultimately equal the grant date fair value per share multiplied by the number of shares earned by the holder, changes in management's expectations can cause fluctuations in timing of expense over the life of these awards.

The fair value of ESPP shares is recognized over the relevant offering period on a straight-line basis.

Notes to Consolidated Financial Statements

With all award types, we account for forfeitures as they occur.

Pursuant to ASC 740, Income Taxes , we account for income taxes using the asset and liability method, whereby DTAs and DTLs are recognized based on temporary differences between the bases used for financial reporting and income tax reporting purposes.

Deferred income taxes are provided based on the enacted tax rates and laws that will be in effect at the time such temporary differences are expected to reverse.

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All potentially dilutive common stock equivalents were anti-dilutive in fiscal years 2024, 2023, and 2022, as we were in a net loss position for these periods.

Geographic Information

Entity-Wide Information

We operate as one segment.

In May 2022, we adopted a Co-CEO model.

Our Co-CEOs act together as our chief operating decision makers, and allocate resources and assess performance based upon financial information at the consolidated level.

From May 2022 through the end of fiscal year 2024, we operated under a Co-CEO model, with our Co-CEOs acting together as our chief operating decision maker, and allocating resources and assessing performance based upon financial information at the consolidated level.

Notes to Consolidated Financial Statements

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Total long-lived assets $ 372,846 $ 386,357

(1) Prior period amounts have been expanded to conform to current period presentation

Variable Interest Entity

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If we are not the primary beneficiary of a VIE, we account for the investment or other variable interests in that VIE in accordance with the applicable accounting guidance.

During the third quarter of fiscal 2022, we entered into an agreement whereby we have acquired a variable interest in a special purpose LLC owned by our Co-CEO Daniel Dines, that owns a specific aircraft.

This arrangement allows us to use the aircraft, when available, for business purposes in the course of our normal operations at rates that approximate the cost of operating the aircraft but that do not exceed current market rates.

We determined at the inception of this agreement that the LLC is a VIE.

Our variable interest is limited to sharing cost savings;

we do not have any obligation to fund losses of the LLC, do not have a minimum commitment related to our use of the aircraft, have not guaranteed the LLC's debt, and do not have any other involvement with the LLC.

We have determined that the governance structure of the LLC does not allow us to direct the activities that would significantly impact its economic performance, such as approving terms or pricing associated with the chartering of the aircraft or participating in decision-making related to financing.

As such, we are not the primary beneficiary of the LLC and accordingly do not consolidate it in our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , to amend previous accounting guidance that required the measurement of all expected losses to be based on historical experience, current conditions, and reasonable and supportable forecasts.

For trade receivables, contract assets, and other financial instruments, the new guidance requires us to use a forward-looking expected loss model that reflects probable losses, rather than the incurred loss model, for recognizing credit losses.

We adopted ASU No.

2016-13 and all subsequent amendments on a modified retrospective basis on February 1, 2022, and the adoption did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

2023-07 is intended to improve reportable segments disclosures requirements, primarily through enhanced disclosures about significant segment expenses.

2023-07 will be effective for us for annual periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact of this pronouncement on our consolidated financial statements.

In December 2023, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes.

2019-12 removes certain exceptions associated with (1) intraperiod tax allocations, (2) recognition of DTLs for equity method investments of foreign subsidiaries, and (3) the calculation of income taxes in an interim period when in a loss position within the framework of ASC 740.

2019-12 also clarifies and amends existing guidance to encourage consistent application.

We adopted the applicable provisions of ASU No.

Notes to Consolidated Financial Statements

modified retrospective basis on February 1, 2022, and the adoption did not have a material impact on our consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , to amend the current accounting guidance in ASC 805 to require entities to apply ASC 606 to recognize and measure contract assets and contract liabilities acquired in a business combination.

We early adopted ASU No.

2021-08 on a prospective basis on February 1, 2022, and the adoption did not have a material impact on our consolidated financial statements.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

2023-09 will require additional tax disclosures, predominantly related to the effective income tax rate reconciliation and income taxes paid.

2023-09 will be effective for us for annual periods beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact of this pronouncement on our consolidated financial statements.

3 Revenue Recognition

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Total revenue $ 1,308,072 100 % $ 1,058,581 100 % $ 892,252 100 %

Notes to Consolidated Financial Statements

(1) Revenue from the U.S.

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Total contract assets $ 90,411 $ 75,783

Notes to Consolidated Financial Statements

Year Ended January 31,

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We expect to recognize 61 % of our remaining performance obligations as revenue in the next twelve months , and the remainder thereafter.

Notes to Consolidated Financial Statements

Deferred Contract Acquisition Costs

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Total deferred contract acquisition costs $ 228,995 $ 187,503

Notes to Consolidated Financial Statements

4 Marketable Securities

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Losses Estimated

Commercial paper $ 62,470 $ — $ — $ 62,470

Treasury bills (1)

234,848 — ( 308 ) 234,540

Treasury bills and U.S government securities 641,263 29 ( 100 ) 641,192

Corporate bonds 1,993 — ( 2 ) 1,991

Municipal bonds 6,374 — ( 66 ) 6,308

Agency bonds 174,990 — ( 28 ) 174,962

Total marketable securities $ 818,246 $ 29 $ ( 130 ) $ 818,145

(1) Treasury bills with both amortized cost and estimated fair value of $ 10.0 million are included in cash and cash equivalents due to their original maturity of three months or less.

As of January 31, 2023

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Commercial paper $ 62,470 $ — $ — $ 62,470

Treasury bills and U.S government securities (1)

$ 234,848 $ — $ ( 308 ) $ 234,540

Corporate bonds 46,684 — ( 198 ) 46,486

Municipal bonds 6,374 — ( 66 ) 6,308

Agency bonds 7,959 — ( 47 ) 7,912

Total marketable securities $ 358,335 $ — $ ( 619 ) $ 357,716

As of January 31, 2023 and 2022, $ 2.9 million and $ 19.5 million, respectively, of our marketable securities had remaining contractual maturities of one year or more, and the remainder had contractual maturities of less than one year.

As of January 31, 2023 and 2022, $ 3.5 million and zero , respectively, of interest receivable was included in prepaid expenses and other current assets on the consolidated balance sheets.

The Company did not recognize an allowance for credit losses against interest receivable as of January 31, 2023.

(1) Treasury bills with both amortized cost and estimated fair value of $ 10.0 million are included in cash and cash equivalents due to their original maturity of three months or less.

As of January 31, 2024 and 2023, none and $ 2.9 million, respectively, of our marketable securities had remaining contractual maturities of one year or more.

As of January 31, 2024 and 2023, $ 3.3 million and $ 3.5 million, respectively, of interest receivable was included in prepaid expenses and other current assets on the consolidated balance sheets.

We did not recognize an allowance for credit losses against interest receivable as of January 31, 2024 or 2023.

Unrealized losses during the period are a result of changes in market conditions.

We do not believe that any unrealized losses are attributable to credit-related factors based on our evaluation of available evidence.

To determine whether a decline in value is related to credit loss, we evaluate, among other factors:

the extent to which the fair value is less than the amortized cost basis and any adverse conditions specifically related to an issuer of a security or its industry.

To determine whether a decline in value is related to credit loss, we evaluate, among other factors, the extent to which

Notes to Consolidated Financial Statements

the fair value is less than the amortized cost basis and any adverse conditions specifically related to an issuer of a security or its industry.

5 Fair Value Measurement

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2023 and 2022 (in thousands):

The following tables present our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

As of January 31, 2024

Level 1 Level 2 Level 3 Total

Level 1 Level 2 Total

Financial Assets:

Money market funds $ 509,053 $ — $ 509,053

Treasury bills 9,968 — — 9,968

Total cash equivalents 509,053 — 509,053

Commercial paper — 62,470 — 62,470

Treasury bills 234,540 — — 234,540

Treasury bills & U.S.

government securities 641,192 — 641,192

Corporate bonds — 1,991 1,991

Municipal bonds — 6,308 — 6,308

Agency bonds 174,962 — 174,962

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As of January 31, 2023

Level 1 Level 2 Level 3 Total

Level 1 Level 2 Total

Financial Assets:

Money market funds $ 319,801 $ — $ 319,801

Treasury bills 9,968 — 9,968

Total cash equivalents 329,769 — 329,769

Commercial paper — 62,470 62,470

Treasury bills and U.S.

government securities 234,540 — 234,540

Corporate bonds — 46,486 46,486

Municipal bonds — 6,308 6,308

Agency bonds 7,912 — 7,912

Total marketable securities 242,452 115,264 357,716

Total $ 572,221 $ 115,264 $ 687,485

Our money market funds, treasury bills and agency bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

Our money market funds, treasury bills and U.S.

government securities, and agency bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

We classify commercial paper, corporate bonds, and municipal bonds as Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.

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6 Business Acquisitions

Fiscal Year 2023 Acquisitions

Fiscal Year 2023 Acquisition

On July 29, 2022, we acquired all of the outstanding capital stock of Re:infer, a natural language processing company focused on unstructured documents and communications.

Re:infer uses machine learning technology to mine context from communication messages and transform them into actionable data.

With this acquisition, we gained technology and an experienced team which we believe will accelerate our technology roadmap, expand the breadth of our current AI-powered automation capabilities, and unlock new automation opportunities for our customers.

With this acquisition, we gained technology and an experienced team which we believe will continue to accelerate our technology roadmap, expand the breadth of our AI-powered automation capabilities, and unlock new automation opportunities for our customers.

The Re:infer acquisition was accounted for as a business combination.

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Fair value of Class A common stock issued at closing ( 0.2 million shares)

Loan note to be paid on first anniversary of closing (included in accrued expenses and other current liabilities) 5,863

Loan note to be paid on second anniversary of closing (included in other liabilities, non-current) 5,570

Loan note paid on first anniversary of closing (July 29, 2023) 5,863

Loan note to be paid on second anniversary of closing (included in accrued expenses and other current liabilities as of January 31, 2024)

Working capital adjustment 66

Total $ 44,581

At closing, we also issued an additional 0.4 million shares of Class A common stock that will be released to sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to certain employment-related clawback provisions.

The aggregate fair value of these shares totaled $ 7.6 million and will be expensed as compensation for post-acquisition services over the three years following the acquisition date.

At closing, we also issued an additional 0.4 million shares of Class A common stock to be released to sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to certain employment-related clawback provisions.

The aggregate fair value of these shares totaled $ 7.6 million and is expensed as compensation for post-acquisition services over the three years following the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

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None of this goodwill is deductible for tax purposes.

During fiscal year 2023, we incurred transaction costs in connection with the Re:infer acquisition of $ 1.1 million, which are included in general and administrative expenses in the consolidated statements of operations.

Fiscal Year 2022 Acquisitions

Cloud Elements

On March 19, 2021, we acquired all of the outstanding capital stock of Cloud Elements , the provider of an API integration platform for SaaS application providers and the digital enterprise.

The acquisition of Cloud Elements brought technology and an experienced team which we believe accelerates our technology roadmap in areas such as native integrations and system event automation triggers.

The Cloud Elements acquisition was accounted for as a business combination.

We incurred transaction costs in connection with the Re:infer acquisition of $ 1.1 million, which were included in general and administrative expenses in the consolidated statement of operations for fiscal year 2023.

Notes to Consolidated Financial Statements

The total purchase consideration for the acquisition of Cloud Elements was $ 36.1 million, which consisted of the following (in thousands):

Fair value of common stock 30,467

Total $ 36,127

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

March 19, 2021

Accounts receivable 743

Other assets 1,996

Intangible assets 11,200

Goodwill 27,686

Total assets acquired 41,787

Total liabilities assumed ( 5,660 )

Total $ 36,127

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

(in thousands) Estimated Useful Life

Developed technology $ 6,600 5.0

Customer relationships 4,500 3.0

Trade name 100 3.0

Total $ 11,200

The acquisition of Cloud Elements generated $ 27.7 million in goodwill due to the synergies expected and the skilled workforce acquired.

None of this goodwill is deductible for tax purposes.

We incurred transaction costs in connection with the Cloud Elements acquisition of $ 1.1 million.

Of these transaction costs, $ 0.9 million was included in general and administrative expenses in the consolidated statement of operations for fiscal year 2022 , and the remainder was recognized in fiscal year 2021.

7 Intangible Assets and Goodwill

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Total $ 38,576 $ ( 23,872 ) $ 14,704

Notes to Consolidated Financial Statements

Intangible assets, net consisted of the following as of January 31, 2023 (dollars in thousands):

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We record amortization expense associated with acquired developed technology in cost of licenses revenue and cost of subscription services revenue, trade names and trademarks in sales and marketing expense, customer relationships in sales and marketing expense, and other intangibles in general and administrative expense in the consolidated statements of operations.

Amortization expense of intangible assets was $ 6.9 million , $ 5.1 million and $ 2.6 million for fiscal years 2023, 2022, and 2021, respectively.

The expected future amortization expense related to intangible assets as of January 31, 2023 was as follows (in thousands):

Amortization of acquired intangible assets was $ 8.6 million , $ 6.9 million and $ 5.1 million for fiscal years 2024, 2023, and 2022, respectively.

Expected future amortization expense related to intangible assets was as follows as of January 31, 2024 (in thousands):

Year Ended January 31,

1 unchanged sentence

Total $ 14,704

Notes to Consolidated Financial Statements

Changes in the carrying amount of goodwill were as follows during the periods presented (in thousands):

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Balance as of January 31, 2022

Acquisition of Cloud Elements 27,686

Acquisition of Re:infer 34,351

Effect of foreign currency translation 95

Balance as of January 31, 2023

Acquisition of Re:infer 34,351

Effect of foreign currency translation 1,016

4 unchanged sentences

Our operating lease arrangements do not contain any material restrictive covenants or residual value guarantees.

Notes to Consolidated Financial Statements

Lease costs are presented below (in thousands):

11 unchanged sentences

Operating lease right-of-use assets $ 56,072 $ 52,052

Accrued expenses and other current liabilities $ 6,997 $ 1,552

Operating lease liabilities, current (included in accrued expenses and other current liabilities)

$ 8,357 $ 6,997

Operating lease liabilities, non-current 58,713 56,442

Total operating lease liabilities $ 67,070 $ 63,439

Supplemental cash flow information related to operating leases was as follows for the periods presented (in thousands):

Notes to Consolidated Financial Statements

Supplemental cash flow information related to operating leases is as follows for the periods presented (in thousands):

Year Ended January 31,

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The following table represents the weighted-average remaining lease term and discount rate for the periods presented:

Year Ended January 31,

As of January 31,

Weighted-average remaining lease term (years) 10.7 12.1

Weighted-average discount rate 7.1 % 7.0 %

Notes to Consolidated Financial Statements

Future undiscounted lease payments for our operating lease liabilities as of January 31, 2024 were as follows (in thousands):

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Prepaid expenses and other current assets $ 104,980 $ 94,150

(1) Prior period amounts have been combined to conform to current presentation

Notes to Consolidated Financial Statements

Property and Equipment, Net

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Depreciation expense was $ 11.1 million , $ 8.6 million, and $ 6.8 million for fiscal years 2024, 2023, and 2022, respectively.

Notes to Consolidated Financial Statements

Accrued Expenses and Other Current Liabilities

9 unchanged sentences

Deferred consideration for business acquisition, current 5,570 5,863

Rebates payable to partners 7,289 —

Other 19,920 14,462

1 unchanged sentence

10 Credit Facility

On October 30, 2020, we entered into the Credit Facility with HSBC Ventures USA Inc., Silicon Valley Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, LTD.

The Credit Facility replaced the two-year $ 100.0 million senior secured revolving credit agreement described in the Final Prospectus, which was repaid in full in July 2020.

Substantive changes from that agreement include a credit limit of $ 200.0 million, an extension of maturity to October 30, 2023 and the removal of certain financial covenants.

The Credit Facility contains certain customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions.

We may use the proceeds of future borrowings under the Credit Facility for refinancing other indebtedness, working capital, capital expenditures and other general corporate purposes, including permitted business acquisitions.

Our obligations under the Credit Facility are secured by substantially all of our assets, except for our intellectual property.

Borrowings under the Credit Facility bear interest at a base rate, as defined in the Credit Facility, plus a margin of 2.0 % or 3.0 % depending on the base rate.

The Credit Facility is subject to customary fees for loan facilities of this type, including ongoing commitment fees at a rate of 0.25 % per annum on the daily amount available to be drawn.

As of January 31, 2023 and 2022, there were no amounts outstanding under the Credit Facility.

On October 30, 2020 we entered into the Credit Facility, a $ 200 million senior secured revolving credit facility with a maturity date of October 30, 2023, with HSBC Ventures USA Inc., Silicon Valley Bank, a division of First Citizens Bank & Trust Company (successor by purchase to the FDIC as receiver for Silicon Valley Bridge Bank, N.A.

(as successor to Silicon Valley Bank)), Sumitomo Mitsui Banking Corporation, and Mizuho Bank, LTD.

The Credit Facility contained certain customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions.

We did not borrow under the Credit Facility at any time.

In September 2023, we and the lenders terminated the Credit Facility prior to its original maturity date.

Notes to Consolidated Financial Statements

11 Commitments and Contingencies

Letters of Credit

We had a total of $ 4.3 million and $ 5.3 million in letters of credit outstanding in favor of certain landlords for office space and for credit line facilities as of January 31, 2023 and 2022, respectively.

We had a total of $ 2.6 million and $ 4.3 million in letters of credit outstanding predominantly in favor of certain landlords for office space as of January 31, 2024 and 2023, respectively.

These letters of credit renew annually and expire on various dates through fiscal year 2025.

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

Notes to Consolidated Financial Statements

These indemnification provisions may survive termination of the underlying agreement and the potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses.

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On November 10, 2022, our board of directors approved further restructuring actions to reduce our global workforce across functions by an additional 6 %.

We substantially completed these actions and recognized related restructuring costs, consisting predominantly of employee termination benefits and contractual changes, during fiscal year 2023, with any remaining activities expected to be completed by the second quarter of fiscal year 2024.

We incurred $ 23.4 million of exp ense related to our restructuring actions for fiscal year 2023, of which $ 22.3 million relates to employee termination benefits and the remainder relates to lease abandonment costs.

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

We incurred $ 2.6 million and $ 23.4 million of expense related to our restructuring actions in fiscal years 2024 and 2023, respectively.

Our workforce restructuring actions were completed during the second quarter of fiscal year 2024.

The following table shows the total amount incurred during fiscal years 2024 and 2023, and the related liability, which is recorded in accrued compensation and employee benefits in the consolidated balance sheets, for restructuring-related costs (in thousands):

Accrued restructuring costs as of January 31, 2022

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Accrued restructuring costs as of January 31, 2023

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

Employee Termination Benefits Lease Exit Costs Total Restructuring Costs

Restructuring costs incurred during fiscal year 2024

Amount paid during fiscal year 2024

Accrued restructuring costs as of January 31, 2024

Notes to Consolidated Financial Statements

The following table presents the restructuring charges incurred (in thousands):

Year Ended January 31,

Employee Termination Benefits Lease Exit Costs Total Restructuring Costs Employee Termination Benefits Lease Exit Costs Total Restructuring Costs

Cost of subscription services revenue $ 114 $ — $ 114 $ 76 $ 106 $ 182

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We sponsor retirement plans for qualifying employees, including a 401(k) plan in the U.S.

and defined contribution plans in certain other countries, to which we make matching contributions.

a nd defined contribution plans in certain other countries, to which we make matching contributions.

Our total matching contributions to all defined contribution plans during fiscal years 2024, 2023, and 2022 were $ 16.0 million , $ 14.5 million, and $ 10.4 million, respectively.

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In accordance with ASC 4 50, Contingencies , we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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

UiPath and certain of its officers are currently parties to the following litigation matters:

On September 6, 2023, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York against UiPath, then Co-CEO Daniel Dines, and CFO Ashim Gupta, captioned In re UiPath, Inc.

Securities Litigation (the Securities Action ) .

The lawsuit asserts claims under Sections 10(b) and 20(a) of the Exchange Act, and alleges that defendants made material misstatements and omissions, including regarding UiPath’s competitive position and its financial results.

On January 26, 2024, the lead plaintiff in the Securities Action filed an amended complaint.

On March 26, 2024, the plaintiffs filed a further amended complaint, which alleges Securities Acts claims under Sections 11 and 15 as well as Exchange Act claims under Section 10(b), Rule 10b-5, and Section 20(a).

In support of the Securities Act claims, the plaintiff alleges material misstatements and omissions in UiPath’s April 2021 Registration Statement, including regarding UiPath’s competitive position and its financial results.

The operative complaint is purportedly brought on behalf of a putative class of persons who purchased or otherwise acquired UiPath common stock between April 21, 2021 and September 27, 2022.

It seeks unspecified monetary damages, costs and attorneys’ fees, and other unspecified relief as the Court deems appropriate.

On November 30, 2023, a purported shareholder derivative lawsuit was filed in the United States District Court for the Eastern District of New York against UiPath, as nominal defendant, and then Co-CEO Daniel Dines, CFO Ashim Gupta, and several of UiPath’s current and former directors.

The case is captioned Polilingua Limited v.

Daniel Dines, et al .

The lawsuit alleges that the individual defendants breached their fiduciary duties and committed other alleged misconduct in connection with the statements at issue in the Securities Action and by causing UiPath to repurchase shares at allegedly inflated prices.

The plaintiff seeks unspecified damages and/or restitution on behalf of UiPath, as well as costs and attorneys’ fees and certain changes to UiPath’s corporate governance and internal controls.

Similar cases were filed in the District of Delaware and in the Southern District of New York (together with Polilingua Limited v.

Daniel Dines, et al, the Derivative Litigations ).

The Derivative Litigations are at an early stage;

in each case the matter has been stayed, pending the outcome of the Court's decision on the defendants' anticipated motion to dismiss the Securities Action.

Notes to Consolidated Financial Statements

financial condition.

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

We have not recorded any accrual related to the aforementioned litigation matters as of January 31, 2024, as we believe a loss in these matters is neither probable nor estimable at this time.

We warrant to customers that our platform will operate substantially in accordance with its specifications.

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As such, no accruals for product warranty costs have been made.

Other Matters

Our indirect tax positions are subject to audit in multiple jurisdictions globally.

Our Romanian subsidiary is currently undergoing final audit procedures related to value-added tax for the period from January 2020 through January 2022.

We have not recorded any accrual related to this audit as of January 31, 2024 as it is not probable that a loss has been incurred.

Non-Cancelable Purchase Obligations

In the normal course of business, we enter into non-cancelable purchase commitments with various parties, mainly for hosting services and software products and services.

During fiscal year 2023, we made commitments to purchase $ 138.1 million of cloud infrastructure services from a third-party vendor and $ 82.5 million of service credits toward products and services from strategic alliance partners, which together constitute the majority of the increase in our non-cancelable purchase commitments during the fiscal year.

As of January 31, 2024, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer as follows (in thousands):

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Total $ 171,115

12 Convertible Preferred Stock and Stockholders' Equity (Deficit)

Convertible Preferred Stock

No convertible preferred stock was outstanding as of January 31, 2023 and 2022.

Convertible preferred stock consisted of the following as of January 31, 2021 (in thousands except per share amounts):

Preferred Stock Shares

Authorized Shares

Outstanding Original Issue

per Share Carrying Value

Net of Issuance

Costs Aggregate

A-1 96,825 96,825 $ 0.31 $ 29,523 $ 29,633

A-2 48,000 48,000 $ 0.03 1,600 1,600

B-1 43,734 43,734 $ 2.70 117,592 118,000

B-2 12,972 12,972 $ 2.70 34,880 35,000

C-1 19,626 19,626 $ 6.38 124,969 125,200

C-2 16,459 16,459 $ 6.38 104,816 105,000

D-1 34,504 34,504 $ 13.12 452,140 452,600

D-2 9,987 9,987 $ 13.12 130,869 131,000

E 15,866 12,150 $ 18.59 225,579 225,903

Total 297,973 294,257 $ 1,221,968 $ 1,223,936

Notes to Consolidated Financial Statements

In February 2021, we issued to certain investors approximately 12.0 million shares of Series F convertible preferred stock at a purchase price of $ 62.28 per share, for an aggregate purchase price of $ 750.0 million.

The principle rights, privileges, and preferences of our convertible preferred stock were as follows:

The holder of each share of convertible preferred stock was entitled to the number of votes equal to the number of shares of convertible preferred stock held by such holder as of the record date for determining stockholders entitled to vote.

As of January 31, 2021 , the holders of the shares of Series A-1 and A-2 convertible preferred stock were entitled to elect two directors, the holders of the shares of Series B-1 and B-2 convertible preferred stock were entitled to elect one director, the holders of the shares of common stock were entitled to elect two directors, and the holders of the shares of common stock and convertible preferred stock, voting together as a single class, were entitled to elect the remaining number of directors.

Redemption and Liquidation

Holders of our convertible preferred stock did not have any date-specific redemption rights.

However, certain redemption provisions did apply following certain deemed liquidation events, which are considered contingent redemption provisions that are not solely within our control.

Accordingly, the convertible preferred stock was presented outside of permanent equity in the mezzanine section of the consolidated balance sheets as of January 31, 2021.

Each share of convertible preferred stock was convertible at the option of the holder without payment of additional consideration at any time into Class A common stock at the relevant Conversion Rate for the series.

The initial conversion price per share for each series of convertible preferred stock was equal to the original issue price for such series (i.e., 1 :1 conversion).

Each share of convertible preferred stock was to automatically convert into shares of Class A common stock at the then applicable Conversion Rate upon the earlier to occur of (a) our sale of Class A common stock in an IPO, the price of which is at least equal to the original issue price per share for the Series D convertible preferred stock, and that results in at least $ 75 million of proceeds in the aggregate (net of underwriting discounts and commissions) (a “Qualified Public Offering”), ( b) the date specified by vote or written consent of the preferred majority, or (c) the business day immediately prior to the first trading day with respect to our initial listing of Class A common stock for trading on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved by our board of directors.

Pursuant to the above, immediately prior to the completion of our IPO , all convertible preferred stock outstanding, totaling approximately 306.3 million shares, was automatically converted into an equivalent number of shares of Class A common stock on a one -to-one basis and their carrying value of $ 1,971.8 million was reclassified to stockholders’ equity.

Preferred Stock

In April 2021, we amended and restated our certificate of incorporation, which authorized 20.0 million shares of preferred stock.

12 Stockholders' Equity

In April 2021, we amended and restated our certificate of incorporation, which authorized a total of 2.0 billion shares of Class A common stock and 115.7 million shares of Class B common stock.

Each share of Class B common stock will convert automatically into Class A common stock, on a one -to-one basis, upon certain circumstances, including:

(1) the sale or transfer of such share of Class B common stock (except under certain circumstances described in the amended and restated certificate of incorporation), (2) a date fixed by the board of directors that is no less than 120 days and no more than 180 days following the date that the number of shares of Class B common stock outstanding is less than 20 % of the number of shares of Class B

Class A common stock is entitled to one vote per share and Class B common stock is entitled to thirty-five votes per share.

Stock Repurchase Program

On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we may repurchase from time to time up to $ 500.0 million of our outstanding shares of Class A common stock.

Repurchases under the program may be effected through open market purchases, privately-negotiated transactions, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act.

The timing and actual number of shares repurchased will

Notes to Consolidated Financial Statements

common stock outstanding immediately prior to the completion of the IPO, or (3) six months after the death or incapacity of Daniel Dines.

The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to thirty-five votes per share.

At IPO, we reserved 2.8 million shares of our Class A common stock to fund our social impact and environmental, social, and governance initiatives.

During fiscal year 2023 , we contributed 0.3 million shares of our Class A common stock to a donor-advised fund in connection with our Pledge 1% commitment.

The aggregate fair value of the shares on the contribution date of $ 5.5 million was recorded within general and administrative expense in the consolidated statements of operations.

Secondary Transactions

During fiscal year 2021, certain of our employees sold shares of our Class A and Class B common stock to new and existing investors.

We recognized $ 5.0 million in stock-based compensation expense as a result of these transactions related to the excess of the selling price per share paid to the applicable employees over the then-assessed fair market value of the purchased shares.

Shares of Class B common stock sold in such secondary transactions each converted into one share of our Class A common stock at closing.

depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital.

This authorization expires on March 1, 2025, subject to modification by the board of directors in the future.

From the inception of the share repurchase program through January 31, 2024, we have repurchased 5.8 million shares of our Class A common stock at an average price of $ 17.57 per share (inclusive of brokerage commission).

Subsequent to January 31, 2024, between February 1, 2024 and March 12, 2024, we repurchased an additional 0.9 million shares of our Class A common stock at an average price of $ 23.46 per share.

Charitable Donations of Class A Common Stock

We have reserved 2.8 million shares of our Class A common stock to fund our social impact and ESG initiatives.

We contributed 0.3 million shares of our Class A common stock during fiscal year 2024 and 0.3 million of our Class A common stock during fiscal year 2023 to a donor-advised fund in connection with our Pledge 1% commitment.

The aggregate fair values of the shares on the respective contribution dates of $ 4.2 million and $ 5.5 million were recorded within general and administrative expense in the consolidated statements of operations for fiscal years 2024 and 2023, respectively.

Preferred Stock

In April 2021, we amended and restated our certificate of incorporation, which authorized a total of 20.0 million shares of preferred stock.

Holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the priority rights of holders of preferred stock.

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Changes in the components of accumulated other comprehensive income (loss) were as follows during the periods presented (in thousands):

Foreign Currency Translation Adjustments Unrealized Loss on Marketable Securities Accumulated Other Comprehensive Income (Loss)

Balance as of January 31, 2021 $ ( 12,504 ) $ ( 17 ) $ ( 12,521 )

Other comprehensive income (loss), net of tax 23,738 ( 318 ) 23,420

Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Marketable Securities

Accumulated Other Comprehensive Income (Loss)

Balance as of January 31, 2022 $ 11,234 $ ( 335 ) $ 10,899

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Balance as of January 31, 2023 $ 8,231 $ ( 619 ) $ 7,612

Other comprehensive income, net of tax

694 519 1,213

Balance as of January 31, 2024 $ 8,925 $ ( 100 ) $ 8,825

13 Equity Incentive Plans and Stock-Based Compensation

2021 Stock Plan

In April 2021, prior to and in connection with the IPO , we adopted the 2021 P lan , which provides for grants of incentive stock options, nonstatutory stock options, stock appreciation rights, RSAs , RSUs , performance awards, and other forms of awards.

In April 2021, prior to and in connection with the IPO, we adopted the 2021 Plan , which provides for grants of incentive stock options, nonstatutory stock options, stock appreciation rights, RSAs, RSUs, PSUs, and other forms of awards.

As of January 31, 2024, w e have reserved 173.7 million shares of our Class A common stock to be issued under the 2021 Plan.

In addition, the number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on February 1 of each year for a period of 10 years, beginning on February 1, 2022 and continuing through February 1, 2031, in an amount equal to (1) 5 % of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31, or (2) a lesser number of shares determined by our board of directors no later than the February 1 increase.

The number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on February 1 of each year for a period of ten years , which began on February 1, 2022 and continues through February 1, 2031, in an amount equal to (1) 5 % of the total number of shares of our

Notes to Consolidated Financial Statements

common stock (both Class A and Class B) outstanding on the preceding January 31, or (2) a lesser number of shares determined by our board of directors no later than the February 1 increase.

2021 Employee Stock Purchase Plan

In April 2021, prior to and in connection with the IPO, we adopted the ESPP.

As of January 31, 2023, t he ESPP authorizes the issuance of 15.9 million shares of our Class A common stock under purchase rights granted to our employees or to employees of any of our designated affiliates.

The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each year for a period of 10 years, beginning on February 1, 2022 and continuing through February 1, 2031, by the lesser of (1) 1 % of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31;

and (2) 15.5 million shares, except before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth by (1) and (2) above.

The plan allows participants to purchase shares at the lesser of (a) 85 % of the fair market value our Class A common stock as of the commencement of the offering period, and (b) 85 % of the fair market value of our Class A common stock on the corresponding purchase date.

As of January 31, 2024, t he ESPP authorizes the issuance of 21.5 million shares of our Class A common stock under purchase rights granted to our employees.

The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each year for a period of 10 years, which began on February 1, 2022 and continues through February 1, 2031, by the lesser of (1) 1 % of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31;

and (2) 15.5 million shares, except that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth by (1) and (2) above.

The ESPP allows participants to purchase shares at the lesser of (a) 85 % of the fair market value our Class A common stock as of the commencement of the offering period, and (b) 85 % of the fair market value of our Class A common stock on the corresponding purchase date.

Prior Stock Plans

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Stock Options

Stock options generally vest over four years and expire ten years from the date of grant.

Stock options generally vest over three to four years and expire ten years from the date of grant.

Vested stock options generally expire three months after termination of employment.

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Remaining Contractual

Life (Years) Aggregate Intrinsic

Aggregate Intrinsic

Value (in thousands)

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Notes to Consolidated Financial Statements

Fair value of each stock option grant was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions:

Fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

Year Ended January 31,

2024 2023 2022

Weighted-Average Weighted-Average Range

Expected term (years) 5.9 5.9 6.1

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During fiscal years 2023 and 2022, our compensation committee approved modifications to allow acceleration of the service-based vesting condition of certain employee stock options upon termination.

These modifications, which were considered improbable-to-probable (Type 3) modifications under ASC 718, resulted in accelerated vesting of 0.3 million, 0.2 million and 0.3 million shares of Class A common stock subject to outstanding stock options, and incremental compensation expense of $ 2.8 million, $ 2.9 million, and $ 4.6 million was recognized during fiscal years 2023, 2022, and 2021, respectively.

In July 2020, we repriced 4.6 million stock options which had been issued in fiscal years 2021 and 2020 after the Series D convertible preferred stock financing closing date.

In conjunction with the modification of these stock options, we recognized incremental compensation expense of approximately $ 1.6 million.

Expense related to vested shares of $ 0.9 million was expensed on the repricing date and the remaining amount of $ 0.7 million related to unvested shares was amortized over the remaining vesting period of such options.

These modifications, which were considered improbable-to-probable (Type 3) modifications under ASC 718, resulted in accelerated vesting of 0.3 million and 0.2 million shares, respectively, of Class A common stock subject to outstanding stock options, and incremental compensation expense of $ 2.8 million and $ 2.9 million was recognized during fiscal years 2023 and 2022, respectively.

Early Exercised Options

Certain stock option holders have the right to exercise unvested options, subject to a repurchase right held by us at the original exercise price in the event of voluntary or involuntary termination of employment of the option holders, until the options are fully vested.

During fiscal year 2024, we did not repurchase any unvested early exercised options.

During fiscal year 2023, we repurchased $ 0.4 million unvested early exercised options in the amount of $ 1.5 million.

Cash proceeds associated with early exercises are recorded within accrued expenses and other current liabilities and other liabilities, non-current in our consolidated balance sheets, depending on the future vesting dates of the associated options.

Such accrued amounts were not material and $ 2.8 million as of January 31, 2023 and 2022, respectively.

Such accrued amounts were not material as of January 31, 2024 and 2023.

Proceeds are transferred to additional paid-in capital at the time of option vesting.

Restricted Stock Units

RSUs granted under th e 2021 Plan g enerally vest over four years .

RSUs granted under th e 2021 Plan g enerally vest over three to four years .

RSUs are forfeited in case of termination of employment or service before the satisfaction of service-based vesting conditions.

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31,272 $ 19.89

(1) Class A common stock has not been issued in connection with 142 vested RSUs because such RSUs were unsettled as of January 31, 2023.

The vesting date fair value of RSUs that vested during fiscal years 2023, 2022, and 2021 was $ 228.8 million , $ 1.4 billion, and none , respectively.

Notes to Consolidated Financial Statements

The fair value of RSUs released during fiscal years 2024, 2023, and 2022 was $ 329.6 million , $ 228.8 million, and $ 1.4 billion, respectively.

Prior to the IPO, we granted RSUs under th e 2018 Plan that vested upon the satisfaction of both a service-based condition (generally four years ) and a performance-based condition.

The performance-based vesting condition was deemed satisfied on April 23, 2021, the date that our IPO was completed.

At that time, we recognized $ 233.0 million of cumulative stock-based compensation expense for the portion of these RSUs for which the service-based vesting condition had been fully or partially satisfied.

At that time (during fiscal year 2022), we recognized $ 233.0 million of cumulative stock-based compensation expense for the portion of these RSUs for which the service-based vesting condition had been fully or partially satisfied.

As of January 31, 2024, unrecognized compensation expense associated with unvested RSUs was approximately $ 560.5 million, to be recognized over a weighted-average remaining period of 2.3 years.

Notes to Consolidated Financial Statements

During fiscal year 2023, our compensation committee approved modifications to allow accelerated vesting of approximately 0.5 million RSUs upon employee terminations.

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During fiscal year 2022, our compensation committee approved modifications to allow accelerated vesting of approximately 0.2 million RSUs upon employee terminations, resulting in the recognition of $ 10.9 million of incremental expense.

In addition, during fiscal year 2022, our compensation committee approved adjustments to the vesting schedules of our unvested RSUs which standardize their future vesting schedules by shifting each vesting date to the first day of the calendar quarter in which that vesting date was originally scheduled to occur.

These adjustments caused a slight reduction in service periods for the affected tranches and resulted in $ 2.2 million of expense acceleration during fiscal year 2022.

Restricted Stock Awards

In September 2020, we issued 0.1 million RSAs to a member of our board of directors at a grant date fair value of $ 33.22 per share, totaling $ 4.0 million.

Such RSAs vest monthly over four years from the grant date.

The unvested shares are subject to a repurchase right held by us at the original purchase price.

As of January 31, 2023, total unrecognized compensation expense related to unvested RSAs was $ 1.6 million , to be recognized over the remaining vesting period of 1.6 years .

Performance Stock Units

In July 2023, we granted approximately 0.1 million PSUs at a grant date fair value of $ 18.08 per share.

The PSUs were subject to performance conditions related to the achievement of certain individual and company targets for fiscal year 2024, which were not met.

As a result, the PSUs have been cancelled and no expense was recognized during fiscal year 2024.

Employee Stock Purchase Plan Awards

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Year Ended January 31,

2024 2023 2022

Expected term (years) 0.5 0.5 0.6

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Stock-Based Compensation Associated with Business Acquisition

At the closing of the acquisition of Re:infer on July 29, 2022, we issued 0.4 million shares of Class A common stock (outside of the 2021 Plan) that will be released to certain employee sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to employment-related clawback provisions.

Notes to Consolidated Financial Statements

January 31, 2023, total unrecognized compensation expense related to these shares was $ 6.4 million, which is to be recognized over a weighted-average remaining period of 2.5 years.

At the closing of the acquisition of Re:infer on July 29, 2022, we issued 0.4 million shares of Class A common stock (outside of the 2021 Plan) to be released to certain employee sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to employment-related clawback provisions.

As of January 31, 2024, total unrecognized compensation expense related to these shares was $ 3.8 million, which is to be recognized over a weighted-average remaining period of 1.5 years.

Stock-Based Compensation Expense

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Total $ 371,955 $ 369,840 $ 515,583

The expense presented in the above table is net of capitalized stock-based compensation relating to software development costs of zero , $ 4.5 million, and $ 0.3 million for fiscal years 2023, 2022, and 2021, respectively.

See Note 12, Convertible Preferred Stock and Stockholders' Equity (Deficit) for further information regarding stock-based compensation expense recognized in connection with secondary transactions.

(1) Presented net of capitalized stock-based compensation relating to software development costs of $ 4.5 million.

Notes to Consolidated Financial Statements

14 Income Taxes

and foreign components o f (loss) income before income taxes for fiscal years 2023, 2022, and 2021 are as follows (in thousands):

and foreign components o f loss before income taxes are as follows for the periods presented (in thousands):

Year Ended January 31,

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Loss before income taxes $ ( 75,815 ) $ ( 317,561 ) $ ( 510,883 )

The components of the provision for (benefit from) income taxes for fiscal years 2023, 2022, and 2021 are as follows (in thousands):

The components of the provision for income taxes are as follows for the periods presented (in thousands):

Year Ended January 31,

2024 2023 2022

Provision for (benefit from) income taxes

Current expense

Current expense (benefit)

Federal $ ( 106 ) $ 213 $ —

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Total deferred expense (benefit) $ 554 $ 861 $ ( 5,832 )

Total provision for (benefit from) income taxes $ 10,791 $ 14,703 $ ( 2,265 )

Notes to Consolidated Financial Statements

The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for fiscal years 2023, 2022, and 2021:

Total provision for income taxes $ 14,068 $ 10,791 $ 14,703

The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for the periods presented:

Year Ended January 31,

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Research and development credits 18.9 3.3 3.8

Cross border tax law ( 27.4 ) — —

Other, net ( 0.9 ) ( 0.3 ) ( 0.2 )

Effective income tax rate ( 18.6 ) % ( 3.4 ) % ( 2.9 ) %

Significant components of DTAs and DTLs as of January 31, 2023 and 2022 are as follows (in thousands):

Notes to Consolidated Financial Statements

Significant components of DTAs and DTLs are as follows as of the periods presented (in thousands):

As of January 31,

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Research and development 103,263 67,103

Foreign exchange — 4,478

Depreciation and amortization 587 587

Excessive borrowing — 1,668

Other 7,406 1,170

Lease liabilities (1)

Total deferred tax assets, gross 518,735 514,800

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Foreign exchange ( 37 ) ( 97 )

Depreciation and amortization — ( 1,446 )

Right-of-use assets (1)

Commissions ( 32,747 ) ( 29,245 )

Other — ( 1 )

Total deferred tax liabilities ( 44,150 ) ( 32,654 )

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Net deferred tax assets $ 4,545 $ 5,557

We have evaluated the available positive and negative evidence supporting the realization of our U.S.

(1) As of January 31, 2023, immaterial amounts related to lease liabilities and right-of-use assets and were presented as part of "Other."

In preparing the provision for income taxes, we assess the available positive and negative evidence to determine whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets.

A significant piece of objective negative evidence was the cumulative loss we incurred over the three-year period ending January 31, 2024.

Such objective evidence outweighs other subjective evidence, such as our projections for future growth.

Based on such evaluation we determined as of January 31, 2024 that it was more likely than not that the deferred tax assets will not be realized.

Accordingly, we recorded a full valuation allowance against U.S.

federal and state, Romanian, and U.K.

DTAs, including cumulative losses and the amount and timing of future taxable income, and have determined that it is more likely than not that these assets will not be realized.

Accordingly, we have recorded a full valuation allowance against U.S.

federal and state, Romanian, and U.K DTAs as of January 31, 2023 and 2022.

Notes to Consolidated Financial Statements

The table below details the changes in DTA valuation allowances for fiscal years 2023 and 2022 (in thousands):

Balance Valuation

During the Period Valuation

During the Period Ending

DTAs as of January 31, 2024, consistent with January 31, 2023.

However, we may release some of these valuation allowances in future periods if objective negative evidence of cumulative losses is no longer present and positive evidence, such as projection of future growth, supports the realization of such deferred tax assets.

Release of all or a portion of these valuation allowances would result in a decrease in the provision for income taxes in the period of the release.

The table below details the changes in DTA valuation allowances for the periods presented (in thousands):

Balance Additions During the Period

Reductions During the Period

Year ended January 31, 2024

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$ 422,262 $ 54,327 $ — $ 476,589

Notes to Consolidated Financial Statements

The reduction in valuation allowance during fiscal year 2024 was driven by a decrease in our deferred tax assets in Romania and the U.K.

As of January 31, 2024, we had U.S.

1 unchanged sentence

As of January 31, 2023 we had U.S.

federal NOLs of $ 1,015.4 million, $ 1,006.1 million of which could be carried forward indefinitely, and $ 9.3 million of which were to begin expiring in 2035.

federal NOLs of $ 979.9 million, all of which could be carried forward indefinitely.

As of January 31, 2024 and 2023, we had state NOLs of $ 824.7 million and $ 771.5 million, respectively, which begin expiring in 2025.

3 unchanged sentences

NOLs of $ 118.3 million and $ 135.1 million, respectively, which may be carried forward indefinitely.

Pursuant to Section 382 of the I R C , annual use of our U.S.

Pursuant to Section 382 of the IRC, annual use of our U.S.

NOLs may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period.

8 unchanged sentences

Our tax positions are subject to income tax audits in multiple tax jurisdictions globally, and we believe that we have provided adequate reserves for our income tax uncertainties in all open tax years.

Our Romanian subsidiary is currently under audit for tax years from 2017 through 2022.

Our Indian subsidiary is currently under audit for tax years from 2019 through 2021.

Our Romanian subsidiary is currently undergoing final procedures in the audit for tax years from 2017 through 2022.

Our Indian subsidiary is currently going through the administrative dispute process for the audit for tax years from 2019 through 2021.

We file income tax returns in the U.S.

22 unchanged sentences

Returnable shares issued in connection with business acquisition 349 — 219 — — —

Total weighted-average anti-dilutive common stock equivalents 46,725 — 111,527 — 359,295 —

Total 51,231 — 46,725 — 111,527 —

Notes to Consolidated Financial Statements

16 Related Party Transactions

For a description of certain related party transactions, see Note 12, Convertible Preferred Stock and Stockholders' Equity (Deficit) —Secondary Transactions.

Since the third quarter of fiscal 2022, we have made use of an aircraft owned by Daniel Dines, our Co-CEO , through a special purpose limited liability company in which we have a variable interest.

The aircraft is operated by a third-party aircraft management company.

Dines, through the special purpose limited liability company, obtained financing for the aircraft and bears all associated operating, personnel, and maintenance costs.

We are able to use the aircraft, when available, for business purposes in the course of our normal operations at rates that approximate the cost of operating the aircraft but that do not exceed current market rates.

For fiscal years 2023 and 2022 we incurred expenses of $ 1.9 million and $ 1.1 million, respectively, related to our business use of the aircraft.

Beginning in the third quarter of fiscal year 2022, we have at times made use of an aircraft which is owned by Daniel Dines, our co-founder and then CEO, through a special purpose LLC and which is operated by a third-party aircraft management company.

Dines, through this special purpose LLC, obtained financing for the aircraft and bears all associated operating, personnel, and maintenance costs for the aircraft.

We determined at the inception of this arrangement that the LLC is a VIE of which we are not the primary beneficiary;

accordingly, we do not consolidate it in our consolidated financial statements.

We did not incur any expense related to the use of the aircraft in fiscal year 2024.

In fiscal year 2023 and 2022, we incurred expenses of $ 1.9 million and $ 1.1 million, respectively, in connection with our business use of the aircraft.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data