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Item 7. Management’s Discussion and Analysis

2026-03-25 compared with 2025-03-24 · 115 added, 117 removed, 318 unchanged (42% of the section changed)

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A discussion regarding our financial condition and our results of operations for fiscal year 2026 compared to fiscal year 2025 is presented below.

For a discussion regarding our results of operations for fiscal year 2024 compared to fiscal year 2023 see th e 2024 Form 10-K , under the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is incorporated herein by reference.

UiPath is at the forefront of technology innovation and thought leadership in automation, as the provider of an end-to-end platform that can help customers realize the true potential of digital transformation.

The UiPath Platform ™ leverages AI, ML, and NLP to empow er automations that emulate human behavior, driving operational efficiencies and meaningful business outcomes without requiring significant changes to the organization's underlying technology infrastructure.

Historically, we have grown our revenue and ARR sign ificantly by helping customers adopt automation as a tool, process by process.

Today, we continue to build on this foundation and drive the evolution of AI-powered automation by inspiring customers to see automation more holistically, as not just a tool but as a whole new way of operating and innovating.

Our results of operations and financial condition are impacted by the macro factors affecting our industry, including the proliferation of cloud-based applications, the cost of skilled human capital, and the global demand for automation solutions.

While our business is influenced by these macro factors, our results of operations are more directly affected by certain company-specific factors, including:

• our ability to attract new customers, which depends on a number of other factors, including our ability to drive awareness of the benefits and power of automation among our existing and prospective customers, the effectiveness and pricing of our products, the offerings of our competitors, and competition among resellers;

For a discussion regarding our results of operations for fiscal year 2025 compared to fiscal year 2024 see th e 2025 Form 10-K , u nder the section titled " Management's Discussion and Analysis of Financial Condition and Results of Operations ," which is incorporated herein by reference.

Building upon decades of leadership in automation, UiPath is pioneering the evolution from rule-based automation to intelligent, agentic automation.

The UiPath Platform™ uniquely combines controlled agency, developer flexibility, and seamless integration to help organizations scale agentic automation safely and confidently.

Committed to security, governance, and interoperability, we support enterprises as they transition into a future where automation delivers on the full potential of AI to transform industries.

Historically, we have grown our revenue and ARR significantly by helping customers adopt automation as a tool, process by process, to unlock human potential.

Today, our automation platform builds upon this experience by providing our customers with a foundation for enterprise-scale agentic automation.

Our results of operations and financial condition are impacted by the macroeconomic factors affecting our industry, including the proliferation of cloud-based applications, the cost of skilled human capital, and the global demand for agentic automation solutions.

While our business is influenced by these macroeconomic factors, our results of operations are more directly affected by certain company-specific factors, including:

• our ability to attract new customers, which depends on a number of other factors, including our ability to drive awareness of the benefits and power of agentic automation among our existing and prospective customers, the effectiveness and pricing of our products, the offerings of our competitors, and competition among resellers;

• our ability to increase sales to existing customers, which depends on factors such as our customers’ satisfaction with our platform, competition, and pricing, and overall changes in our customers’ propensity to invest in automation;

• our ability to grow our p artner base and execute on all aspects of partner relationships, which depends on the competitiveness of our platform and the profitability of our relationship for our partners and potential partners;

• our ability to grow our partner base and execute on all aspects of partner relationships, which depends on the competitiveness of our platform and the profitability of our relationship for our partners and potential partners;

• our ability to sustain innovation and automation leadership in order to maintain our competitive advantage, which depends on our capacity to invest in research and development to expand the capabilities of our platform, our ability to collaborate with other leading technology companies to develop integrations, and our ability to execute strategic acquisitions and investments in businesses and technologies to drive our product and market expansion;

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• ARR of $1,852.6 million increased 11% year-over-year.

• Gross margin was 83% for fiscal year 2025, compared to 85% for fiscal year 2024.

• Gross margin was 83% for fiscal year 2026 and fiscal year 2025.

• Cash and cash equivalents, restricted cash, and marketable securities were $1,689.9 million as of January 31, 2026, compared to $1,724.1 million as of January 31, 2025.

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Internationally, we price our platform in currencies that may not be the functional currency.

Accordingly, the heightened volatility of global markets has exposed us and will continue to expose us to foreign currency fluctuations, which may impact demand for our platform, our near-term results, comparison of results to prior periods, and our ability to predict future results.

Further, cash, cash equivalents, and marketable securities represent a significant portion of our total assets;

as such, liquidity concerns in the financial services industry may have an effect on our business, financial conditions, and results of operations.

Additionally, the return on our cash, cash equivalents, and marketable securities is sensitive to changes in interest rates.

Accordingly, the heightened volatility of global markets has exposed us and will continue to expose us to foreign currency

fluctuations, which may impact demand for our platform, our near-term results, comparability of results to prior periods, and our ability to predict future results.

Further, cash, cash equivalents, and marketable securities represent a significant portion of our total assets, and the return on our cash, cash equivalents, and marketable securities is sensitive to changes in interest rates.

Volatility in the interest rate environment may impact the amount of interest and other income reported on our consolidated statements of operations, the comparability of these amounts to prior periods, and our ability to predict future profitability.

We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape.

Workforce Restructuring

Historically, we have experienced seasonality in new and renewal customer bookings, as typically we enter into a higher percentage of license agreements with new customers and renewals with existing customers in the second half of our fiscal year.

We believe that this seasonality results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers.

Seasonal fluctuations in our sales mean that our revenue may not be consistent from period to period.

Workforce Restructurings

On June 24, 2022, our board of directors approved the Fiscal Year 2023 Workforce Restructuring to manage our operating expenses by reducing our global workforce by approximately 5%.

The workforce reduction aimed to simplify our go-to-market approach and improve sales productivity.

In connection with th ese workforce reductions, we also ceased use of our office in Brooklyn, NY.

In connection with these workforce reductions, we also ceased use of our office in Brooklyn, NY.

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

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On July 8, 2024, o ur board of directors approved the Fiscal Year 2025 Workforce Restructuring to reshape the organization by streamlining our structure, particularly in operational and corporate functions, to better prioritize our go-to-market investments and focus our research and development investments on AI and driving innovation across our platform.

The Fiscal Year 2025 Workforce Restructuring is substantially completed, with any remaining actions now expected to be completed by end of the second quarter of fiscal year 2026.

Refer to Note 11, Commitments and Contingencies— Workforce Restructuring included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

The Fiscal Year 2025 Workforce Restructuring was completed during the second quarter of fiscal year 2026.

Refer to Note 10, Commitments and Contingencies—Workforce Restructurings included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Components of Results of Operations

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We have a unified commercial offering for software products with both on-premises and cloud deployment options that allows customers the choice of either deployment option throughout the term of the contract.

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

These offerings are comprised of three types of performance obligations:

term license, maintenance and support, and SaaS.

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

Our term licenses (typically sold as a part of flexible deployment 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 services, 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 and SaaS

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

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

Professional Services and Other

Professional services and other revenue consists of fees associated with professional services for process automation, customer education, and training services.

Professional services and other revenue consists of fees associated with professional services, including deployment of agentic automation, customer education, and training services.

Our professional services contracts are structured on a time and materials or fixed price basis, and the related revenue is recognized as the services are rendered.

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We recognize these expenses as they are incurred.

We expect cost of subscription services revenue to continue to increase in absolute dollars for the foreseeable future as our SaaS business grows.

In the future, we expect further expansion of our cloud-based deployments.

As more of our customer base deploys our products via SaaS, we expect our gross margin to be impacted by increased hosting fees and cloud infrastructure costs.

We expect cost of subscription services revenue to increase in absolute dollars in the longer term, particularly with regard to hosting and cloud infrastructure costs as our SaaS business grows.

In the future, we expect further expansion of our cloud-based deployments, and as more of our customer base deploys our products via SaaS, we expect our gross margin to be impacted by these costs.

Professional Services and Other

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Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing teams and related sales support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.

Sales and marketing expenses also include sales and partner commissions, marketing event costs, advertising costs, travel, trade shows, other marketing materials, and allocated overhead.

Sales and marketing expenses also include sales and partner commissions, marketing event costs, advertising costs, travel, trade shows, other marketing materials, amortization of acquired customer relationships, and allocated overhead.

We expect that over the longer term our sales and marketing expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses.

Research and Development

Research and development expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs for our research and development employees, and allocated overhead.

Research and development expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefit costs, for our research and development employees, hosting and software services costs, and allocated overhead.

Research and development costs are expensed as incurred, with the exception of certain software development costs which are eligible for capitalization.

We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts

to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure.

We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure.

Our research and development expenses may fluctuate as a percentage of revenue from period to period due to the timing and extent of expenses.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs associated with our finance, legal, human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead.

General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefit costs, associated with our finance, legal, human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead.

We expect that over the longer term our general and administrative expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses.

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Interest income consists of interest earned on our cash and cash equivalents and marketable securities.

Other Income, Net

Other inc ome, net primarily consists of foreign exchange gains and losses.

Other income, net also includes accretion of discounts and premiums on marketable securities.

Other (Expense) Income, Net

Other (expense) inc ome, net primarily consists of foreign exchange gains and losses.

Other (expense) income, net also includes accretion of discounts and premiums on marketable securities.

(Benefit from) Provision for Income Taxes

(Benefit from) provision for income taxes consists of U.S.

federa l and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

We currently maintain a full valuation allowance on our U.S.

federal and state and Romania DTAs , as we have concluded as of January 31, 2025 that it is more likely than not that these DTAs will not be realized.

Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by ch anges in our valuation allowances.

(Benefit from) provision for income taxes cons ists of U.S.

federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

Our effective tax rate is impacted by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by changes in our valuation allowances.

We currently maintain a full valuation allowance on certain U.S.

state DTAs and a full valuation allowance on our Romani a DTA, as we have concluded as of January 31, 2026 that it is more likely than not that these DTAs will not be fully realized.

However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that sufficient positive evidence may become available to allow us to conclude that a valuation allowance is no longer needed for our U.S.

state DTAs within the next 12 months, and for our Romania DTA, or a portion thereof, within the next 24 months, which would result in income tax benefit in the period of the respective release.

Results of Operations

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Total operating expenses 1,282,828 1,345,291

Operating loss (162,569) (164,720)

Operating income (loss) 56,760 (162,569)

Interest income 48,023 49,422

Other income, net 35,047 31,775

Loss before income taxes (78,100) (75,815)

(Benefit from) provision for income taxes

(4,406) 14,068

Net loss $ (73,694) $ (89,883)

Other (expense) income, net (4,155) 35,047

Income (loss) before income taxes 100,628 (78,100)

Benefit from income taxes (181,702) (4,406)

Net income (loss) $ 282,330 $ (73,694)

(1) Includes amortization of acquired intangible assets as follows (in thousands):

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Total employer payroll tax expense related to employee equity transactions $ 5,742 $ 6,999

$ 6,999 $ 9,888

(4) Includes restructuring expense as follows (in thousands):

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Total operating expenses 79 % 94 %

Operating loss (11) % (13) %

Operating income (loss) 4 % (11) %

Interest income 3 % 3 %

Other income, net 3 % 3 %

Loss before income taxes (5) % (6) %

Other (expense) income, net — % 3 %

Income (loss) before income taxes 7 % (5) %

(Benefit from) provision for income taxes (11) % — %

Net loss (5) % (7) %

Net income (loss) 18 % (5) %

Comparison of Fiscal Year 2026 and Fiscal Year 2025

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Total revenue $ 1,610,572 $ 1,429,664 $ 180,908 13 %

Total revenue increased by $121.6 million, or 9%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $152.0 million increase in subscription services revenue partially offset by a $34.2 million decrease in licenses revenue, related in part to the transition to our Flex Offerings.

Total revenue increased by $180.9 million, or 13%, for fiscal year 2026 compared to fiscal year 2025, driven by a $152.5 million increase in subscription services revenue, a $19.2 million increase in licenses revenue, and a $9.2 million increase in professional services and other revenue.

As we continued to expand our sales efforts in the U.S.

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Gross margin 83 % 83 %

Total cost of revenue increased by $51.0 million, or 26%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $55.7 million increase in cost of subscription services revenue, partially offset by a $2.8 million decrease in cost of professional services and other revenue.

The increase in cost of subscription services revenue was primarily driven by a $25.1 million increase in third-party hosting and software services costs as a result of increased usage of our subscription services and a $23.1 million increase in personnel-related expenses, which included a $12.4 million increase in salary-related and bonus expenses associated with both increased average headcount and merit increases, a $4.7 million increase in stock-based compensation expense, a $3.1 million aggregate increase in employee insurance costs and employer payroll tax expense, and a $2.6 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring.

Cost of subscription services revenue was also impacted by a $6.9 million increase in costs associated with the use of third-party vendors.

The decrease in cost of professional services and other revenue was primarily driven by a $3.8 million decrease in personnel-related expenses, largely related to lower salary-related and bonus expenses, partially offset by a $1.5 million increase in costs associated with the use of third-party subcontractors to deliver professional services to our customers.

Our gross margin decreased to 83% for fiscal year 2025 compared to 85% for fiscal year 2024, due to decrease in the proportion of higher-margin license revenue and the aforementioned increase in cost of subscription services revenue driven by increased hosting and personnel costs.

Total cost of revenue increased by $24.0 million, or 10%, for fiscal year 2026 compared to fiscal year 2025, primarily due to a $37.3 million increase in cost of professional services revenue, partially offset by a $10.0 million decrease in cost of subscription services revenue and a $3.2 million decrease in cost of licenses revenue.

The increase in cost of professional services and other revenue was primarily driven by a $33.5 million increase in costs associated with the use of third-party subcontractors to deliver professional services to our customers.

The decrease in cost of subscription services revenue was primarily driven by a $22.1 million decrease in personnel-related expenses, which included an $11.1 million decrease in salary-related and bonus expenses associated with reduced headcount, a $5.7 million decrease in stock-based compensation expense, a $2.2 million decrease in employee termination benefits due to reduced activity under our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026, and a $1.7 million aggregate decrease in employee insurance costs and employer payroll taxes.

This decrease was partially offset by a $10.1 million increase in third-party hosting and software services costs as a result of increased usage of our subscription services.

The decrease in cost of licenses revenue was primarily driven by a $2.2 million decrease in depreciation and amortization expense and a $1.0 million decrease in software services costs.

Our gross margin remained constant at 83% for fiscal year 2026 compared to 83% for fiscal year 2025, reflecting increased subscription services revenue and margin offset by a decrease in the proportion of higher-margin licenses revenue.

Operating Expenses

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Percentage of revenue 42 % 52 %

Sales and marketing expense increased by $25.4 million, or 4%, for fiscal year 2025 compared to fiscal year 2024.

This increase was primarily attributable to a $15.0 million increase in personnel-related expenses, which included a $14.1 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring, a $9.1 million increase in salary-related and bonus expenses, a $2.5 million aggregate increase in employee insurance costs and employer payroll taxes, and a $0.5 million increase in general employee severance, partially offset by a $10.2 million decrease in stock-based compensation expense and a $1.1 million decrease in employer payroll tax expense related to employee equity transactions.

Sales and marketing was also impacted by a $10.7 million increase in sales commissions as a result of higher amortization of capitalized contract acquisition costs and a $4.7 million increase in marketing expenses largely related to our Forward VII user conference.

These increases were partially offset by a $2.8 million decrease in depreciation and amortization expense and a $1.1 million decrease in sales-related software expenses.

Sales and marketing expense decreased by $55.2 million, or 7%, for fiscal year 2026 compared to fiscal year 2025.

This decrease was primarily attributable to a $76.0 million decrease in personnel-related expenses, which included a $46.9 million decrease in stock-based compensation expense, a $15.8 million decrease in salary-related and bonus expenses, a $12.9 million decrease in employee termination benefits due to reduced activity under our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026, and a $2.1 million aggregate decrease in employee insurance costs and employer payroll taxes, partially offset by a $1.6 million increase in general employee severance.

This decrease was partially offset by a $7.9 million increase in third-party consulting fees, a $7.0 million increase in sales commissions expense, a $3.7 million increase in marketing expenses, and a $2.7 million increase in depreciation and amortization expense.

Research and Development

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Research and development expense increased by $4.5 million, or 1%, for fiscal year 2026 compared to fiscal year 2025.

The increase was primarily attributable to a $26.1 million increase in personnel-related costs, which included a $14.8 million increase in stock-based compensation expense, an $8.5 million increase in salary-related and bonus expenses, and a $2.7 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring.

Research and development expense was also impacted by an $18.7 million increase in hosting and software services costs, a $1.7 million increase in third-party consulting fees, and a $1.6 million increase in rent expense.

The increase was primarily attributable to a $15.6 million increase in personnel-related costs, which included a $16.3 million increase in salary-related and bonus expenses and a $2.2 million aggregate increase in employee insurance costs and employer payroll taxes associated with higher headcount and merit increases, partially offset by a $3.1 million decrease in employee termination benefits due to reduced activity under our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026.

This decrease was partially offset by a $10.8 million decrease in hosting and software services costs.

General and Administrative

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General and administrative expense decreased by $11.8 million, or 5%, for fiscal year 2026 compared to fiscal year 2025.

This decrease was primarily attributable to a $19.7 million decrease in personnel-related expenses, which included a $23.5 million decrease in stock-based compensation expense and a $0.8 million decrease in employer payroll tax expense related to employee equity transactions, partially offset by a $2.6 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring and a $1.9 million increase in employee insurance costs.

General and administrative expense was also impacted an $11.1 million increase in software service and implementation costs, a $2.7 million increase due to a credit loss recovery recorded in the prior comparable period, a $2.3 million increase in charitable donations mainly driven by the increased fair value of our Class A common shares contributed to a donor-advised fund in the current year, and a $1.9 million increase in third-party consulting fees, partially offset by a $3.9 million decrease in commercial insurance costs.

This decrease was primarily attributable to a $14.8 million decrease in personnel-related expenses, which included a $13.1 million decrease in stock-based compensation expense and a $2.0 million decrease in employee termination benefits due to reduced activity under our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026.

General and administrative expense was also impacted by a $5.0 million decrease in software service and implementation costs, a $2.4 million decrease in charitable donation expense due to the reduced value of our Class A common shares contributed to a donor-advised fund in the current year, and a $1.2 million aggregate decrease in depreciation and amortization and rent expense.

These decreases were partially offset by a $9.0 million increase in third-party advisory and services fees, including a $5.5 million increase in legal advisory fees related to acquisitions, intellectual property, and other matters, and a $3.8 million increase in credit loss expense associated with specific reserves.

Interest Income

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Interest income decreased by $1.4 million, or 3%, for fiscal year 2026 compared to fiscal year 2025 as a result of a period-over-period decrease in our aggregate balance of cash and cash equivalents and marketable securities, as well as decreased interest rates.

Other Income, Net

Other (Expense) Income, Net

Year Ended January 31,

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(dollars in thousands)

Other income, net $ 35,047 $ 31,775 $ 3,272 10 %

Other (expense) income, net $ (4,155) $ 35,047 $ (39,202) (112) %

Percentage of revenue — % 3 %

Other income, net increased by $3.3 million, or 10%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $6.6 million increase in foreign currency transaction gains and a $1.9 million increase in accretion of discounts on marketable securities, partially offset by a $3.9 million decrease in legal expense related to shareholder litigation and a $1.6 million decrease in sublease income.

(Benefit From) Provision For Income Taxes

Other expense, net increased by $39.2 million, or 112%, for fiscal year 2026 compared to fiscal year 2025, primarily due to a $21.5 million decrease in accretion of net discounts on marketable securities, a $13.9 million increase in losses from foreign currency transactions, and a $4.1 million increase in legal expense related to shareholder litigation.

Benefit From Income Taxes

Year Ended January 31,

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(dollars in thousands)

(Benefit from) provision for income taxes $ (4,406) $ 14,068 $ (18,474) NM (1)

Benefit from income taxes $ (181,702) $ (4,406) $ (177,296) NM (1)

Percentage of revenue (11) % — %

(1) Not meaningful

Provision for income taxes decreased by $18.5 million for fiscal year 2025 compared to fiscal year 2024, mainly driven by the tax benefit related to release of valuation allowance associated with our U.K.

DTA, partially offset by tax expenses recognized related to the changing of our intent with respect to permanent reinvestment of foreign earnings.

Benefit from income taxes increased by $177.3 million for fiscal year 2026 compared to fiscal year 2025, mainly driven by release of valuation allowance associated with our U.S.

entity, as well as period-over-period change in the proportion of operating profits realized across jurisdictions.

Key Performance Metric

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Our dollar-based net retention rate, which represents the net expansion of ARR from existing customers over the preceding 12 months, was 107% and 110% as of January 31, 2026 and 2025, respectively.

We calculate dollar-based net retention rate as of a period end by starting with Prior Period ARR , the ARR from the

cohort of all customers as of 12 months prior to such period end.

We then calculate Current Period ARR , the ARR from these same customers as of the current period end.

We calculate dollar-based net retention rate as of a period end by starting with Prior Period ARR , the ARR from the cohort of all customers as of 12 months prior to such period end.

We then calculate Current Period ARR , the ARR

from these same customers as of the current period end.

Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but does not include ARR from new customers in the current period.

We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate.

Our ARR may fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with our platform, pricing, competitive offerings, economic conditions, overall changes in our customers’ spending levels, and our ability to successfully execute on our strategic goals.

Our ARR may fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with our platform, pricing, competitive offerings, economic conditions, overall changes in our customers’ spending levels, acquisitions, and our ability to successfully execute on our strategic goals.

ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or to replace these items.

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The timing of recognition of ARR is determined by contract billing structure, whereas billing structure will neither accelerate nor delay recognition of future revenue.

For example, in a multi-year contract invoiced upfront, ARR is the annualized invoiced amount per solution SKU related to the final year of the contract assuming no reserve is applied, whereas revenue is determined by total contract value and timing of satisfaction of the underlying performance obligations.

For example, in a multi-year contract invoiced up front, ARR is the annualized invoiced amount per solution SKU related to the final year of the contract assuming no reserve is applied, whereas revenue is determined by total contract value and timing of satisfaction of the underlying performance obligations.

ARR does not include invoiced amounts associated with perpetual licenses or professional services.

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(dollars in thousands)

$ 1,666,136 $ 1,463,698

ARR $ 1,852,567 $ 1,666,136

Incremental ARR (1)

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Liquidity and Capital Resources

We have financed operations since our inception primarily through customer payments and net proceeds from sales of equity securities.

Our principal uses of cash in recent periods have been to fund our operations, invest in capital expenditures, engage in various business acquisitions, and, more recently, repurchase shares of our Class A common stock.

As of January 31, 2025 and 2024, our principal sources of liquidity were cash, cash equivalents, and

marketable securities totaling $1,723.6 million and $1,879.8 million, respectively, and we had an accumulated deficit of $1,987.9 million and $1,914.2 million, respectively.

During the fiscal years ended January 31, 2025 and 2024, we reported net losses of $73.7 million and $89.9 million, respectively, and net cash provided by operations of $320.6 million and $299.1 million, respectively.

In October 2020, we entered into the Credit Facility with an available borrowing capacity of $200.0 million.

We did not borrow under the Credit Facility at any time, and it was terminated in September 2023, shortly prior to its scheduled maturity date.

Refer to Note 10, Credit Facility for further details.

As of January 31, 2026 and 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1,689.5 million and $1,723.6 million, respectively, and we had an accumulated deficit of $1,705.5 million and $1,987.9 million, respectively.

During the fiscal years ended January 31, 2026 and 2025, we reported net income (loss) of $282.3 million and $(73.7) million, respectively, and net cash provided by operations of $371.2 million and $320.6 million, respectively.

Cash generated by our operations in recent periods has principally

been used to fund working capital requirements such as personnel and facilities costs, invest in capital expenditures, engage in various business and asset acquisitions, and repurchase shares of our Class A common stock.

Our future capital requirements will depend on many factors, including our revenue growth rate, sales of our products and services, license renewal activity, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, the continuing market adoption of our products, expenses associated with international expansion, the timing and extent of capital expenditures to invest in existing and new office spaces, and the timing and extent of stock repurchases.

We may in the future enter into arrangements to acquire or invest in complementary businesses, products, and technologies.

We may in the future enter into arrangements to acquire or invest in complementary businesses or assets.

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

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If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

We believe that our existing cash and cash equivalents, marketable securities, and payments from customers will be sufficient to fund our anticipated cash requirements for the next twelve months and the long term.

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.

We believe that our existing cash and cash equivalents, marketable securities, and cash flows from operations will be sufficient to fund our anticipated cash requirements for the next twelve months and the long term.

Stock Repurchases

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

On August 30, 2024, our board of directors authorized the repurchase of an additional $500.0 million of our outstanding shares of Class A common stock.

Refer to Note 12, Stockholders' Equity—Stock Repurchase Program for further details.

Subsequent to January 31, 2026, we fulfilled the aforementioned authorizations, and in March 2026, our board of directors authorized a new stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our Class A common stock.

Refer to Note 11, Stockholders' Equity—Stock Repurchases for further details.

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

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Cash paid for employer payroll taxes related to employee equity transactions $ (5,750) $ (6,907)

Net receipts (payments) of employee tax withholdings on stock option exercises

Net receipts of employee tax withholdings on stock option exercises 15 3

Cash paid for restructuring costs (14,101) (15,283)

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Our primary uses of cash from operating activities are for personnel-related expenses, direct costs to deliver licenses and provide subscription and professional services, and marketing expenses.

Net cash provided by operating activities for fiscal year 2025 of $320.6 million was driven by cash collections from our customers, which were approximately 7% higher than in the prior year, and interest income on our marketable securities .

of fiscal year 2025 and employer payroll taxes related to employee equity transactions.

Other cash operating expenditures included payments related to our Fiscal Year 2025 Workforce Restructuring, and payments for professional service, software and office rent.

Net cash provided by operating activities for fiscal year 2024 of $299.1 million was driven by cash collections from our customers and interest income on our marketable securities, partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2023 bonuses paid in the first quarter of fiscal year 2024 and employer payroll taxes related to employee equity transactions.

Other cash operating expenditures included payments related to our Fiscal Year 2023 Workforce Restructuring, which was concluded during the second quarter of fiscal year 2024, and payments for professional services, software, and office rent.

Net cash provided by operating activities for fiscal year 2026 of $371.2 million was driven by cash collections from our customers, which were approximately 4% higher than in the prior year.

These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2025 bonuses paid in the first quarter of fiscal year 2026.

Other cash operating expenditures included payments related to our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026, and payments for professional services, software, and office rent.

Net cash provided by operating activities for fiscal year 2025 of $320.6 million was driven by cash collections from our customers and interest income on our marketable securities.

These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2024 bonuses paid in the first quarter of fiscal year 2025 and employer payroll taxes related to employee equity transactions.

Other cash operating expenditures included payments related to our Fiscal Year 2025 Workforce Restructuring and payments for professional services, software, and office rent.

Investing Activities

Net cash used in investing activities for fiscal year 2026 of $22.5 million was driven by a net payment of $24.8 million in connection with the acquisition of Peak, $19.0 million in capital expenditures primarily related to leasehold improvements, and $15.4 million in other investing outflows, partially offset by $36.8 million in net maturities of marketable securities.

Net cash used in investing activities for fiscal year 2025 of $45.5 million was primarily driven by a $35.8 million investment in the H Company and $14.9 million in capital expenditures, partially offset by $5.2 million in net maturities of marketable securities.

Net cash used in investing activities for fiscal year 2024 of $439.6 million was primarily driven by $435.0 million in net purchases of marketable securities and $7.3 million in capital expenditures.

Financing Activities

Net cash used in financing activities for fiscal year 2025 of $450.5 million was primarily driven by $390.8 million in repurchases of Class A common stock under our stock repurchase program, $77.9 million in payments of tax withholdings on net settlement of equity awards, and $5.6 million loan note payment on the second anniversary of the acquisition of Re:infer, partially offset by $15.6 million in proceeds from ESPP contributions and $8.0 million in proceeds from stock option exercises.

Net cash used in financing activities for fiscal year 2024 of $196.9 million was primarily driven by $112.1 million in payments of tax withholdings on net settlement of equity awards, $102.6 million in repurchases of Class A common stock under our stock repurchase program, and $5.9 million loan note payment on the first anniversary of the acquisition of Re:infer, partially offset by $17.6 million in proceeds from ESPP contributions and $6.7 million in proceeds from stock option exercises.

Net cash used in financing activities for fiscal year 2026 of $372.4 million was primarily driven by $329.1 million in repurchases of Class A common stock under our stock repurchase program and $59.1 million in payments of tax withholdings on net settlement of equity awards, partially offset by $14.9 million in proceeds from ESPP contributions and $1.1 million in proceeds from stock option exercises.

Net cash used in financing activities for fiscal year 2025 of $450.5 million was primarily driven by $390.8 million in repurchases of Class A common stock under our stock repurchase program, $77.9 million in payments of tax withholdings on net settlement of equity awards, and $5.6 million loan note payment on the second anniversary of the acquisition of Re:infer LTD, partially offset by $15.6 million in proceeds from ESPP contributions and $8.0 million in proceeds from stock option exercises.

Material Cash Requirements

Our material cash requirements predominantly relate to working capital requirements, including employee compensation and payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations, including leases and purchase commitments.

Our material cash requirements predominantly relate to working capital requirements, including employee compensation, payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations, including leases and purchase commitments.

As of January 31, 2026, accrued compensation and benefits of $121.0 million are included in current liabilities on our consolidated balance sheet.

Refer to Note 9, Consolidated Balance Sheet Components—Accrued Expenses and Other Current Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities as of January 31, 2025.

Refer to Note 9, Balance Sheet Components—Accrued Expenses and Other Current Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities as of January 31, 2026.

The following table summarizes the aggregate effect that our material contractual obligations as of January 31, 2026 are expected to have on our cash flows in the periods indicated (in thousands):

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Obligations under contracts that we can cancel without a significant penalty are not included in the table above.

Refer to Note 8, Operating Leases for more detailed information regarding timing of future lease payments, and to Note 11, Commitments and Contingencies—Non-Cancelable Purchase Commitments for more detailed information regarding timing of purchase commitments.

Additionally, our stock repurchase program may represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary.

As of January 31, 2025, approximately $507.4 million remained of the $1,000.0 million authorized by our board of directors.

The current authorization may be suspended or discontinued at any time and does not have a specified expiration date.

Refer to Note 12, Stockholders' Equity—Stock Repurchase Program for further details.

Refer to Note 8, Operating Leases for more detailed information regarding timing of future lease payments, and to Note 10, Commitments and Contingencies—Non-Cancelable Purchase Obligations for more detailed information regarding timing of purchase commitments with terms of twelve months or longer.

Additionally, stock repurchases may represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary.

Refer to Note 11, Stockholders' Equity—Stock Repurchases for further details.

Critical Accounting Estimates

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We may have more than one SSP for individual performance obligations when our data population indicates that pricing practices vary by class of customer (for example, based on the customer’s geographic region).

We update our SSPs at least annually.

We review our SSP at least annually and update when necessary to reflect changes in facts and circumstances.

For further information about our revenue recognition, refer to Note 2, Summary of Significant Accounting Policies—Revenue Recognition and Note 3, Revenue Recognition , included in Part II, Item 8 of this Annual Report on Form 10-K.

We are subject to income taxes in the U.S and in a number of foreign jurisdictions.

We apply significant judgment in determining our provision for (benefit from) income taxes, particularly with regard to assessment of DTAs and evaluation of tax positions.

We apply significant judgment in determining our (benefit from) provision for income taxes, particularly with regard to assessment of DTAs and evaluation of tax positions.

Pursuant to ASC 740, Income Taxes , we account for income taxes using the asset and liability method, whereby DTAs and DTLs are recognized to represent the expected future tax consequences of temporary differences between the financial reporting and income tax bases of assets and liabilities, and for NOL and tax credit carryforwards.

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If and when sufficient positive evidence becomes available to indicate that it is more likely than not at all or a portion of a DTA will be realized, we may release all or a portion of a valuation allowance accordingly.

For example, during fiscal year 2025, based on the available positive and negative evidence including the amount of taxable income in the U.K.

in recent years and our expectations of future profits in the U.K., we determined it to be more likely than not that our U.K.

DTA is realizable and released the $24.7 million valuation allowance associated with the U.K.

However, we continue to maintain full valuation allowances against our U.S.

and Romania DTAs because we believe that it is more likely than not that these DTAs will not be realized, with our valuation allowances totaling $406.3 million as of January 31, 2025.

For example, during fiscal year 2026, based on the available positive and negative evidence including the amount of taxable income in the U.S.

in recent years and our expectations of future profits in the U.S., we determined it to be more likely than not that a significant part of our U.S.

DTA is realizable and therefore released $186.3 million of the valuation allowance associated with the U.S.

federal DTA and $18.6 million of the valuation allowance associated with certain state DTAs.

However, we continue to maintain full valuation allowances against our Romania DTA and some U.S.

state DTAs because we believe that it is more likely than not that these DTAs will not be fully realized.

Our remaining valuation allowances total $150.5 million as of January 31, 2026.

We may release some or all of these valuation allowances in future periods if objective negative evidence of cumulative losses is no longer present and if positive evidence of sustained profitability is established to support the realization of the related DTAs.

Such release would result in a decrease in the provision for income taxes in the period of the release.

Similarly, significant judgement is required in evaluating our tax positions.

Similarly, significant judgment is required in evaluating our tax positions.

In the ordinary course of business, there exist many transactions and calculations for which the ultimate tax settlement is uncertain.

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Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies—Recently A dopted Accounting Pr onoun cem ents and — Re cently Issued Accounting Pronouncements , included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

See Note 2, Summary of Significant Accounting Policies—Recently Adopted Accounting Pronouncements and —Recently Issued Accounting Pronouncements , included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis