What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-26 compared with 2023-03-29 · 453 added, 270 removed, 1024 unchanged (41% of the section changed)

5 unchanged sentences

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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

and its subsidiaries (the “Company”) as of January 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive loss, of redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for each of the three years in the period ended January 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of January 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive loss, of stockholders' equity and of cash flows for each of the three years in the period ended January 31, 2024, including the related notes (collectively referred to as 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 (COSO).

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$ 0.0001 par value per share;

2,500,000 Class A shares authorized, 323,305 and 312,377 shares issued and outstanding as of January 31, 2023 and 2022, respectively;

2,500,000 Class A shares authorized, 334,453 and 323,305 shares issued and outstanding as of January 31, 2024 and 2023, respectively (excluding 200 shares and zero shares of treasury stock held by a wholly-owned subsidiary as of January 31, 2024 and 2023, respectively (1) );

185,461 Class B shares authorized, zero shares issued and outstanding as of each January 31, 2024 and 2023

Treasury stock, at cost;

492 shares and zero shares held as of January 31, 2024 and 2023, respectively

Additional paid-in capital 9,331,238 8,210,750

Accumulated other comprehensive loss

( 8,220 ) ( 38,272 )

Accumulated deficit ( 4,075,604 ) ( 2,716,074 )

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Total liabilities and stockholders’ equity $ 8,223,383 $ 7,722,322

________________

(1) In connection with a business combination completed on December 20, 2023, the Company issued approximately 0.2 million shares of its Class A common stock to one of its wholly-owned subsidiaries, in exchange for a noncontrolling equity interest in the acquired company that was held by the subsidiary prior to this business combination.

These shares are treated as treasury stock for accounting purposes.

See Note 7, “Business Combinations,” for further details.

See accompanying notes to consolidated financial statements.

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No additional shares of Class B common stock will be issued following such conversion.

See Note 12 for further details.

See Note 11, “Equity,” for further details.

See accompanying notes to consolidated financial statements.

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Foreign currency translation adjustments — ( 1,367 ) ( 918 )

Net change in unrealized gains (losses) on available-for-sale debt securities ( 20,619 ) ( 15,807 ) 105

Net change in unrealized gains or losses on available-for-sale debt securities

30,760 ( 20,619 ) ( 15,807 )

Total other comprehensive income (loss)

30,052 ( 21,986 ) ( 16,725 )

Comprehensive loss

( 807,938 ) ( 819,512 ) ( 696,673 )

comprehensive loss attributable to noncontrolling interest

( 1,893 ) ( 821 ) —

Comprehensive loss attributable to Snowflake Inc.

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SNOWFLAKE INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except per share data)

Redeemable Convertible Preferred Stock Class A and Class B

Class A and Class B

Common Stock (1)

Treasury Stock

Capital Accumulated

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Deficit Total Snowflake Inc.

Stockholders’ Equity (Deficit) Noncontrolling Interest Total

Stockholders’ Equity

Noncontrolling Interest Total

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

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287,918 $ 28 — $ — $ 6,175,425 $ 439 $ ( 1,239,421 ) $ 4,936,471 $ — $ 4,936,471

Issuance of Series G-1 and Series G-2 redeemable convertible preferred stock at $ 38.77 per share, net of issuance costs of $ 230

12,350 478,573 — — — — — — — —

Conversion of redeemable convertible preferred stock to common stock upon initial public offering ( 182,271 ) ( 1,415,047 ) 182,271 18 1,415,029 — — 1,415,047 — 1,415,047

Issuance of common stock upon initial public offering and private placements, net of underwriting discounts — — 36,367 4 4,242,280 — — 4,242,284 — 4,242,284

Issuance of common stock upon exercise of stock options 20,903 3 — — 126,998 — — 127,001 — 127,001

Exercise of common stock warrants — — 32 — — — — — — —

Repurchase of early exercised stock options — — ( 40 ) — — — — — — —

Vesting of early exercised stock options and restricted common stock — — — — 5,592 — — 5,592 — 5,592

Issuance of common stock under employee stock purchase plan 370 — — — 52,227 — — 52,227 — 52,227

Vesting of early exercised stock options — — — — 750 — — 750 — 750

Vesting of restricted stock units 3,186 — — — — — — — — —

Stock-based compensation — — — — 629,269 — — 629,269 — 629,269

Other comprehensive income — — — — — 223 — 223 — 223

Other comprehensive loss — — — — — ( 16,725 ) — ( 16,725 ) — ( 16,725 )

Net loss — — — — — — ( 679,948 ) ( 679,948 ) — ( 679,948 )

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Issuance of common stock under employee stock purchase plan 286 — — — 40,931 — — 40,931 — 40,931

Issuance of common stock in connection with a business combination 1,916 — — — 438,916 — — 438,916 — 438,916

Issuance of common stock in connection with a business combination subject to future vesting 409 — — — — — — — — —

Vesting of early exercised stock options — — — — 244 — — 244 — 244

Vesting of restricted stock units 3,348 — — — — — — — — —

Shares withheld related to net share settlement of equity awards ( 1,149 ) — — — ( 184,702 ) — — ( 184,702 ) — ( 184,702 )

Stock-based compensation — — — — 890,950 — — 890,950 — 890,950

Capital contributions from noncontrolling interest holders — — — — — — — — 13,000 13,000

Other comprehensive loss — — — — — ( 21,986 ) — ( 21,986 ) — ( 21,986 )

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Issuance of common stock under employee stock purchase plan 516 — — — 61,234 — — 61,234 — 61,234

Issuance of common stock in connection with a business combination — — 1,916 — 438,916 — — 438,916 — 438,916

Issuance of common stock in connection with a business combination (excluding 200 shares issued to a wholly-owned subsidiary (2) )

896 — — — 174,284 — — 174,284 — 174,284

Issuance of common stock in connection with a business combination subject to future vesting 385 — — — — — — — — —

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Shares withheld related to net share settlement of equity awards ( 2,296 ) — — — ( 387,596 ) — — ( 387,596 ) — ( 387,596 )

Repurchases of common stock as treasury stock

— — ( 500 ) ( 68,299 ) — — — ( 68,299 ) — ( 68,299 )

Repurchases and retirement of common stock ( 3,512 ) — — — — — ( 523,433 ) ( 523,433 ) — ( 523,433 )

Reissuance of treasury stock upon settlement of equity awards

— — 8 1,159 ( 1,132 ) — — 27 — 27

Stock-based compensation — — — — 1,216,374 — — 1,216,374 — 1,216,374

Capital contributions from noncontrolling interest holders — — — — — — — — 13,000 13,000

Other comprehensive loss — — — — — ( 21,986 ) — ( 21,986 ) — ( 21,986 )

Other comprehensive income

— — — — — 30,052 — 30,052 — 30,052

Net loss — — — — — — ( 836,097 ) ( 836,097 ) ( 1,893 ) ( 837,990 )

4 unchanged sentences

No additional shares of Class B common stock will be issued following such conversion.

See Note 12 for further details.

See Note 11, “Equity,” for further details.

(2) In connection with a business combination completed on December 20, 2023, the Company issued approximately 0.2 million shares of its Class A common stock to one of its wholly-owned subsidiaries, in exchange for a noncontrolling equity interest in the acquired company that was held by the subsidiary prior to this business combination.

These shares are treated as treasury stock for accounting purposes.

See Note 7, “Business Combinations,” for further details.

See accompanying notes to consolidated financial statements.

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Net loss $ ( 837,990 ) $ ( 797,526 ) $ ( 679,948 )

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

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 119,903 63,535 21,498

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Stock-based compensation, net of amounts capitalized 1,168,015 861,533 605,095

Net amortization of premiums on investments 3,497 48,002 8,630

Net unrealized losses (gains) on strategic investments in equity securities 46,435 ( 27,621 ) —

Net amortization (accretion) of premiums (discounts) on investments

( 61,525 ) 3,497 48,002

Net realized and unrealized losses (gains) on strategic investments in equity securities

( 46,809 ) 46,435 ( 27,621 )

Deferred income tax ( 26,762 ) ( 26,664 ) ( 717 )

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Deferred revenue 528,029 514,301 526,221

Net cash provided by (used in) operating activities 545,639 110,179 ( 45,417 )

Net cash provided by operating activities

848,122 545,639 110,179

Cash flows from investing activities:

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Capitalized internal-use software development costs ( 34,133 ) ( 24,012 ) ( 12,772 )

Cash paid for business combinations, net of cash and cash equivalents acquired ( 362,609 ) — ( 6,035 )

Cash paid for business combinations, net of cash, cash equivalents, and restricted cash acquired

( 275,706 ) ( 362,609 ) —

Purchases of intangible assets ( 28,744 ) ( 700 ) ( 24,334 )

2 unchanged sentences

Maturities and redemptions of investments 3,670,867 3,657,072 3,842,796

Net cash used in investing activities ( 597,885 ) ( 20,800 ) ( 4,036,645 )

Net cash provided by (used in) investing activities

832,258 ( 597,885 ) ( 20,800 )

Cash flows from financing activities:

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs — — 478,573

Proceeds from initial public offering and private placements, net of underwriting discounts — — 4,242,284

Proceeds from early exercised stock options — — 159

Proceeds from exercise of stock options 57,194 39,893 127,036

Proceeds from issuance of common stock under employee stock purchase plan 61,234 40,931 52,227

Proceeds from repayments of a nonrecourse promissory note — — 2,090

Fiscal Year Ended January 31,

2023 2022 2021

Repurchases of early exercised stock options — — ( 30 )

Taxes paid related to net share settlement of equity awards ( 380,799 ) ( 184,648 ) —

Repurchases of common stock ( 591,732 ) — —

Capital contributions from noncontrolling interest holders — 13,000 —

Fiscal Year Ended January 31,

2024 2023 2022

Payments of deferred purchase consideration for business combinations — ( 1,800 ) ( 1,065 )

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Stock-based compensation included in capitalized software development costs $ 48,181 $ 28,467 $ 23,620

Vesting of early exercised stock options $ 244 $ 750 $ 3,502

Issuance of common stock in connection with a business combination $ 438,916 $ — $ —

Purchases of intangible assets included in accrued expenses and other liabilities $ — $ 4,544 $ —

Issuance of common stock in connection with business combinations

$ 174,284 $ 438,916 $ —

Unpaid taxes related to net share settlement of equity awards included in accrued expenses and other current liabilities $ 6,850 $ 53 $ —

Reconciliation of cash, cash equivalents, and restricted cash:

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Snowflake Inc.

(Snowflake or the Company) provides a cloud-based data platform, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data applications, and share data and data products.

(Snowflake or the Company) provides a cloud-based data platform, which enables customers to consolidate data into a single source of truth to drive meaningful insights, apply AI to solve business problems, build data applications, and share data and data products.

The Company provides its platform through a customer-centric, consumption-based business model, only charging customers for the resources they use.

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The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources.

For information regarding the Company’s revenue by geographic area, see Note 3.

For information regarding the Company’s revenue by geographic area, see Note 3, “Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations.”

The following table presents the Company’s long-lived assets, comprising property and equipment, net and operating lease right-of-use assets, by geographic area (in thousands):

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Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, investments in marketable securities, restricted cash, accounts receivable, and deliverable foreign currency forward contracts.

The Company maintains its cash, cash equivalents, investments in marketable securities, restricted cash and deliverable foreign currency forward contracts with high-quality financial institutions that have investment-grade ratings.

The Company maintains its cash, cash equivalents, investments in marketable securities, restricted cash and foreign currency forward contracts with high-quality financial institutions that have investment-grade ratings.

For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers up to the amounts recorded on the consolidated balance sheets.

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The Company generally does not require collateral from its customers.

For information regarding the Company’s significant customers, see Note 3.

For information regarding the Company’s significant customers, see Note 3, “Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations.”

Foreign Currency

The reporting currency of the Company is the United States dollar.

The functional currency of the Company’s foreign subsidiaries is the U.S.

dollar or the Euro, depending on the nature of the subsidiaries’ activities.

The reporting currency of the Company is the U.S.

The functional currency of the Company’s foreign subsidiaries is primarily the U.S.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured to the functional currency at period-end exchange rates.

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Under capacity arrangements, from which a majority of revenue is derived, the Company typically bills its customers annually in advance of their consumption.

Revenue from on-demand arrangements typically relates to initial consumption as part of customer onboarding and, to a lesser extent, overage consumption beyond a customer’s contracted usage amount or following the expiration of a customer’s contract.

Revenue from on-demand arrangements typically relates to customers with lower usage levels or overage consumption beyond a customer’s contracted usage amount or following the expiration of a customer’s contract.

Revenue from on-demand arrangements represented approximately 3 %, 2 %, and 3 % of the Company’s revenue for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

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For data transfer resources, consumption is based on terabytes of data transferred, the public cloud provider used, and the region to and from which the transfer is executed.

The Company’s revenue also includes professional services and other revenue, which consists primarily of consulting, on-site technical solution services, and training related to the platform.

The Company’s revenue also includes professional services and other revenue, which consists primarily of consulting, technical solution services, and training related to the platform.

Professional services revenue is recognized over time based on input measures, including time and materials costs incurred relative to total costs, with consideration given to output measures, such as contract deliverables, when applicable.

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Instead, each of compute, storage, and data transfer work together to drive consumption on the Company’s platform.

The Company treats its virtual private deployments for customers, professional services, on-site technical solution services, and training each as a separate and distinct performance obligation.

The Company treats its virtual private deployments for customers, professional services, technical solution services, and training each as a separate and distinct performance obligation.

Some customers have negotiated an option to purchase additional capacity at a stated discount.

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Cost of Revenue

Cost of revenue consists primarily of (i) third-party cloud infrastructure expenses incurred in connection with the customers’ use of the Snowflake platform and deploying and maintaining the platform on public clouds, including different regional deployments, (ii) personnel-related costs associated with the Company’s customer support team, engineering team that is responsible for maintaining the Company's service availability and security of its platform, and professional services and training departments, including salaries, benefits, bonuses, and stock-based compensation, and (iii) costs of contracted third-party partners for professional services.

Cost of revenue also includes amortization of internal-use software development costs, amortization of acquired developed technology intangible assets, expenses associated with software and subscription services dedicated for use by the Company’s customer support team and engineering team responsible for maintaining the Company's service, and allocated overhead.

Cost of revenue consists primarily of (i) third-party cloud infrastructure expenses incurred in connection with the customers’ use of the Snowflake platform and the deployment and maintenance of the platform on public clouds, including different regional deployments, and (ii) personnel-related costs associated with the Company’s customer support team, engineering team that is responsible for maintaining the Company's service availability and security of its platform, and professional services and training departments, including salaries, benefits, bonuses, and stock-based compensation.

Cost of revenue also includes amortization of capitalized internal-use software development costs, amortization of acquired intangible assets, costs of contracted third-party partners for professional services, expenses associated with software and subscription services dedicated for use by the Company’s customer support team and engineering team responsible for maintaining the Company's service, and allocated overhead.

Research and Development Costs

Research and development costs are expensed as incurred, unless they qualify as internal-use software development costs.

Research and development costs are expensed as incurred, unless they qualify as capitalized internal-use software development costs.

Research and development expenses consist primarily of personnel-related expenses associated with the Company’s research and development staff, including salaries, benefits, bonuses, and stock-based compensation.

Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses incurred in developing the Company’s platform, expenses associated with computer equipment, software and subscription services dedicated for use by the Company’s research and development organization, and allocated overhead.

Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses incurred in developing the Company’s platform, amortization of acquired intangible assets, software and subscription services dedicated for use by the Company’s research and development organization, and allocated overhead.

Advertising Costs

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Stock-Based Compensation

The Company measures and recognizes compensation expense for all stock-based awards, including stock options, restricted stock units (RSUs), restricted common stock granted to employees, non-employee directors, and other service providers, and stock purchase rights granted under the Employee Stock Purchase Plan (ESPP Rights) to employees, based on the estimated fair value of the awards on the date of grant.

The Company’s equity awards include stock options, restricted stock unit awards (RSUs), restricted common stock granted to employees, non-employee directors, and other service providers, and stock purchase rights granted under the Employee Stock Purchase Plan (ESPP Rights) to employees.

Equity awards are reviewed in determining whether such awards are equity-classified or liability-classified.

Stock-based compensation related to equity-classified awards is measured based on the estimated fair value of the awards on the date of grant and generally recognized on a straight-line basis over the requisite service period.

The fair value of each stock option granted and ESPP Rights is estimated using the Black-Scholes option-pricing model.

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The fair value of each RSU is based on the fair value of the Company’s common stock on the date of grant.

Stock-based compensation is generally recognized on a straight-line basis over the requisite service period.

For awards with both a service-based vesting condition and a performance-based vesting condition, the stock-based compensation is recognized using an accelerated attribution method from the time it is deemed probable that the vesting condition will be met through the time the service-based vesting condition has been achieved.

If an award contains a provision whereby vesting is accelerated upon a change in control, the Company recognizes stock-based compensation expense on a straight-line basis, as a change in control is considered to be outside of the Company’s control and is not considered probable until it occurs.

For equity-classified awards with both service-based and performance-based vesting conditions, the stock-based compensation is recognized using an accelerated attribution method over the requisite service period, based on the Company’s periodic assessment of the probability that the performance condition will be achieved.

Certain RSUs with both service-based and performance-based vesting conditions are liability-classified, as the monetary value of the obligation under each potential outcome of the performance condition is predominantly based on a fixed monetary amount known at inception and will be settled in a variable number of the Company’s common stock.

The fair value of these awards is estimated using the Monte Carlo simulation model, which requires the use of various assumptions, including the expected stock price volatility and risk-free interest rate.

These awards are subsequently remeasured to the fair value at each reporting date until the number of these awards eligible to vest is fixed, at which time these awards will be reclassified to equity.

Stock-based compensation associated with these awards is recognized based on the probable outcome of the performance condition, using an accelerated attribution method over the requisite service period, with a cumulative catch-up adjustment recognized for changes in the fair value estimated at each reporting date.

If an award contains a provision whereby vesting is accelerated upon a change in control, such a change in control is considered to be outside of the Company’s control and is not considered probable until it occurs.

Forfeitures are accounted for in the period in which they occur.

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Class A and Class B Common Stockholders

As discussed in Note 12, on March 1, 2021, all shares of the Company’s then-outstanding Class B common stock were automatically converted into the same number of shares of Class A common stock pursuant to the terms of the Company’s amended and restated certificate of incorporation.

As discussed in Note 11, “Equity,” on March 1, 2021, all shares of the Company’s then-outstanding Class B common stock were automatically converted into the same number of shares of Class A common stock pursuant to the terms of the Company’s amended and restated certificate of incorporation.

Basic and diluted net loss per share attributable to Snowflake Inc.

common stockholders is computed in conformity with the two-class method required for participating securities.

The Company considered unvested common stock and, prior to the automatic conversion of all of its outstanding redeemable convertible preferred stock into Class B common stock in connection with its initial public offering (IPO) in September 2020, all series of its redeemable convertible preferred stock to be participating securities, as the holders of such stock have the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend is declared on common stock.

Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the holders of such stock do not have a contractual obligation to share in the Company’s losses.

The Company considers unvested common stock to be participating securities, as the holders of such stock have the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend is declared on common stock.

Basic net loss per share attributable to Snowflake Inc.

1 unchanged sentence

common stockholders by the weighted-average number of shares of Snowflake Inc.

common stock outstanding during the period.

common stock outstanding during the period, which excludes treasury stock.

Diluted net loss per share attributable to Snowflake Inc.

1 unchanged sentence

common stock equivalents to the extent they are dilutive.

For purposes of this calculation, redeemable convertible preferred stock, stock options, restricted common stock, RSUs, ESPP Rights, early exercised stock options, and common stock warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to Snowflake Inc.

For purposes of this calculation, stock options, RSUs, restricted common stock, ESPP Rights, and early exercised stock options are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to Snowflake Inc.

common stockholders as their effect is anti-dilutive for all periods presented.

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Fair Value of Financial Instruments

The Company’s primary financial instruments include cash equivalents, investments in marketable securities, strategic investments, restricted cash, accounts receivable, accounts payable and accrued expenses.

The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term nature.

See Note 5 for information regarding the fair value of the Company’s investments in marketable securities and strategic investments.

See Note 5, “Fair Value Measurements,” for information regarding the fair value of the Company’s investments in marketable securities, strategic investments, and derivative assets and liabilities.

Derivative Financial Instruments

During the fiscal year ended January 31, 2023, the Company began using derivative financial instruments to manage its exposure to certain foreign currency exchange risks associated with certain intercompany balances denominated in currencies other than the U.S.

These derivative financial instruments consist of deliverable foreign currency forward contracts with maturities of one month or less and are not designated as hedging instruments.

As such, all changes in the fair value of these derivative instruments are recorded in other income (expense), net on the consolidated statements of operations, and are intended to offset the foreign currency transaction gains or losses associated with the underlying intercompany balances.

The resulting derivative assets and liabilities are measured at fair value using Level 2 inputs and presented as prepaid expenses and other current assets and accrued expenses and other current liabilities, as applicable, on the consolidated balance sheets.

The Company’s derivative financial instruments, which are carried at fair value on the consolidated balance sheets, consist of foreign currency forward contracts as described below:

Non-Designated Hedges— The Company utilizes foreign currency forward contracts to manage its exposure to certain foreign currency exchange risks primarily associated with (i) a portion of its net outstanding monetary assets and liabilities positions and (ii) certain intercompany balances denominated in currencies other than the U.S.

These foreign currency forward contracts have maturities of twelve months or less and are not designated as hedging instruments (Non-Designated Hedges).

Cash flows at settlement of such foreign currency forward contracts are classified as operating activities in the consolidated statement of cash flows.

As of January 31, 2023, all of the Company’s derivative assets and liabilities were settled, and the related realized gains (losses) were not material for the fiscal year ended January 31, 2023.

Cash Flow Hedge— During the fiscal year ended January 31, 2024, the Company began utilizing foreign currency forward contracts to manage the volatility in cash flows associated with (i) certain forecasted capital expenditures and (ii) a portion of its forecasted operating expenses denominated in certain currencies other than the U.S.

These foreign currency forward contracts have a maturity of twelve months or less and are designated and qualify as cash flow hedges, and, in general, closely match the underlying hedged forecasted transactions in duration.

The effectiveness of the cash flow hedges is assessed quantitatively using regression at inception and at each reporting date.

The effective portion of these foreign currency forward contracts’ gains and losses resulting from changes in fair value is recorded in accumulated other comprehensive income (loss) on the consolidated balance sheets, and subsequently reclassified into the same line items on the Company’s consolidated statements of operations as the underlying hedged forecasted transactions in the same period that such transactions affect earnings.

In the event the underlying forecasted transactions do not occur, or it becomes probable that they will not occur within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified immediately from accumulated other comprehensive income (loss) to net income (loss) in the Company’s consolidated financial statements.

Cash flows from such foreign currency forward contracts are classified in the same category on the Company’s consolidated statements of cash flows as the cash flows from the underlying hedged forecasted transactions.

These derivative financial instruments did not have a material impact on the Company’s consolidated financial statements for any period presented.

Accounts Receivable, Net

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Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified.

Internal-Use Software Development Costs

Capitalized Internal-Use Software Development Costs

The Company capitalizes qualifying internal-use software development costs, primarily related to its cloud platform.

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These costs are amortized over the estimated useful life of the software, which is three years , on a straight-line basis.

Cost and accumulated amortization of fully amortized capitalized internal-use software development costs are removed from the consolidated balance sheets when the related software is no longer in use.

The amortization of capitalized costs related to the Company’s platform applications is primarily included in cost of revenue in the consolidated statements of operations.

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Costs of maintenance or repairs that do not extend the lives of the respective assets are charged to expenses as incurred.

Cost and accumulated depreciation and amortization of fully depreciated property and equipment are removed from the consolidated balance sheets when they are no longer in use.

Deferred Commissions

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Amortization expense is included in sales and marketing expenses in the consolidated statements of operations.

As a result of modifications to the Company’s sales compensation plan during the fiscal year ended January 31, 2021, a portion of the sales commissions paid to the sales force is earned based on the rate of the customers’ consumption of the Company’s platform, in addition to a portion of the commissions earned upon the origination of the new customer or customer expansion contract.

A portion of the sales commissions paid to the sales force is earned based on the level of the customers’ consumption of the Company’s platform, and a portion of the commissions paid to the sales force is earned upon the origination of the customer contracts.

Sales commissions tied to customers’ consumption are not considered incremental costs and are expensed in the same period as they are earned.

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If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group.

The Company did not recognize any material impairments of long-lived assets for all periods presented.

Goodwill and indefinite-lived intangible assets are not amortized but rather tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.

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Capacity arrangements are generally billed and paid in advance of satisfaction of performance obligations, and the Company’s on-demand arrangements are billed in arrears generally on a monthly basis.

Deferred revenue also includes amounts that have been invoiced but not yet collected, classified as accounts receivable, when the Company has an enforceable right to invoice for capacity arrangements.

Deferred revenue also includes amounts that have been invoiced but not yet collected, classified as accounts receivable, when the Company has an enforceable right to consideration for capacity arrangements.

Deferred revenue relating to the Company’s capacity arrangements that have a contractual expiration date of less than 12 months are classified as current.

2 unchanged sentences

As such, the current or non-current classification of deferred revenue may not reflect the actual timing of revenue recognition.

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 , which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently.

For trade receivables, loans, and other financial instruments, the Company is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable.

Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

The Company early adopted this guidance effective February 1, 2021 on a modified retrospective basis, and the adoption did not result in any cumulative effect adjustment in its consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by this new guidance.

The Company adopted this guidance effective February 1, 2021 on a prospective basis, and the adoption did not have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes in order to reduce the cost and complexity of its application.

The Company early adopted this guidance effective February 1, 2021, and the adoption did not have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contracts.

Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date.

The Company early adopted this guidance upon issuance to all business combinations that occur on or after the date of adoption, and the adoption did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss, and an amount for other segment items by reportable segment and a description of its composition.

This guidance also requires disclosures on the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources, and interim disclosures of reportable segment’s profit or loss and assets.

This guidance is effective for the Company for its fiscal year beginning February 1, 2024 and interim periods within its fiscal year beginning February 1, 2025 on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires annual disclosure on disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

This guidance is effective for the Company for its fiscal year beginning February 1, 2025 on a prospective basis.

Early adoption and retrospective application are permitted.

The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

Recent Securities and Exchange Commission (SEC) Final Rules Not Yet Adopted

In March 2024, the SEC adopted final rules under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which requires registrants to provide certain climate-related information in their registration statements and annual reports.

The rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.

The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions.

In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements.

These requirements are effective for the Company in various fiscal years, starting with its fiscal year beginning February 1, 2025.

Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing.

The Company is currently evaluating the impact of these final rules on its consolidated financial statements and disclosures.

Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations

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Accounts Receivable, Net

As of January 31, 2023 and 2022, allowance for credit losses of $ 2.2 million and $ 1.3 million, was included in the Company’s accounts receivable, net balance, respectively.

As of January 31, 2024 and 2023, allowance for credit losses of $ 2.5 million and $ 2.2 million, respectively, was included in the Company’s accounts receivable, net balance.

Significant Customers

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Deferred Revenue

The Company recognized $ 974.3 million, $ 535.8 million, and $ 257.9 million of revenue for the fiscal years ended January 31, 2023, 2022, and 2021, respectively, from the deferred revenue balances as of January 31, 2022, 2021, and 2020, respectively.

The Company recognized $ 1.4 billion, $ 974.3 million, and $ 535.8 million of revenue for the fiscal years ended January 31, 2024, 2023, and 2022, respectively, from the deferred revenue balances as of January 31, 2023, 2022, and 2021, respectively.

Remaining Performance Obligations

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Cash equivalents:

government securities $ 742,235 $ 1 $ ( 2 ) $ 742,234

Money market funds 533,211 — — 533,211

Commercial paper 9,305 — ( 1 ) 9,304

Corporate notes and bonds 6,902 1 — 6,903

Certificates of deposit 3,045 — ( 1 ) 3,044

Time deposits 56,263 — — 56,263

Total cash equivalents 1,331,709 1 ( 2 ) 1,331,708

Corporate notes and bonds 1,549,151 1,959 ( 3,394 ) 1,547,716

Commercial paper 883,023 272 ( 1,947 ) 881,348

government and agency securities 877,496 574 ( 4,653 ) 873,417

Commercial paper 353,525 154 ( 131 ) 353,548

Certificates of deposit 224,869 271 ( 15 ) 225,125

5 unchanged sentences

Money market funds (1)

$ 520,138 $ — $ — $ 520,138

Commercial paper 9,305 — ( 1 ) 9,304

government securities 36,997 — ( 2 ) 36,995

Corporate notes and bonds 6,902 1 — 6,903

Certificates of deposit 3,045 — ( 1 ) 3,044

Total cash equivalents (1)

539,390 1 ( 2 ) 539,389

Corporate notes and bonds 2,124,454 2,096 ( 23,470 ) 2,103,080

4 unchanged sentences

Total cash equivalents and investments (1)

$ 4,716,373 $ 2,754 $ ( 38,749 ) $ 4,680,378

________________

(1) Includes a reclassification of $ 141.0 million from cash to cash equivalents for the money market funds balance as of January 31, 2023, as presented in the Annual Report on Form 10-K filed with the SEC on March 29, 2023.

Such reclassification did not impact the Company’s consolidated balance sheet as of January 31, 2023 or its consolidated statement of cash flows for the fiscal year ended January 31, 2023.

The Company included $ 24.2 million and $ 19.4 million of interest receivable in prepaid expenses and other current assets on the consolidated balance sheets as of January 31, 2024 and 2023, respectively.

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As of January 31, 2024, the contractual maturities of the Company’s available-for-sale marketable debt securities did not exceed 36 months.

The estimated fair values of available-for-sale marketable debt securities, by remaining contractual maturity, are as follows (in thousands):

The estimated fair values of available-for-sale marketable debt securities, classified as short-term or long-term investments on the Company’s consolidated balance sheets, by remaining contractual maturity, is as follows (in thousands):

January 31, 2024

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Cash equivalents:

Commercial paper $ 9,304 $ ( 1 ) $ — $ — $ 9,304 $ ( 1 )

Certificates of deposit 3,044 ( 1 ) — — 3,044 ( 1 )

government securities $ 338,893 $ ( 2 ) $ — $ — $ 338,893 $ ( 2 )

Total cash equivalents 338,893 ( 2 ) — — 338,893 ( 2 )

12 unchanged sentences

Commercial paper $ 9,304 $ ( 1 ) $ — $ — $ 9,304 $ ( 1 )

government securities 36,995 ( 2 ) — — 36,995 ( 2 )

Corporate notes and bonds 7,629 ( 1 ) — — 7,629 ( 1 )

Certificates of deposit 3,044 ( 1 ) — — 3,044 $ ( 1 )

Total cash equivalents 12,348 ( 2 ) — — 12,348 ( 2 )

Corporate notes and bonds 899,655 ( 8,521 ) 736,431 ( 14,949 ) 1,636,086 ( 23,470 )

Commercial paper 653,827 ( 821 ) — — 653,827 ( 821 )

government and agency securities 387,207 ( 3,157 ) 232,771 ( 9,063 ) 619,978 ( 12,220 )

Commercial paper 561,793 ( 1,947 ) — — 561,793 ( 1,947 )

Certificates of deposit 256,428 ( 1,110 ) — — 256,428 ( 1,110 )

2 unchanged sentences

For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis.

The decline in fair value of these securities due to credit related factors was not material as of January 31, 2023 and 2022.

See Note 5 for information regarding the Company’s strategic investments.

The decline in fair values of these securities due to credit related factors was not material as of January 31, 2024 and 2023.

See Note 5, “Fair Value Measurements,” for information regarding the Company’s strategic investments.

Fair Value Measurements

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Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2023 (in thousands):

The following table presents the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis as of January 31, 2024 (in thousands):

Cash equivalents:

government securities $ — $ 742,234 $ 742,234

Money market funds 533,211 — 533,211

Commercial paper — 9,304 9,304

Corporate notes and bonds — 6,903 6,903

Certificates of deposit — 3,044 3,044

Time deposits — 56,263 56,263

Short-term investments:

Corporate notes and bonds — 939,727 939,727

government and agency securities — 573,780 573,780

Commercial paper — 353,548 353,548

Certificates of deposit — 216,444 216,444

government and agency securities — 440,128 440,128

Long-term investments:

2 unchanged sentences

Certificates of deposit — 8,681 8,681

Derivative assets:

Foreign currency forward contracts

$ 533,211 $ 3,798,363 $ 4,331,574

Derivative liabilities:

Foreign currency forward contracts

$ — $ ( 745 ) $ ( 745 )

Total liabilities

$ — $ ( 745 ) $ ( 745 )

The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2023 (in thousands):

1 unchanged sentence

Money market funds (1)

$ 520,138 $ — $ 520,138

Commercial paper — 9,304 9,304

government securities — 36,995 36,995

Corporate notes and bonds — 6,903 6,903

Certificates of deposit — 3,044 3,044

Short-term investments:

1 unchanged sentence

Commercial paper — 881,348 881,348

government and agency securities — 116,712 116,712

Certificates of deposit — 445,194 445,194

government and agency securities — 440,128 440,128

Long-term investments:

3 unchanged sentences

$ 520,138 $ 4,160,240 $ 4,680,378

________________

Such reclassification did not impact the Company’s consolidated balance sheet as of January 31, 2023 or its consolidated statement of cash flows for the fiscal year ended January 31, 2023.

The Company determines the fair value of its security holdings based on pricing from the Company’s service providers and market prices from industry-standard independent data providers.

14 unchanged sentences

Total strategic investments—included in other assets $ 234,365 $ 202,936

The following table summarizes the unrealized gains and losses included in the carrying value of the Company’s strategic investments in equity securities held as of January 31, 2023 (in thousands):

The following table summarizes the realized and unrealized gains and losses included in the carrying value of the Company’s strategic investments in equity securities held as of January 31, 2024 (in thousands):

Fiscal Year Ended January 31,

Non-marketable equity securities under Measurement Alternative:

2024 2023 2022

Unrealized gains (losses) on non-marketable equity securities under Measurement Alternative:

Upward adjustments $ — $ 4,125 $ 32,975

Impairments ( 3,101 ) ( 38,036 ) —

Marketable equity securities:

Net unrealized losses ( 12,524 ) ( 5,354 )

Net unrealized gains (losses) on marketable equity securities

15,197 ( 12,524 ) ( 5,354 )

Net unrealized gains (losses) on strategic investments in equity securities

12,096 ( 46,435 ) 27,621

Realized gains on non-marketable equity securities under Measurement Alternative (1)

Total—included in other income (expense), net $ 46,809 $ ( 46,435 ) $ 27,621

During the fiscal year ended January 31, 2021, the Company did not have any strategic investments in marketable equity securities and did not record any upward or downward adjustments, or impairments, on non-marketable equity securities under Measurement Alternative.

No realized gains or losses were recognized on the Company’s strategic investments in equity securities during any of periods presented.

The cumulative upward adjustments and the cumulative impairments to the carrying value of the non-marketable equity securities accounted for using the Measurement Alternative that the Company held as of January 31, 2023 were $ 37.1 million and $ 38.0 million, respectively.

________________

(1) Includes primarily a remeasurement gain of $ 34.0 million recognized on a previously held equity interest as a result of a business combination completed during the fiscal year ended January 31, 2024.

See Note 7, “Business Combinations,” for further details.

The cumulative upward adjustments and the cumulative impairments to the carrying value of the non-marketable equity securities accounted for using the Measurement Alternative held by the Company as of January 31, 2024 were $ 37.1 million and $ 41.1 million, respectively.

Property and Equipment, Net

14 unchanged sentences

Depreciation and amortization expense was $ 37.7 million, $ 24.7 million, and $ 13.7 million for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

Included in these amounts were the amortization of capitalized internal-use software development costs of $ 10.2 million, $ 4.2 million, and $ 2.9 million for the fiscal years ended January 31, 2023, 2022, and 2021, respectively.

Included in these amounts was the amortization of capitalized internal-use software development costs of $ 19.0 million, $ 10.2 million, and $ 4.2 million for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

During the fiscal year ended January 31, 2024, the Company recognized impairment charges of $ 7.1 million related to its capitalized internal-use software development costs previously included in construction in-progress that were no longer probable of being completed.

Such impairment charges were recorded as research and development expenses on the consolidated statements of operations.

Impairment charges related to capitalized internal-use software development costs recognized during the fiscal years ended January 31, 2023 and 2022 were not material.

Business Combinations

Streamlit, Inc.

On March 31, 2022, the Company acquired all outstanding stock of Streamlit, Inc.

(Streamlit), a privately-held company which provides an open-source framework for creating and deploying data applications.

The Company acquired Streamlit primarily for its talent and developer community.

Samooha, Inc.

On December 20, 2023, the Company acquired all outstanding stock of Samooha, Inc.

(Samooha), a privately-held company which developed data clean room technology that enabled multiple parties to securely collaborate on sensitive data.

The Company acquired Samooha for its talent and developed technology.

The Company has accounted for this transaction as a business combination.

The acquisition date fair value of the purchase consideration was $ 650.8 million, which was comprised of the following (in thousands):

Prior to this business combination, the Company, via one of its wholly-owned subsidiaries (the Investing Subsidiary), held a noncontrolling equity interest in Samooha, which was accounted for using the Measurement Alternative with a carrying amount of $ 4.8 million (the Previously Held Equity Interest).

In connection with this business combination, the Company remeasured the Previously Held Equity Interest at the date of the acquisition and recognized a gain of $ 34.0 million, which was recorded in other income (expense), net on the Company’s consolidated statement of operations for the fiscal year ended January 31, 2024.

The acquisition date fair value of the preliminary purchase consideration was $ 219.0 million, which was comprised of the following (in thousands):

Estimated Fair Value

Cash $ 211,839

Deferred cash consideration

Common stock (1)

Fair value of previously held equity interest (2)

________________

(1) Approximately 1.9 million shares of the Company’s Class A common stock were included in the purchase consideration and the fair values of these shares were determined based on the closing market price of $ 229.13 per share on the acquisition date.

In addition, in connection with this business combination, the Company issued to Streamlit’s three founders a total of 0.4 million shares of the Company’s Class A common stock in exchange for a portion of their Streamlit stock.

These shares are subject to vesting agreements pursuant to which the shares will vest over three years , subject to each founder’s continued employment with the Company or its affiliates.

The $ 93.7 million fair value of these shares are accounted for as post-combination stock-based compensation over the requisite service period of three years .

See Note 12 for further discussion.

(1) Approximately 0.9 million shares of the Company’s Class A common stock, issued to selling stockholders that were not affiliated with the Company, were included in the purchase consideration, and the fair values of these shares were determined based on the closing market price of $ 194.28 per share on the acquisition date.

(2) In connection with this business combination, the Company issued approximately 0.2 million shares of its Class A common stock to the Investing Subsidiary in exchange for the Previously Held Equity Interest.

The fair values of these shares were determined based on the closing market price of $ 194.28 per share on the acquisition date.

These shares are treated as treasury stock for accounting purposes.

In connection with this business combination, the Company also issued to certain of Samooha’s employees a total of 0.4 million shares of the Company’s Class A common stock in exchange for a portion of their Samooha stock.

These shares are subject to vesting agreements pursuant to which the shares will vest over four years , subject to each of these employees’ continued employment with the Company or its affiliates.

The $ 74.8 million fair value of these shares is accounted for as post-combination stock-based compensation over the requisite service period of four years .

In addition, the Company agreed to grant under its 2020 Equity Incentive Plan certain RSUs that contain both post-combination service-based and performance-based vesting conditions to eligible existing or future employees.

See Note 11, “Equity,” for further discussion.

The following table summarizes the preliminary allocation of purchase consideration to assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition:

Estimated Fair Value

(in thousands) Estimated Useful Life

Cash and cash equivalents

Goodwill 189,838

Developed technology intangible asset

Other net tangible liabilities

Deferred tax liabilities, net (1)

Total $ 219,035

________________

(1) Deferred tax liabilities, net primarily relates to the intangible asset acquired and the amount presented is net of deferred tax assets.

The fair value of the developed technology intangible asset was estimated using the discounted cash flow method, which utilizes assumptions including projected future revenue generated from the acquired developed technology, projected profit margin, discount rate, and technology migration curve.

The excess of purchase consideration over the preliminary fair values of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

The Company believes the goodwill balance associated with this business combination represents the synergies expected from expanded market opportunities when integrating the acquired developed technologies with the Company’s offerings.

During the three months ended July 31, 2023, the Company acquired all outstanding stock of Neeva Inc.

and its equity investee (collectively, Neeva), for $ 185.4 million in cash.

The Company acquired Neeva primarily for its talent and developed technology.

The Company has accounted for this transaction as a business combination.

The purchase consideration was preliminarily allocated to assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition.

5 unchanged sentences

Goodwill 63,138

Developer community intangible asset 150,000 5

Developed technology intangible assets 83,000 5

Other net tangible liabilities ( 790 )

3 unchanged sentences

(1) Deferred tax liabilities, net primarily relates to the intangible asset acquired and the amount presented is net of deferred tax assets.

The fair value of the developer community intangible asset was estimated using the replacement cost method which utilizes assumptions for the cost to replace it, such as time and resources required, as well as a theoretical profit margin and opportunity cost.

The excess of purchase consideration over the preliminary fair value of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

The fair values of the developed technology intangible assets were estimated using the replacement cost method, which utilizes assumptions for the cost to replace it, such as time and resources required, as well as a theoretical profit margin and opportunity cost.

The excess of purchase consideration over the preliminary fair values of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

Acquisition-related costs of $ 1.9 million associated with this business combination were recorded as a general and administrative expense during the fiscal year ended January 31, 2023.

From the date of acquisition through January 31, 2023, revenue attributable to Streamlit was not material.

It was impracticable to determine the effect on the Company's net loss attributable to Streamlit as its operations have been integrated into the Company's ongoing operations since the date of acquisition.

On September 23, 2022, the Company acquired all outstanding stock of Applica Sp.

(Applica), a privately-held company which provides an artificial intelligence platform for document understanding, for $ 174.7 million in cash.

The Company acquired Applica primarily for its talent and developed technology.

Mountain US Corporation (formerly known as Mobilize.Net Corporation)

On February 10, 2023, the Company acquired all outstanding stock of Mountain US Corporation (formerly known as Mobilize.Net Corporation) (Mountain), a privately-held company which provided a suite of tools for efficiently migrating databases to the Data Cloud, for $ 76.3 million in cash.

The Company acquired Mountain primarily for its talent and developed technology.

The Company has accounted for this transaction as a business combination.

4 unchanged sentences

(in thousands) Estimated Useful Life

Cash and cash equivalents $ 11,594

Goodwill 46,426

6 unchanged sentences

The fair value of the developed technology intangible asset was estimated using the replacement cost method, which utilizes assumptions for the cost to replace it, such as time and resources required, as well as a theoretical profit margin and opportunity cost.

The excess of purchase consideration over the preliminary fair value of identifiable net assets acquired was recorded as goodwill, which is generally not deductible for income tax purposes.

The excess of purchase consideration over the preliminary fair values of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

The Company believes the goodwill balance associated with this business combination represents the synergies expected from strengthening enablement capabilities and the acceleration of legacy migrations to the Data Cloud, as well as expanding the Company’s professional services footprint.

LeapYear Technologies, Inc.

On February 10, 2023, the Company acquired all outstanding stock of LeapYear Technologies, Inc.

(LeapYear), a privately-held company which provided a differential privacy platform, for $ 62.0 million in cash.

The Company acquired LeapYear primarily for its talent and developed technology.

The Company has accounted for this transaction as a business combination.

The purchase consideration was preliminarily allocated to assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition.

During the three months ended January 31, 2024, the Company recorded a measurement period adjustment which did not have a material impact on goodwill.

The updated preliminary allocation of purchase consideration, inclusive of measurement period adjustments, was as follows:

Estimated Fair Value

(in thousands) Estimated Useful Life

Cash, cash equivalents, and restricted cash $ 3,563

Goodwill 9,029

Developed technology intangible asset 53,000 5

Other net tangible liabilities ( 1,434 )

Deferred tax liabilities, net (1)

Total $ 62,008

________________

(1) Deferred tax liabilities, net primarily relates to the intangible asset acquired and the amount presented is net of deferred tax assets.

The excess of purchase consideration over the preliminary fair values of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

Acquisition-related costs of $ 3.4 million associated with this business combination were recorded as a general and administrative expense during the fiscal year ended January 31, 2023.

The results of operations of Applica from the date of acquisition, which were not material, have been included in the Company’s consolidated statements of operations for the fiscal year ended January 31, 2023.

Other Business Combination

1 unchanged sentence

The Company has accounted for this transaction as a business combination.

In allocating the aggregate purchase consideration based on the estimated fair values, the Company recorded $ 1.6 million of cash acquired, $ 4.9 million as a developer community intangible asset (to be amortized over an estimated useful life of five years ), and $ 10.1 million as goodwill, which is not deductible for income tax purposes.

The excess of purchase consideration over the fair values of net tangible and identifiable assets acquired was recorded as goodwill.

The Company believes the goodwill balance associated with this business combination is primarily attributed to the assembled workforce and expected synergies arising from the acquisition.

Acquisition-related costs, recorded as general and administrative expenses, associated with each of the business combinations above were not material during the fiscal year ended January 31, 2024.

From the respective dates of acquisition through January 31, 2024, revenue attributable to each of the companies acquired in fiscal 2024, included in the Company’s consolidated statements of operations for the fiscal year ended January 31, 2024 was not material.

It was impracticable to determine the effect on the Company’s net loss attributable to each of the companies acquired in fiscal 2024 as these operations have been integrated into the Company’s ongoing operations since the respective dates of acquisition.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information summarizes the combined results of operations of the Company, and both of Samooha and Neeva, as if each had been acquired as of February 1, 2022 (in thousands):

Fiscal Year Ended January 31,

Revenue $ 2,806,739 $ 2,065,730

Net loss $ ( 932,308 ) $ ( 937,873 )

The pro forma financial information for all periods presented above has been calculated after adjusting the results of operations of Samooha and Neeva to reflect certain business combination effects, including the amortization of the acquired intangible asset, stock-based compensation, income tax impact, and acquisition-related costs incurred by the Company, Samooha, and Neeva as though these business combinations occurred as of February 1, 2022, the beginning of the Company’s fiscal 2023.

The historical consolidated financial information in the unaudited pro forma table above has been adjusted in the pro forma combined financial results to give effect to pro forma events that are directly attributable to these business combinations, reasonably estimable, and factually supportable.

The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if these business combinations had taken place as of February 1, 2022.

Pro forma financial information has not been presented as the effects of each of the Mountain, LeapYear, and other fiscal 2024 business combinations were not material to the Company’s consolidated financial statements.

On September 23, 2022, the Company acquired all outstanding stock of Applica Sp.

(Applica), a privately-held company which provided an artificial intelligence platform for document understanding, for $ 174.7 million in cash.

The Company acquired Applica primarily for its talent and developed technology.

The Company has accounted for this transaction as a business combination.

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values.

The allocation of purchase consideration, inclusive of measurement period adjustments, was as follows:

Estimated Fair Value

(in thousands) Estimated Useful Life

Goodwill 146,444

Developed technology intangible asset 35,000 5

Other net tangible liabilities ( 612 )

Deferred tax liabilities, net (1)

Total $ 174,691

________________

(1) Deferred tax liabilities, net primarily relates to the intangible asset acquired and the amount presented is net of deferred tax assets.

The excess of purchase consideration over the preliminary fair values of identifiable net assets acquired was recorded as goodwill, which is generally not deductible for income tax purposes.

Acquisition-related costs of $ 3.4 million associated with this business combination were recorded as general and administrative expenses during the fiscal year ended January 31, 2023.

Streamlit, Inc.

On March 31, 2022, the Company acquired all outstanding stock of Streamlit, Inc.

(Streamlit), a privately-held company which provided an open-source framework for creating and deploying data applications.

The Company acquired Streamlit primarily for its talent and developer community.

The Company has accounted for this transaction as a business combination.

The acquisition date fair value of the purchase consideration was $ 650.8 million, which was comprised of the following (in thousands):

Estimated Fair Value

Cash $ 211,839

Common stock (1)

________________

These shares are subject to vesting agreements pursuant to which the shares will vest over three years , subject to each founder’s continued employment with the Company or its affiliates.

The $ 93.7 million fair value of these shares is accounted for as post-combination stock-based compensation over the requisite service period of three years .

See Note 11, “Equity,” for further discussion.

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values.

The allocation of purchase consideration, inclusive of measurement period adjustments, was as follows:

Estimated Fair Value

(in thousands) Estimated Useful Life

Cash and cash equivalents $ 33,914

Goodwill 494,411

Developer community intangible asset 150,000 5

Other net tangible liabilities ( 659 )

Deferred tax liabilities, net (1)

Total $ 650,755

________________

(1) Deferred tax liabilities, net primarily relates to the intangible asset acquired and the amount presented is net of deferred tax assets.

The excess of purchase consideration over the fair values of identifiable net assets acquired was recorded as goodwill, which is not deductible for income tax purposes.

Acquisition-related costs of $ 1.9 million associated with this business combination were recorded as general and administrative expenses during the fiscal year ended January 31, 2023.

Other Business Combination

During the fiscal year ended January 31, 2023, the Company acquired all outstanding stock of a privately-held company for $ 10.4 million in cash.

The Company has accounted for this transaction as a business combination.

In allocating the aggregate purchase consideration based on the estimated fair values, the Company recorded $ 2.0 million as a developed technology intangible asset (to be amortized over an estimated useful life of five years ), $ 0.3 million of net tangible assets acquired, and $ 8.1 million as goodwill, which is not deductible for income tax purposes.

The excess of purchase consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill.

The excess of purchase consideration over the fair values of net tangible and identifiable assets acquired was recorded as goodwill.

The Company believes the goodwill balance associated with this business combination is primarily attributed to the assembled workforce and expected synergies arising from the acquisition.

Acquisition-related costs associated with this business combination were not material for the fiscal year ended January 31, 2023, and were recorded as a general and administrative expense in the consolidated statements of operations.

From the date of acquisition through January 31, 2023, revenue attributable to this business combination was not material.

It was impracticable to determine the effect on the Company's net loss attributable to this business combination as its operations have been integrated into the Company's ongoing operations since the date of acquisition.

Acquisition-related costs, recorded as general and administrative expenses, associated with this business combination were not material for the fiscal year ended January 31, 2023.

Unaudited Pro Forma Financial Information

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The historical consolidated financial information in the unaudited pro forma tables above has been adjusted in the pro forma combined financial results to give effect to pro forma events that are directly attributable to these business combinations, reasonably estimable, and factually supportable.

The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the business combinations had taken place as of February 1, 2021.

During the fiscal year ended January 31, 2021, the Company acquired certain assets from a privately-held company for $ 7.1 million in cash.

The Company has accounted for this transaction as a business combination.

In allocating the aggregate purchase consideration based on the estimated fair values, the Company recorded $ 5.7 million as a developed technology intangible asset (to be amortized over an estimated useful life of five years ) and $ 1.4 million as goodwill, which is deductible for income tax purposes.

The excess of purchase consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill.

Acquisition-related costs associated with this business combination were not material for the fiscal year ended January 31, 2021, and were recorded as a general and administrative expense in the consolidated statements of operations.

The results of operations of the business combination have been included in the Company’s consolidated financial statements from the acquisition date.

The business combination did not have a material impact on the Company’s consolidated financial statements.

Therefore, historical results of operations prior to the acquisition date and pro forma results of operations have not been presented.

Intangible Assets and Goodwill

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Finite-lived intangible assets:

Developer community $ 150,000 $ ( 25,206 ) $ 124,794

Developed technology $ 243,596 $ ( 47,919 ) $ 195,677

Developer community 154,900 ( 55,442 ) 99,458

Assembled workforce 55,732 ( 22,945 ) 32,787

Patents 8,874 ( 6,211 ) 2,663

Other 47 ( 47 ) —

Total finite-lived intangible assets $ 463,102 $ ( 132,517 ) $ 330,585

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Finite-lived intangible assets:

Assembled workforce $ 28,252 $ ( 3,941 ) $ 24,311

Developer community

$ 150,000 $ ( 25,206 ) $ 124,794

Developed technology 48,332 ( 9,608 ) 38,724

Assembled workforce 28,252 ( 11,036 ) 17,216

Patents 8,874 ( 4,421 ) 4,453

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Total intangible assets, net $ 186,013

Intangible assets acquired during the fiscal year ended January 31, 2023 consisted primarily of developed community and developed technology intangible assets acquired in connection with business combinations.

See Note 7 for further details.

Intangible assets acquired during the fiscal year ended January 31, 2022 consisted primarily of $ 28.3 million of assembled workforce assets with a useful life of four years .

During the fiscal year ended January 31, 2024, in addition to the developed technology and developer community intangible assets acquired in connection with fiscal 2024 business combinations, the Company also acquired $ 27.5 million of intangible assets, primarily consisting of assembled workforce intangible assets with a useful life of four years .

Intangible assets acquired during the fiscal year ended January 31, 2023 consisted primarily of developer community and developed technology intangible assets acquired in connection with fiscal 2023 business combinations.

See Note 7, “Business Combinations,” for further details.

Amortization expense of intangible assets was $ 82.2 million, $ 38.8 million, and $ 7.8 million for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

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Changes in goodwill were as follows (in thousands):

Balance—January 31, 2021 and January 31, 2022

Balance—January 31, 2022

Additions and related adjustments (1)

Balance—January 31, 2023

Additions and related adjustments (1)

Balance—January 31, 2024

________________

(1) Includes measurement period adjustments related to the Company’s preliminary fair values of the assets acquired and liabilities assumed in business combinations, which did not have a material impact on goodwill.

See Note 7 for further details.

(1) Includes measurement period adjustments related to the preliminary fair values of the assets acquired and liabilities assumed in business combinations.

These adjustments did not have a material impact on goodwill.

See Note 7, “Business Combinations,” for further details.

Accrued Expenses and Other Current Liabilities

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Accrued compensation $ 205,056 $ 123,173

Employee contributions under employee stock purchase plan 36,648 28,497

Accrued third-party cloud infrastructure expenses 48,571 35,093

Employee contributions under employee stock purchase plan 40,641 36,648

Liabilities associated with sales, marketing and business development programs 39,571 24,218

Accrued taxes 37,108 20,003

Employee payroll tax withheld on employee stock transactions 22,479 592

Accrued professional services 9,274 11,776

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Total lease payments (receipts)

$ 365,465 $ ( 35,182 ) $ 330,283

imputed interest ( 77,484 )

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________________

(1) Includes $ 416.4 million of remaining non-cancelable contractual commitments as of January 31, 2023 related to one of the Company's third-party cloud infrastructure agreements, under which the Company committed to spend an aggregate of at least $ 555.0 million, between September 2020 and December 2025 with no minimum purchase commitment during any year.

The Company is required to pay the difference if it fails to meet the minimum purchase commitment by December 2025, and such payment can be applied to qualifying expenditures for cloud infrastructure services for up to twelve months after December 2025.

In January 2023, the Company amended one of its third-party cloud infrastructure agreements effective February 1, 2023 (the January 2023 Amendment).

Under the amended agreement, the Company has committed to spend an aggregate of at least $ 2.5 billion from fiscal 2024 to fiscal 2028 on cloud infrastructure services ($ 350.0 million in fiscal 2024, $ 450.0 million in fiscal 2025, $ 500.0 million in fiscal 2026, $ 550.0 million in fiscal 2027, and $ 650.0 million in fiscal 2028), which are reflected in the table above.

The Company is required to pay the difference if it fails to meet the minimum purchase commitment during any fiscal year, and such payment can be applied to qualifying expenditures for cloud infrastructure services during the term of the amended agreement.

The remaining non-cancelable purchase commitments under the agreement prior to the January 2023 Amendment, the aggregate amount of which was $ 732.0 million as of January 31, 2023, is not reflected in the table above as the Company is no longer required to fulfill such commitments.

(1) Includes $ 929.5 million of remaining non-cancelable contractual commitments as of January 31, 2024 related to one of the Company’s third-party cloud infrastructure agreements, under which the Company committed to spend an aggregate of at least $ 1.0 billion between June 2023 and May 2028 with no minimum purchase commitment during any year.

The Company is required to pay the difference if it fails to meet the minimum purchase commitment by May 2028 and such payment can be applied to qualifying expenditures for cloud infrastructure services for up to twelve months after May 2028.

(2) Also includes $ 247.2 million of remaining non-cancelable contractual commitments as of January 31, 2024 related to another one of the Company’s third-party cloud infrastructure agreements, under which the Company committed to spend an aggregate of at least $ 250.0 million between January 2024 and December 2028 with no minimum purchase commitment during any year.

The Company is required to pay the difference if it fails to meet the minimum purchase commitment by December 2028.

401(k) Plan —The Company sponsors a 401(k) defined contribution plan covering all eligible U.S.

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The Company did not make any matching contributions to the 401(k) plan for each of the fiscal years ended January 31, 2024, 2023, and 2022.

Legal Matters —The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business.

Legal Matters —On March 23, 2021, a former employee filed a charge with the National Labor Relations Board (the NLRB) claiming that he was terminated in retaliation for engaging in concerted activity protected under the National Labor Relations Act.

On September 15, 2023, following a hearing before a NLRB administrative law judge, the administrative law judge issued his ruling in favor of the former employee and ordered that he be awarded certain compensatory and other damages.

The Company is appealing the ruling to the Board of the NLRB.

The Company believes it is reasonably possible that a loss could ultimately result from an unfavorable outcome and that an estimate of the potential range of loss is between zero and $ 25 million, plus interest.

No material loss accrual was recorded in the Company’s consolidated balance sheet as of January 31, 2024, because management believes the likelihood of material loss resulting from this charge is not probable given the further appellate proceedings that are due to take place.

In addition, the Company is involved from time to time in various claims and legal actions arising in the ordinary course of business.

While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings will have a material adverse effect on its financial position, results of operations, or cash flows.

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For each of the fiscal years ended January 31, 2024, 2023, and 2022, losses recorded in the consolidated statements of operations in connection with the indemnification provisions were not material.

Redeemable Convertible Preferred Stock

Upon completion of its IPO in September 2020, as further discussed in Note 12, all shares of the Company’s redeemable convertible preferred stock outstanding, totaling 182.3 million, were automatically converted into an equivalent number of shares of Class B common stock on one -to-one basis and their carrying value of $ 1.4 billion was reclassified into stockholders’ equity.

As of January 31, 2023 and 2022, there were no shares of redeemable convertible preferred stock issued and outstanding.

Initial Public Offering and Private Placements —In September 2020, the Company completed its IPO, in which the Company issued and sold 32.2 million shares of its Class A common stock at $ 120.00 per share, including 4.2 million shares issued upon the exercise of the underwriters’ option to purchase additional shares.

The Company received net proceeds of $ 3.7 billion after deducting underwriting discounts.

In connection with the IPO:

• all 182.3 million shares of the Company’s outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of Class B common stock on a one -to-one basis;

• Salesforce Ventures LLC and Berkshire Hathaway Inc.

each purchased 2.1 million shares of the Company’s Class A common stock at $ 120.00 per share in concurrent private placements that closed immediately subsequent to the closing of the IPO.

The Company received aggregate proceeds of $ 500.0 million in these concurrent private placements and did not pay underwriting discounts with respect to the shares of Class A common stock that were sold in these private placements.

Prior to the IPO, deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the IPO, were capitalized in other assets on the consolidated balance sheets.

These deferred offering costs, net of reimbursement received from the underwriters upon completion of the IPO, were not material.

Preferred Stock —In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 200.0 million shares of undesignated preferred stock with a par value of $ 0.0001 per share and with rights and preferences, including voting rights, designated from time to time by the board of directors.

Preferred Stock —In connection with the Initial Public Offering (IPO) in September 2020, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 200.0 million shares of undesignated preferred stock with a par value of $ 0.0001 per share and with rights and preferences, including voting rights, designated from time to time by the board of directors.

Common Stock and Elimination of Dual-Class Structure —The Company has two classes of common stock authorized:

Class A common stock and Class B common stock.

In connection with the IPO, the Company’s amended and restated certificate of incorporation authorized the issuance of 2.5 billion shares of Class A common stock and 355.0 million shares of Class B common stock.

In connection with the IPO in September 2020, the Company’s amended and restated certificate of incorporation authorized the issuance of 2.5 billion shares of Class A common stock and 355.0 million shares of Class B common stock.

On March 1, 2021, all 169.5 million shares of the Company's then-outstanding Class B common stock, par value $ 0.0001 per share, were automatically converted into the same number of shares of Class A common stock, par value $ 0.0001 per share, pursuant to the terms of the Company’s amended and restated certificate of incorporation.

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Total shares of common stock reserved for future issuance 121,461 115,449

In February 2020, certain third parties unaffiliated with the Company commenced an offer to purchase existing outstanding shares of the Company’s Class B common stock from certain equity holders at a price of $ 38.77 per share.

The Company was not a party to this transaction.

The transaction was completed in March 2020, and an aggregate of 8.6 million shares of the Company’s Class B common stock were transferred to these third parties.

Equity Incentive Plans —In 2012, the Company’s board of directors approved the adoption of the 2012 Equity Incentive Plan (2012 Plan).

The 2012 Plan provides for the grant of stock-based awards to employees, non-employee directors, and other service providers of the Company.

Stock Repurchase Program —In February 2023, the Company’s board of directors authorized a stock repurchase program of up to $ 2.0 billion of its outstanding common stock.

Repurchases may be effected, from time to time, either on the open market (including via pre-set trading plans), in privately negotiated transactions, or through other transactions in accordance with applicable securities laws.

The program is funded using the Company’s working capital and will expire in March 2025.

The timing and amount of any repurchases will be determined by management based on an evaluation of market conditions and other factors.

The program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

The following table summarizes the stock repurchase activity under the Company’s stock repurchase program (in thousands, except per share data):

Fiscal Year Ended January 31, 2024

Number of shares repurchased 4,012

Weighted-average price per share (1)

Aggregate purchase price (1)

________________

(1) Includes transaction costs associated with the repurchases.

As of January 31, 2024, $ 1.4 billion remained available for future stock repurchases under the stock repurchase program.

The first 0.5 million shares repurchased during the fiscal year ended January 31, 2024 were recorded in treasury stock as a reduction to the stockholders’ equity on the consolidated balance sheets.

All subsequent repurchases of common stock were retired.

Upon retirement, the par value of the common stock repurchased was deducted from common stock and any excess of repurchase price (including associated transaction costs) over par value was recorded entirely to retained earnings (accumulated deficit) on the consolidated balance sheets.

Treasury Stock —As described above, 0.5 million shares were repurchased under the Company’s authorized stock repurchase program and recorded in treasury stock, of which 8,000 shares were reissued upon settlement of equity awards during the fiscal year ended January 31, 2024.

In addition, during the fiscal year ended January 31, 2024, in connection with the Samooha business combination as discussed in Note 7, “Business Combinations,” the Company issued approximately 0.2 million shares of its Class A common stock to one of its wholly-owned subsidiaries in exchange for a noncontrolling equity interest in Samooha that was held by the subsidiary prior to this business combination.

These shares are treated as treasury stock for accounting purposes.

Equity Incentive Plans —The Company’s 2020 Equity Incentive Plan (2020 Plan), which became effective in connection with its IPO in September 2020, provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSUs, performance awards and other forms of equity compensation (collectively, equity awards).

All shares that remain available for future grants are under the 2020 Plan.

The Company’s 2012 Equity Incentive Plan (2012 Plan) provided for the grant of equity awards to employees, non-employee directors, and other service providers of the Company.

The 2012 Plan was terminated in September 2020 in connection with the IPO but continues to govern the terms of outstanding awards that were granted prior to the termination of the 2012 Plan.

No further stock-based awards will be granted under the 2012 Plan.

With the establishment of the 2020 Equity Incentive Plan (2020 Plan) as further discussed below, upon the expiration, forfeiture, cancellation, or reacquisition of any shares of common stock underlying outstanding stock-based awards granted under the 2012 Plan, an equal number of shares of Class A common stock will become available for grant under the 2020 Plan.

Upon the expiration, forfeiture, cancellation, or reacquisition of any shares of common stock underlying outstanding equity awards granted under the 2012 Plan, an equal number of shares of Class A common stock will become available for grant under the 2020 Plan.

No further equity awards will be granted under the 2012 Plan.

On March 1, 2021, all shares of the Company’s then-outstanding Class B common stock were automatically converted into the same number of shares of Class A common stock.

As a result of this conversion, options and RSUs that were previously denominated in shares of Class B common stock and issued under the 2012 Plan remained unchanged, except that they represent the right to receive shares of Class A common stock.

In September 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Plan, which became effective in connection with the IPO.

The 2020 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards and other forms of equity compensation (collectively, equity awards).

A total of 34.1 million shares of the Company’s Class A common stock have been reserved for issuance under the 2020 Plan in addition to (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for issuance under the 2020 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class B common stock underlying outstanding stock awards granted under the 2012 Plan, an equal number of shares of Class A common stock, such number of shares not to exceed 78.8 million.

A total of 34.1 million shares of the Company’s Class A common stock was initially reserved for issuance under the 2020 Plan in addition to (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for issuance under the 2020 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class B common stock underlying outstanding stock awards granted under the 2012 Plan, an equal number of shares of Class A common stock, such number of shares not to exceed 78.8 million.

On February 1, 2023, the shares available for future grants under the 2020 Plan were automatically increased by 16.2 million shares pursuant to the provision described in the preceding sentence.

In September 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Employee Stock Purchase Plan (2020 ESPP), which became effective in connection with the IPO.

The 2020 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees.

A total of 5.7 million shares of the Company’s Class A common stock have been reserved for future issuance under the 2020 ESPP, in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under the 2020 ESPP.

The Company’s 2020 Employee Stock Purchase Plan (2020 ESPP), which became effective in connection with the IPO, authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees.

A total of 5.7 million shares of the Company’s Class A common stock was initially reserved for future issuance under the 2020 ESPP, in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under the 2020 ESPP.

On February 1, 2023, the shares available for future grants under the 2020 ESPP were automatically increased by 3.2 million shares pursuant to the provision described in the preceding sentence.

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Shares authorized 14,397 —

Shares ceased to be available for issuance under the 2012 Plan ( 15,696 ) —

Options granted ( 877 ) 877 $ 34.83

Options exercised — ( 20,903 ) $ 6.08

Options canceled 1,629 ( 1,629 ) $ 6.80

Repurchase of unvested common stock 40 —

RSUs granted ( 4,026 ) —

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Shares authorized 15,619 —

Options granted ( 642 ) 642 $ 207.56

Options exercised — ( 6,118 ) $ 6.50

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RSUs granted ( 10,788 ) —

Shares withheld related to net share settlement of RSUs 1,149 —

RSUs forfeited 1,492 —

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Shares authorized 16,165 —

Options granted ( 642 ) 642 $ 207.56

Options exercised — ( 8,357 ) $ 6.84

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26,774 $ 10.00 5.0 $ 4,973,515

No options were granted during the fiscal year ended January 31, 2022.

The weighted-average grant-date fair value of options granted during the fiscal years ended January 31, 2023 and 2021 was $ 101.66 and $ 22.67 , respectively.

The weighted-average grant-date fair value of options granted during the fiscal year ended January 31, 2023 was $ 101.66 .

No options were granted during each of the fiscal years ended January 31, 2024 and January 31, 2022.

The intrinsic value of options exercised during the fiscal years ended January 31, 2024, 2023, and 2022 was $ 1.3 billion, $ 1.0 billion, and $ 5.7 billion, respectively.

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Upon termination of service, the Company may repurchase unvested shares acquired through the early exercise of stock options at a price equal to the price per share paid upon the exercise of such options.

Shares subject to repurchase as a result of early exercised options were not material as of each January 31, 2023 and 2022.

RSUs —In March 2020, the Company began granting more RSUs than options to its employees and non-employee directors.

RSUs granted prior to the IPO had both service-based and performance-based vesting conditions.

No unvested shares were subject to repurchase as a result of early exercised options as of January 31, 2024, and unvested shares subject to repurchase as a result of early exercised options were not material as of January 31, 2023.

Equity-Classified RSUs —RSUs granted under the 2012 Plan are equity-classified and had both service-based and performance-based vesting conditions, of which the performance-based vesting condition was satisfied upon the effectiveness of the IPO in September 2020.

The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter.

The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company.

Both events were not deemed probable until consummated, and therefore, stock-based compensation related to these RSUs remained unrecognized prior to the effectiveness of the IPO.

Upon the effectiveness of the IPO in September 2020, the performance-based vesting condition was satisfied, and therefore, the Company recognized cumulative stock-based compensation of $ 55.5 million using the accelerated attribution method for the portion of the RSU awards for which the service-based vesting condition has been fully or partially satisfied.

RSUs granted after the IPO do not contain the performance-based vesting condition described above, and the related stock-based compensation is recognized on a straight-line basis over the requisite service period.

A summary of RSU activity during the fiscal years ended January 31, 2023, 2022, and 2021 is as follows:

Stock-based compensation associated with RSUs granted under the 2012 Plan was recognized using an accelerated attribution method from the time it was deemed probable that the vesting condition was met through the time the service-based vesting condition had been achieved.

Equity-classified RSUs granted under the 2020 Plan include those that only contain a service-based vesting condition that is typically satisfied over four years , and the related stock-based compensation for RSUs is recognized on a straight-line basis over the requisite service period.

In addition, during the fiscal year ended January 31, 2024, the Company granted, under the 2020 Plan, equity-classified RSUs that have both service-based and performance-based vesting conditions (Leadership PRSUs) to its executive officers and certain other members of its senior leadership team.

The service-based vesting condition for these Leadership PRSUs is satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter.

The performance-based vesting condition is satisfied upon the achievement of certain Company annual performance targets set by the compensation committee of the board of directors of the Company.

The ultimate number of the Leadership PRSUs eligible to vest ranges between 0 % to 120 % of the target number of the Leadership PRSUs based on the weighted-average achievement of such Company annual performance metrics for the fiscal year ended January 31, 2024.

Stock-based compensation associated with these Leadership PRSUs is recognized using an accelerated attribution method over the requisite service period, based on the Company’s periodic assessment of the probability that the performance condition will be achieved.

For the fiscal year ended January 31, 2024, the Company recognized stock-based compensation of $ 30.8 million associated with these PRSUs.

A summary of equity-classified RSUs activity during the fiscal years ended January 31, 2024, 2023, and 2022 is as follows:

Number of Shares

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Unvested Balance—January 31, 2021

9,348 $ 125.06

Granted 4,026 $ 250.46

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15,560 $ 181.17

Granted 10,788 $ 180.65

12,706 $ 158.28

Vested ( 6,810 ) $ 172.38

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19,575 $ 169.82

________________

(1) Includes 0.5 million Leadership PRSUs granted at 120 % of the target number of these awards, which represents the maximum number of Leadership PRSUs that may be eligible to vest with respect to these awards over their full term.

Liability-Classified RSUs —During the fiscal year ended January 31, 2024, in connection with the Samooha business combination as discussed in Note 7, “Business Combinations,” the Company agreed to grant, under the 2020 Plan, RSUs that contain both post-combination service-based and performance-based vesting conditions (Acquisition PRSUs) to eligible existing or future employees, subject to a maximum total number of approximately 1.7 million shares.

The post-combination service-based vesting condition for these Acquisition PRSUs is satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter.

The performance-based vesting condition is contingent on the achievement of certain performance metric over the twelve-month period ending January 31, 2027.

Acquisition PRSUs will vest when both service-based and performance-based conditions are satisfied.

The ultimate number of Acquisition PRSUs eligible to vest is determined based on the actual achievement of the performance metric, which takes into account certain factors including the price of the Company’s stock price and market capitalization.

Once granted, Acquisition PRSUs are initially liability-classified and recorded in other liabilities on the Company’s consolidated balance sheets, as the monetary value of the obligation under each potential outcome of the performance condition is predominantly based on a fixed monetary amount known at inception and will be settled in a variable number of shares.

Subsequently, these awards are remeasured to the fair value at each reporting date until the number of Acquisition PRSUs eligible to vest is fixed, at which time these awards will be reclassified to equity.

For the fiscal year ended January 31, 2024, the Company recognized stock-based compensation of $ 0.5 million associated with Acquisition PRSUs.

A summary of liability-classified RSUs activity during the fiscal year ended January 31, 2024 is as follows:

Number of Shares

(in thousands)

Unvested Balance—January 31, 2023

Unvested Balance—January 31, 2024

________________

(1) Represents the maximum number of Acquisition PRSUs that may be eligible to vest with respect to these awards over their full term.

Restricted Common Stock —Restricted common stock is not deemed to be outstanding for accounting purposes until it vests.

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Unvested Balance—January 31, 2022

Granted 409 $ 229.13

Vested ( 361 ) $ 2.10

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Unvested Balance—January 31, 2024

As discussed in Note 7, during the fiscal year ended January 31, 2023, in connection with the Streamlit business combination, the Company issued to Streamlit’s three founders a total of 0.4 million shares of the Company’s common stock outside of the Plans in exchange for a portion of their Streamlit stock.

These shares are subject to vesting agreements pursuant to which the shares will vest over three years , subject to each founder’s continued employment with the Company or its affiliates.

The $ 93.7 million fair value of these shares are accounted for as post-combination stock-based compensation over the requisite service period of three years .

During the fiscal year ended January 31, 2024, in connection with the Samooha business combination, the Company issued to certain of Samooha’s employees a total of 0.4 million shares of the Company’s Class A common stock in exchange for a portion of their Samooha stock.

These shares are subject to vesting agreements pursuant to which the shares will vest over four years , subject to each of these employees’ continued employment with the Company or its affiliates.

The $ 74.8 million fair value of these shares is accounted for as post-combination stock-based compensation over the requisite service period of four years .

As of January 31, 2024, all 0.4 million shares remained unvested.

In December 2017, the Company issued 1.3 million shares of restricted common stock outside of the Plans to an employee at $ 1.59 per share, payable by a promissory note.

The promissory note accrued interest at the lower of 2.11 % per annum or the maximum interest rate on commercial loans permissible by law and was partially secured by the underlying restricted stock.

The promissory note was considered nonrecourse from an accounting standpoint, and therefore the note was not reflected in the consolidated balance sheets and consolidated statements of stockholders’ equity (deficit).

Rather, the note and the share purchases were accounted for as stock option grants, with the related stock-based compensation measured using the Black-Scholes option-pricing model and recognized over the vesting period of five years .

The associated shares are legally outstanding and included in the balance of Class B common stock outstanding in the consolidated financial statements during the periods in which Class B common stock was outstanding and in the balance of Class A common stock outstanding thereafter.

None of these shares of restricted common stock were considered vested before the underlying promissory note was repaid.

In May and June 2020, the outstanding principal amount and all accrued interest under this promissory note of $ 2.1 million was repaid, and the 1.3 million shares of restricted common stock were fully vested as of January 31, 2023.

Stock-Based Compensation — The following table summarizes the assumptions used in estimating the fair value of stock options granted to employees and a non-employee director during the fiscal years ended January 31, 2023 and 2021:

During the fiscal year ended January 31, 2023, in connection with the Streamlit business combination, the Company issued to Streamlit’s three founders a total of 0.4 million shares of the Company’s common stock outside of the Plans in exchange for a portion of their Streamlit stock.

These shares are subject to vesting agreements pursuant to which the shares will vest over three years , subject to each founder’s continued employment with the Company or its affiliates.

The $ 93.7 million fair value of these shares is accounted for as post-combination stock-based compensation over the requisite service period of three years .

As of January 31, 2024 and 2023, 0.3 million and 0.4 million shares remained unvested.

See Note 7, “Business Combinations,” for further details.

Stock-Based Compensation — The following table summarizes the assumptions used in estimating the grant-date fair value of stock options granted to employees during the fiscal year ended January 31, 2023:

Fiscal Year Ended January 31, 2023

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Expected dividend yield — %

No stock options were granted during the fiscal year ended January 31, 2022.

Expected term —For stock options considered to be “plain vanilla” options, the Company estimates the expected term based on the simplified method, which is essentially the weighted average of the vesting period and contractual term, as the Company’s historical option exercise experience does not provide a reasonable basis upon which to estimate the expected term.

Expected volatility —Prior to fiscal 2023, the Company performed an analysis of using the average volatility of a peer group of representative public companies with sufficient trading history over the expected term to develop an expected volatility assumption.

During the fiscal year ended January 31, 2023, the Company began using the average volatility of its Class A common stock and the stocks of a peer group of representative public companies to develop an expected volatility assumption.

Risk-free interest rate —Risk-free rate is estimated based upon quoted market yields for the United States Treasury debt securities for a term consistent with the expected life of the awards in effect at the time of grant.

Expected dividend yield —Because the Company has never paid and has no intention to pay cash dividends on common stock, the expected dividend yield is zero.

Fair value of underlying common stock —Prior to the completion of the IPO, the board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved.

The factors considered included, but were not limited to:

(i) the results of contemporaneous independent third-party valuations of the Company’s common stock;

(ii) the prices, rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock;

(iii) the lack of marketability of the Company’s common stock;

(iv) actual operating and financial results;

(v) current business conditions and projections;

(vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions;

and (vii) precedent transactions involving the Company’s shares.

Since the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the New York Stock Exchange.

The following table summarizes the assumptions used in estimating the fair value of employee stock purchase rights granted under the 2020 ESPP during the fiscal years ended January 31, 2023, 2022, and 2021:

No stock options were granted during each of the fiscal years ended January 31, 2024 and January 31, 2022.

The following table summarizes the assumptions used in estimating the fair values of employee stock purchase rights granted under the 2020 ESPP during the fiscal years ended January 31, 2024, 2023, and 2022:

Fiscal Year Ended January 31,

3 unchanged sentences

58.9 % - 74.8 %

37.3 % - 49.5 %

Risk-free interest rate 4.7 % - 5.5 %

0.9 % - 3.8 %

Expected dividend yield — % — % — %

The expected term for ESPP Rights approximates the offering period.

Expected volatility —The Company uses the average volatility of its Class A common stock and the stocks of a peer group of representative public companies to develop an expected volatility assumption.

Expected dividend yield —Because the Company has never paid and has no intention to pay cash dividends on common stock, the expected dividend yield is zero .

Fair value of underlying common stock —Since the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the New York Stock Exchange.

The following table summarizes the assumptions used in estimating the fair value of liability-classified Acquisition PRSUs as of January 31, 2024:

January 31, 2024

Expected volatility 60.0 %

Risk-free interest rate 4.0 %

Expected volatility —Expected volatility is estimated based on the historical volatility of the Company’s Class A common stock.

Risk-free interest rate —Risk-free rate is estimated based upon quoted market yields for the United States Treasury debt securities for a term that approximates the period from the reporting date to January 31, 2027.

Stock-based compensation included in the consolidated statements of operations was as follows (in thousands):

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Total stock-based compensation $ 1,216,845 $ 890,950 $ 629,269

As of January 31, 2023, total compensation cost related to unvested equity awards not yet recognized was $ 2.4 billion, which will be recognized over a weighted-average period of 2.9 years.

As of January 31, 2024, total compensation cost related to unvested awards not yet recognized was $ 3.0 billion, which will be recognized over a weighted-average period of 2.9 years.

The components of loss before income taxes were as follows (in thousands):

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Net operating losses carryforwards $ 1,673,213 $ 1,567,135

Tax credit carryforwards 274,690 215,934

Capitalized research and development 420,491 147,328

Tax credit carryforwards 376,804 274,690

Stock-based compensation 109,446 123,408

Deferred revenue 82,683 31,527

Operating lease liabilities 54,008 55,079

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Deferred tax liabilities:

Deferred commissions ( 31,940 ) ( 28,368 )

Intangible assets ( 39,173 ) ( 39,426 )

Deferred commissions ( 41,609 ) ( 31,940 )

Operating lease right-of-use assets ( 48,629 ) ( 53,829 )

Net unrealized gains on strategic investments — ( 6,399 )

Other ( 1,326 ) ( 2,358 )

1 unchanged sentence

Net deferred tax liabilities

$ ( 882 ) $ ( 8,477 )

The valuation allowance was $ 2.6 billion and $ 2.1 billion as of January 31, 2024 and 2023, respectively, primarily relating to U.S.

federal and state net operating loss carryforwards and tax credit carryforwards.

The valuation allowance increased $ 241.9 million during the fiscal year ended January 31, 2023, primarily due to increased U.S.

federal and state net operating loss carryforwards, tax credit carryforwards, capitalized research and development, and stock-based compensation.

The valuation allowance increased $ 1.3 billion and $ 434.5 million during the fiscal years ended January 31, 2022 and 2021, respectively, primarily due to increased U.S.

federal and state net operating loss carryforwards, tax credit carryforwards, deferred revenue, and stock-based compensation.

federal and state net operating loss carryforwards, capitalized research and development, and tax credit carryforwards.

The valuation allowance increased $ 520.4 million during the fiscal year ended January 31, 2024, primarily due to increased capitalized research and development, U.S.

federal and state net operating loss carryforwards, tax credit carryforwards, and deferred revenue.

The valuation allowance increased $ 241.9 million during the fiscal year ended January 31, 2023, primarily due to increased capitalized research and development, tax credit carryforwards, U.S.

federal and state net operating loss carryforwards, and stock-based compensation.

As of January 31, 2024, the Company had U.S.

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Increases based on tax positions during the prior period

12,708 1,816 20

Increases based on tax positions during the current period

27,365 15,649 38,346

Ending balance $ 115,253 $ 75,180 $ 57,715

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On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the Inflation Act) into law.

The Inflation Act contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and an excise tax of 1% on share repurchases.

The Company is currently evaluating the various provisions of the Inflation Act and does not anticipate the impact, if any, will be material to the Company, including in connection with the Company’s stock repurchase program.

The Inflation Act contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and an excise tax of 1% on stock repurchases.

For the fiscal year ended January 31, 2024, the Inflation Act had no material impact to the Company, including its stock repurchase program.

The Company is continuing to evaluate the various provisions of the Inflation Act and does not anticipate the impact, if any, will be material to the Company.

Net Loss per Share

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Related Party Transactions

In December 2020, as a minority investor, the Company made a strategic investment of approximately $ 20.0 million by purchasing non-marketable equity securities issued by a privately-held company (the Strategic Investee), which is partially owned by two of the holders of more than 5 % of the Company’s capital stock as of the time of investment, and two members of the Company’s board of directors are also members of the board directors of this privately-held company.

In addition, the Company has entered into immaterial customer agreements and vendor contracts with the Strategic Investee since fiscal 2016 and fiscal 2018, respectively.

In November 2021, the Strategic Investee raised additional funding in an orderly transaction, at which time it was no longer considered a related party of the Company.

Subsequent Events

Business Combinations

On February 10, 2023, the Company acquired (i) all outstanding stock of Mountain US Corporation (f/k/a Mobilize.net Corporation), a privately-held company which provides a premier suite of tools for efficiently migrating databases to the Data Cloud, for approximately $ 67 million in cash, net of cash and cash equivalents acquired, and (ii) all outstanding stock of LeapYear Technologies, Inc., a privately-held company which provides a differential privacy platform, for approximately $ 59 million in cash, net of cash and restricted cash acquired.

The Company is currently evaluating the purchase price allocation for these transactions.

Stock Repurchase Program

In February 2023, the Company’s board of directors authorized a stock repurchase program of up to $ 2.0 billion of its outstanding common stock.

The program is funded using the Company’s working capital and will expire in March 2025.

The timing and amount of any repurchases will be determined by management based on an evaluation of market conditions and other factors.

The program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

A member of the Company’s board of directors currently serves as the Chief Executive Officer of a privately-held company (the Related Party), which has been the Company’s customer since 2018.

In January 2024, the Company renewed its customer agreement with the Related Party for a term of two years with a total contract value of $ 22.5 million.

With respect to the Related Party, the Company recognized $ 6.8 million, $ 3.7 million, and $ 2.4 million of revenue for the fiscal years ended January 31, 2024, 2023 and 2022, respectively, and had an accounts receivable balance due from the Related Party of $ 5.0 million and zero as of January 31, 2024 and 2023, respectively.

In March 2024, as a minority investor, the Company made a strategic investment of approximately $ 5.0 million by purchasing non-marketable equity securities issued by the Related Party.

Subsequent Event

Effective February 27, 2024, Frank Slootman retired as Chief Executive Officer, and Sridhar Ramaswamy was appointed to succeed Mr.

Slootman as the Company’s new Chief Executive Officer.

Slootman remains Chairman of the Company’s board of directors, and Mr.

Ramaswamy serves as a board member.

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