What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2021-03-16 compared with 2020-03-20 · 158 added, 245 removed, 785 unchanged (34% of the section changed)

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dollars using month-end rates of exchange for assets and liabilities, and average rates for the period derived from month-end spot rates for revenue, costs and expenses.

We record translation gains and losses in accumulated other comprehensive (loss) income as a component of stockholders' equity (deficit).

We record translation gains and losses in accumulated other comprehensive (loss) income as a component of stockholders' equity.

We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange losses in other expense, net.

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dollar from rates on January 31, 2021 to have a material effect on our financial position or results of operations.

These exposures may change over time as business practices evolve and economic conditions change, including market impacts associated with COVID-19.

Inflation Risk

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Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of 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 Yext, Inc.

(the Company) as of January 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended January 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements“).

(the Company) as of January 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2021, in conformity with U.S.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 16, 2021 expressed an adverse opinion thereon.

Adoption of New Accounting Standards

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for its leases in 2020 due to its modified retrospective adoption of Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), and the Company changed its method for recognizing revenue and costs to obtain revenue contracts in 2019 due to its modified retrospective adoption of ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606), and the related amendments.

Basis for Opinion

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

We are a public accounting firm registered with PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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

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Description of the Matter

The Company recorded consolidated revenue and unearned revenue of $298.8 million and $177.2 million, respectively, for the fiscal year ended and as of January 31, 2020.

The Company recorded consolidated revenue and unearned revenue of $354.7 million and $192.0 million, respectively, for the year ended January 31, 2021.

As described in Note 2 to the consolidated financial statements, the Company primarily earns revenue from subscriptions and associated support to the platform.

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The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to the Company’s processes to calculate, record and account for certain costs capitalized to obtain revenue contracts.

Management has identified a material weakness related to the Company’s processes to calculate, record and account for sales commissions.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Yext, Inc.

as of January 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended January 31, 2020, and the related notes.

as of January 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended January 31, 2021, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and this report does not affect our report dated March 16, 2021 which expressed an unqualified opinion thereon.

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$ 230,411 $ 256,076

Marketable securities

Accounts receivable, net of allowances of $ 2,528 and $ 995 , respectively

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Operating lease liabilities, non-current

123,584 115,187

Other long term liabilities

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733,933 636,008

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

2,422 ( 360 )

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$ ( 0.79 ) $ ( 1.09 ) $ ( 0.76 )

Weighted-average number of shares used in computing net loss per share

attributable to common stockholders, basic and diluted

Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

119,690,378 111,758,946 98,387,366

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See the accompanying notes to the consolidated financial statements.

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

Consolidated Statements of Stockholders' Equity

(In thousands)

Accumulated Total

Convertible Preferred Stock Common Stock Additional

Common Stock Additional

Paid-In Other

Comprehensive Accumulated Treasury Stockholders’

Shares Amount Shares Amount Capital Loss Deficit Stock (Deficit)

Comprehensive Accumulated Treasury Total Stockholders’

Shares Amount Capital Income (Loss) Deficit Stock Equity

Balance, January 31, 2018 93,977 $ 100 $ 328,344 $ ( 1,636 ) $ ( 233,450 ) $ ( 11,905 ) $ 81,453

Initial public offering, net of issuance costs of $ 4,433

— — 12,075 12 119,082 — — — 119,094

Conversion of preferred stock ( 43,594 ) ( 120,615 ) 43,594 44 120,571 — — — 120,615

Conversion of preferred stock warrant — — — — 1,435 — — — 1,435

Cumulative effect adjustment in connection with the adoption of ASU 2014-09 — — — 3 7,178 — 7,181

Exercise of stock options 5,901 5 18,857 — — — 18,862

Exercise of common stock warrants — — 179 — 79 — — — 79

Vested restricted stock units converted to common shares 1,585 3 ( 3 ) — — — —

Issuance of restricted stock 16 — — — — — —

Issuance of common stock under employee stock purchase plan 694 1 6,777 — — — 6,778

Stock-based compensation — — 44,907 — — — 44,907

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Balance, January 31, 2019 102,173 109 398,882 ( 1,428 ) ( 301,109 ) ( 11,905 ) 84,549

Cumulative effect adjustment in connection with the adoption of ASU 2014-09 — — — — — 3 7,178 — 7,181

Common stock offering, net of issuance costs of $ 530

7,000 7 146,463 — — — 146,470

Exercise of stock options 3,308 3 14,852 — — — 14,855

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Balance, January 31, 2020 115,830 122 636,008 ( 360 ) ( 422,653 ) ( 11,905 ) 201,212

Common stock offering, net of issuance costs of $ 530

— — 7,000 7 146,463 — — — 146,470

Exercise of stock options 3,064 3 16,513 — — — 16,516

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$ ( 94,692 ) $ ( 121,544 ) $ ( 74,837 )

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

Depreciation and amortization

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

Depreciation and amortization expense

10,612 8,069 6,813

Provision for bad debts

Bad debt expense

2,547 1,246 492

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72,294 67,770 44,233

Change in fair value of convertible preferred stock warrant liability

Amortization of operating lease right-of-use assets

12,203 11,124 —

Other, net ( 489 ) 120 ( 83 )

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1,720 565 ( 847 )

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities

1,204 ( 30,768 ) 5,240

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— 51,197 86,320

Sales of marketable securities

Capital expenditures

( 65,111 ) ( 11,889 ) ( 5,270 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

( 65,111 ) 39,308 28,134

Financing activities:

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

Proceeds from common stock offering, net of underwriting discounts and commissions — 147,000 —

Payments of deferred offering costs

( 530 ) — ( 4,263 )

Payments of common stock deferred offering costs

Proceeds from exercise of stock options

16,464 14,893 18,880

Proceeds from exercise of warrants

Repayments on Revolving Line

— — ( 5,000 )

Payments of deferred financing costs

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3,594 ( 492 ) ( 370 )

Net increase in cash, cash equivalents and restricted cash

176,421 57,388 9,447

Net (decrease) increase in cash, cash equivalents and restricted cash ( 37,765 ) 176,421 57,388

Cash, cash equivalents and restricted cash at beginning of period

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$ 1,413 $ 531 $ 19

Supplemental disclosures of non-cash investing and financing activities:

Non-cash capital expenditures in accounts payable, accrued expenses and other current liabilities

$ 9,194 $ 143 $ 209

Stock-based compensation for capitalized software in property and equipment, net $ 1,416 $ 675 $ 408

Conversion of convertible preferred stock to common stock

$ — $ — $ 120,615

Conversion of convertible preferred stock warrants to common stock warrants

$ — $ — $ 1,435

Supplemental reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets as of January 31,

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Description of Business

("Yext" or the "Company"), a search experience cloud company, puts businesses in control of their facts online by delivering brand-verified answers.

The Yext platform lets businesses structure the facts about their brands in a database called a Knowledge Graph.

The Yext platform is built to leverage the structured data stored in the Knowledge Graph to power direct answers on a business' own website, as well as across approximately 175 service and application providers, which the Company refers to as its Knowledge Network, and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

("Yext" or the "Company") organizes a business's facts so it can provide official answers to consumer questions starting with the business's own website and then extending across search engines and voice assistants.

The Yext platform lets businesses structure the facts about their brands in a database called the Knowledge Graph.

The platform is built to leverage the structured data stored in the Knowledge Graph to deliver a modern search experience on a business's or organization's own website, as well as across approximately 200 service and application providers, which the Company refers to as its Knowledge Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

The Yext platform powers all of the Company's key features, including Listings, Pages, and Answers, along with its other features and capabilities.

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Certain prior period amounts have been reclassified to conform to the current period presentation.

Amounts classified as deferred rent, current and deferred rent, non-current in the Form 10-K as of January 31, 2019, are now included in accounts payable, accrued expenses and other current liabilities and other long term liabilities, respectively, on the Company's consolidated balance sheet.

In prior periods, amounts previously within Interest expense, net are now classified separately as Interest income and Interest expense, and amounts previously classified as Investment income are included within Interest income on the Company's consolidated statement of operations and comprehensive loss.

The Company adopted on a modified retrospective basis Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09") in its Form 10-K for the fiscal year ended January 31, 2019, the effects of which were recognized effective February 1, 2018.

Results for the fiscal year ended January 31, 2018 continue to be reported in accordance with historical accounting standards under ASC 605.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of those financial statements and the reported amounts of revenue and expense during the reporting period.

These estimates include, but are not limited to, the standalone selling prices ("SSP") of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain customer contracts, income taxes, and the fair value of stock-based compensation.

These estimates include, but are not limited to, the standalone selling prices ("SSP") of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain revenue contracts, income taxes, and the valuation and assumptions underlying stock-based compensation.

Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances.

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The Company adopted on a modified retrospective basis ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09") in its fourth quarter of the fiscal year ended January 31, 2019, the effects of which were recognized effective February 1, 2018.

The Company recognizes revenue upon transfer of control of services to its customers in an amount that reflects the

consideration it expects to receive in exchange for those services.

The Company recognizes revenue upon transfer of control of services to its customers in an amount that reflects the consideration it expects to receive in exchange for those services.

The recognition of revenue is determined through application of the following five-step model:

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The Company reports revenue net of sales tax and other taxes collected from customers to be remitted to government authorities.

Prior to the adoption of this standard, during the fiscal year ended January 31, 2018, the Company recognized revenue when four basic criteria were met:

(1) persuasive evidence exists of an arrangement with a customer reflecting the terms and conditions under which the services will be provided;

(2) services have been provided or delivery has occurred;

(3) the fee is fixed or determinable;

and (4) collection is reasonably assured.

Collectability was assessed based on a number of factors, including the creditworthiness of a customer and transaction history.

Costs Capitalized to Obtain Revenue Contracts

In conjunction with the Company's modified retrospective adoption of ASU 2014-09, effective for the fiscal year ended January 31, 2019, the Company capitalizes costs of obtaining revenue contracts that are incremental and recoverable.

The Company capitalizes costs of obtaining revenue contracts that are incremental and recoverable.

Incremental costs primarily include sales commissions for new and renewal revenue contracts, certain related incentives, and associated payroll tax and fringe benefit costs.

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The Company periodically evaluates whether there have been any changes in its business, market conditions, or other events which would indicate that its amortization period should be changed, or if there are potential indicators of impairment.

During the fiscal years ended January 31, 2020 and January 31, 2019, the Company capitalized $ 41.4 million and $ 31.6 million of costs to obtain revenue contracts and amortized $ 23.1 million and $ 15.0 million to sales and marketing expense, respectively.

During the fiscal years ended January 31, 2021 and 2020, the Company capitalized $ 33.2 million and $ 41.4 million of costs to obtain revenue contracts and amortized $ 34.6 million and $ 23.1 million to sales and marketing expense, respectively.

Costs capitalized to obtain revenue contracts on the Company's consolidated balance sheet totaled $ 53.0 million and $ 54.5 million at January 31, 2021 and 2020, respectively.

Prior to the adoption of this standard, during the fiscal year ended January 31, 2018, the Company only capitalized costs that were both direct and incremental to obtaining a revenue contract, and amortized such costs over the contract term.

There were no impairments of costs capitalized to obtain revenue contracts for the fiscal years ended January 31, 2021, 2020 and 2019, respectively.

Cost of Revenue

Cost of revenue consists primarily of employee-related costs which are comprised of personnel-related costs and stock-based compensation expense.

Personnel-related costs mainly consist of salaries and wages.

Cost of revenue also includes Knowledge Network application provider fees, data center expense, depreciation expense, as well as operating and short-term lease expenses associated with the Company's office spaces.

Cost of revenue is generally expensed as incurred, including personnel-related costs, costs associated with the Company’s Knowledge Network application providers, and data center costs.

Capitalized software development costs incurred in connection with additional functionality to the Yext platform are recognized in cost of revenue as depreciation expense in accordance with the “capitalized software development costs” section of this Note.

Cost of revenue also includes operating and short-term lease expenses, software expense, and depreciation expense, each of which are allocated based on employee headcount.

Stock-Based Compensation

Stock-based compensation for all employee stock-based awards, including restricted stock units, restricted stock and options to purchase common stock, is measured at fair value on the date of grant and recognized over the service period.

Prior to the Company's Initial Public Offering ("IPO"), the fair value of the Company’s common stock was determined by its Board of Directors.

The fair value of restricted stock units and restricted stock are estimated on the date of grant based on the fair value of the Company’s common stock.

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The Company does not apply a forfeiture rate assumption to value such awards, given the nature of the services provided.

Prior to adoption, during the fiscal years ended January 31, 2019 and 2018 stock-based compensation associated with stock-based awards issued to non-employees was re-measured each period until fully vested.

Advertising Expenses

Advertising costs include conferences and brand awareness events, including the Company's annual industry and customer event, ONWARD, and are expensed as incurred.

Prior to adoption, during the fiscal year ended January 31,

2019 stock-based compensation associated with stock-based awards issued to non-employees was re-measured each period until fully vested.

Advertising and Other Promotional Costs

Advertising and other promotional costs are expensed as incurred.

Advertising expenses were $ 7.5 million, $ 6.9 million and $ 6.1 million for the fiscal years ended January 31, 2021, 2020 and 2019, respectively and are included within sales and marketing expense in the consolidated statement of operations and comprehensive loss.

Research and Development

Research and development costs are expensed as incurred and consist primarily of employee-related costs which are comprised of personnel-related costs and stock-based compensation expense.

Personnel-related costs mainly consist of salaries and wages.

Research and development costs also include operating and short-term lease expenses associated with the Company's office facilities.

Research and development costs are generally expensed as incurred, including personnel-related costs.

Research and development costs also include operating and short-term lease expenses and software expense, each of which are allocated based on employee headcount.

Research and development costs exclude capitalized software development costs.

Capitalized Software Development Costs

The Company capitalizes certain software development costs, including elements of stock-based compensation, incurred in connection with additional functionality to its platform, as well as internal-use projects during the application development stage.

These costs are recognized on a straight-line basis over an estimated useful life of two to three years and are included as depreciation expense in the consolidated statement of operations and comprehensive loss.

Capitalized software development costs, net, included in property and equipment, net, were $ 4.4 million and $ 2.6 million as of January 31, 2020 and 2019, respectively.

Depreciation expense related to capitalized software development costs of $ 2.7 million, $ 2.2 million and $ 1.2 million were recognized in the statement of operations and comprehensive loss during the fiscal years ended January 31, 2020, 2019 and 2018, respectively.

The Company prospectively early adopted ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract" on February 1, 2019.

The guidance aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract ("cloud computing arrangement") with the requirements for capitalizing implementation costs incurred for an internal-use software license.

Eligible costs associated with cloud computing arrangements, such as software business applications used in the normal course of business, are capitalized in accordance with ASC 350.

These costs are recognized on a straight-line basis in the same line item in the statement of operations and comprehensive loss as the expense for fees for the associated cloud computing arrangement, over the term of the arrangement, plus reasonably certain renewals.

Cloud computing arrangement costs, included in prepaid expenses and other current assets were $ 1.2 million as of January 31, 2020.

No amortization expense associated with the Company's cloud computing arrangements has been recognized during the fiscal year ended January 31, 2020.

Software development costs incurred in the maintenance and minor upgrade and enhancement of software without additional functionality are expensed as incurred.

The Company capitalizes certain software development costs included as software in progress or computer software within property and equipment, net.

These costs are incurred in connection with additional functionality to its platform, as well as internal-use projects during the application development stage and include elements of stock-based compensation.

Computer software is recognized on a straight-line basis over an estimated useful life of 2 to 3 years.

Capitalized software development costs incurred in connection with additional functionality to the platform are recognized as depreciation expense in cost of revenue within the consolidated statement of operations and comprehensive loss.

Capitalized software development costs incurred in internal-use projects are recognized as depreciation expense and are allocated based on employee headcount.

Capitalized software development costs, net were $ 7.2 million and $ 4.4 million as of January 31, 2021 and 2020, respectively, and primarily related to those costs incurred in connection with additional functionality to its platform.

Depreciation expense associated with capitalized software development costs was $ 2.6 million, $ 2.7 million and $ 2.2 million during the fiscal years ended January 31, 2021, 2020 and 2019, respectively.

Software costs that meet the cloud computing arrangements criteria are capitalized in accordance with ASC 350 “Intangibles—Goodwill and Other” and are recognized on a straight-line basis over the term of the arrangement, plus reasonably certain renewals.

Capitalized costs included in prepaid expenses and other current assets were $ 2.5 million and $ 1.2 million as of January 31, 2021 and 2020, respectively, and $ 0.8 million and zero were amortized during the fiscal years ended January 31, 2021 and 2020, respectively.

Software costs that do not meet the capitalization criteria, including costs incurred in the maintenance and minor upgrade and enhancement of software without additional functionality, are expensed as incurred.

The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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The Company classifies all deferred tax assets and liabilities as non-current on the consolidated balance sheet.

The effect of a change in tax

rates on deferred tax assets and liabilities is recognized within the (provision for) benefit from income taxes on the consolidated statement of operations and comprehensive loss in the period that includes the enactment date.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized within the (provision for) benefit from income taxes on the consolidated statement of operations and comprehensive loss in the period that includes the enactment date.

The Company reduces deferred tax assets, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax assets.

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The Company recognizes interest and penalties related to uncertain tax positions within the (provision for) benefit from income taxes on the consolidated statement of operations and comprehensive loss.

Convertible Preferred Stock Warrant Liability

The Company had freestanding warrants to purchase its convertible preferred stock which were remeasured to fair value at the balance sheet date and for which changes were recognized in other expense within the consolidated statements of operations and comprehensive loss in such periods.

In April 2017, upon the closing of the Company’s IPO, all of the Company's outstanding warrants were exercised for 110,937 shares of common stock.

See Note 10 "Equity" for further discussion.

Net Loss Per Share

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Foreign Currency

The functional currency of the Company’s international subsidiaries is generally the local currency.

The Company translates the financial statements of its international subsidiaries to U.S.

The functional currency of the Company’s non-U.S.

subsidiaries is generally the local currency.

The Company translates the financial statements of its non-U.S.

subsidiaries to U.S.

dollars using month-end exchange rates for assets and liabilities, and average exchange rates for revenue, costs and expenses.

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Concentration of Credit Risk

Certain financial instruments that could be exposed to a concentration of credit risk may include cash and cash equivalents, marketable securities and accounts receivable.

Certain financial instruments that could be exposed to a concentration of credit risk include cash and cash equivalents and accounts receivable.

The Company deposits its cash with financial institutions, and such deposits, at times, may exceed federally insured limits.

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The Company considers all highly liquid investments purchased with original maturities of less than three months from the date of purchase to be cash equivalents.

Marketable Securities

The Company's investments in marketable securities have consisted of debt securities, including U.S.

treasury securities, corporate bonds, and commercial paper.

These investments are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive loss.

Declines in fair value judged to be other-than-temporary on securities available for sale are included as a component of interest income.

In order to determine whether a decline in value is other-than-temporary, the Company evaluates, among other factors, the length of time and extent to which the fair value has been less than the carrying value and its intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value.

The Company considers all of its investments in marketable securities, irrespective of the maturity date, as available for use in current operations, and therefore classifies these securities within current assets on the consolidated balance sheets.

The cost of securities sold is based on the specific-identification method.

Interest on securities classified as available for sale is also included as a component of interest income.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection.

The Company estimates its allowance for doubtful accounts based on historical loss patterns and the number of days that billings are past due.

Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued.

The Company estimates its allowance for doubtful accounts based on historical loss patterns, the number of days that billings are past due, current market conditions, and reasonable and supportable forecasts of future economic conditions, in accordance with ASC 326 "Financial Instruments-Credit Losses." Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued.

The following table summarizes the allowance for doubtful accounts activity:

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Property and equipment are recorded at cost and depreciated or amortized on a straight-line basis over their estimated useful lives.

Furniture and fixtures have an estimated useful life of five years , while office equipment and computer software, which include capitalized software development costs, see "capitalized software development costs" section of this Note for further information, have an estimated useful life of two to three years .

Furniture and fixtures have an estimated useful life of five years .

Office equipment has an estimated useful life of three years .

Computer software, which includes capitalized software development costs, has an estimated useful life of two to three years .

Leasehold improvements and assets held under operating leases are depreciated over the shorter of the term of the lease or their useful life.

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The Company classifies leases as operating or financing in nature, and records the associated lease liability and right-of-use asset on its balance sheet.

The lease liability represents the present value of future lease payments, net of lease incentives, discounted using an incremental borrowing rate, which is a management estimate based on the information available at the commencement date of a lease arrangement.

at the commencement date of a lease arrangement.

With respect to operating lease arrangements, the Company accounts for lease components, and non-lease components that are fixed, as a single lease component.

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such short-term leases are not recorded on the balance sheet.

Prior to adoption, during the fiscal years ended January 31, 2019 and 2018, the Company accounted for leases under ASC 840, whereby rent expense associated with operating leases was recognized on a straight-line basis over the lease term.

Prior to adoption, during the fiscal year ended January 31, 2019, the Company accounted for leases under ASC 840, whereby rent expense associated with operating leases was recognized on a straight-line basis over the lease term.

Goodwill and Intangible Assets

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significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of acquired assets or the strategy of the Company’s overall business, significant negative industry or economic trends and a significant decline in the value of the Company’s enterprise value for a sustained period.

The Company’s intangible assets with definite lives, which include customer relationships and domains, are amortized on a straight-line basis over their estimated useful lives, which range from 5 to 15 years.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets

may not be recoverable in accordance with ASC Topic 360, “Property, Plant, and Equipment.” The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company’s intangible assets with definite lives consist of customer relationships and domains, which are amortized on a straight-line basis over their estimated useful lives of 7 and 15 years, respectively.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable in accordance with ASC Topic 360, “Property, Plant, and Equipment.” The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company has not recorded impairment charges on intangible assets for the periods presented in these consolidated financial statements.

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New Accounting Standard To Be Adopted - ASU 2019-12

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments." This standard changes the impairment model for most financial assets, which includes the Company’s accounts receivables and certain potential financial instruments.

The new model uses a forward-looking expected loss method, which may result in earlier recognition of allowances for losses, and require expected credit losses to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities.

The Company plans to adopt this standard on February 1, 2020 and does not expect it to have a material effect on the Company's consolidated financial statements.

New Accounting Standard To Be Adopted - ASU 2019-12

In December 2019, the FASB issued ASU 2019-12 "Simplifying the Accounting for Income Taxes", which simplifies the accounting for income taxes, eliminates certain exceptions within ASC Topic 740, "Income Taxes," and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

The Company plans to adopt this standard on February 1, 2021 and is currently evaluating the effect on the Company's consolidated financial statements.

The Company plans to adopt this standard on February 1, 2021 and does not expect the adoption to have a material impact on the Company's consolidated financial statements.

Disaggregation of Revenue

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International revenue is predominantly attributable to European countries, but also includes Japan.

The Company's revenue attributable to the United States represented 82 %, 85 %, and 89 % of total revenue, and revenue attributable to Switzerland, which serves as one of the Company's contracting entities for Europe, represented 14 %, less than 10%, and less than 10% of total revenue, respectively, for the fiscal years ended January 31, 2020, 2019, and 2018.

No other countries represented more than 10% percent of total revenue during the fiscal years ended January 31, 2020, 2019, and 2018.

The Company's revenue attributable to the United States represented 80 %, 82 %, and 85 % of total revenue, and revenue attributable to Switzerland, which serves as one of the Company's contracting entities for Europe, represented 16 %, 14 %, and less than 10% of total revenue, respectively, for the fiscal years ended January 31, 2021, 2020 and 2019.

No other individual country represented more than 10% of total revenue during the fiscal years ended January 31, 2021, 2020 and 2019.

Significant Judgments

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The Company predominantly recognizes revenue through its performance obligation of a subscription and associated support to the Yext platform.

The performance obligation is

distinct because a customer's use of the Yext platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.

The performance obligation is distinct because a customer's use of the Yext platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.

In certain instances, the Company enters into a contract with a customer that includes a promise to provide certain technical or customized professional services, in addition to a promise to provide its subscription and associated support.

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The Company's contract liabilities consist primarily of unearned revenue and, to a lesser extent, customer deposits.

As of January 31, 2020 and 2019, unearned revenue, current was $ 176.8 million and $ 135.5 million and unearned revenue, non-current was $ 0.4 million and $ 0.1 million, respectively, and were included within Other long term liabilities on the Company's consolidated balance sheet.

As of January 31, 2021 and 2020, unearned revenue, current was $ 191.8 million and $ 176.8 million, while unearned revenue, non-current, which is included within other long term liabilities on the Company's consolidated balance sheet was $ 0.2 million and $ 0.4 million, respectively.

Unearned revenue represents amounts billed, or payments received, in advance of revenue recognition for which the Company has an unconditional obligation to transfer goods or services associated with a non-cancelable contract.

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The portion of unearned revenue expected to be recognized during the succeeding twelve-month period is classified as unearned revenue, current, and the remaining portion is classified within other long term liabilities in the Company’s consolidated balance sheet.

Revenue recognized of $ 135.2 million during the fiscal year ended January 31, 2020 was included in unearned revenue at the beginning of the period.

Substantially all of the $ 176.8 million of unearned revenue, current as of January 31, 2020 was subsequently recognized as revenue during the fiscal year ended January 31, 2021.

Customer deposits represent payments received in advance in instances where a revenue contract is cancelable in nature, and therefore the Company does not have an unconditional obligation to transfer control to a customer.

As of January 31, 2021 and 2020, customer deposits of $ 0.2 million and $ 0.9 million were included in accounts payable, accrued expenses and other current liabilities on the Company's consolidated balance sheet, respectively.

Prior to the adoption of ASU 2014-09, during the fiscal year ended January 31, 2018, the Company categorized unearned revenue and customer deposits within Deferred revenue.

Deferred revenue consisted of billings or payments received in advance of revenue recognition from contracts, irrespective of whether cancelable or non-cancelable in nature.

Remaining Performance Obligations

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As of January 31, 2020, the Company had $ 328.1 million of remaining performance obligations.

Investments in Marketable Securities

As of January 31, 2020, the Company had no marketable securities on its consolidated balance sheet.

The following table summarize the Company's investments in marketable securities as of January 31, 2019:

(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Corporate bonds $ 16,949 $ — $ ( 28 ) $ 16,921

treasury securities 34,112 — ( 12 ) 34,100

Total marketable securities $ 51,061 $ — $ ( 40 ) $ 51,021

The Company classifies interest income on investments in marketable securities, amortization of premiums and accretion of discounts, realized gains and losses and other-than-temporary declines in fair value on securities available for sale within Interest income in the statement of operations and comprehensive loss.

The Company had no material reclassification adjustments out of accumulated other comprehensive loss into net loss in any of the periods presented.

Fair Value of Financial Instruments

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Level 3 inputs are based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

The Company's assets measured at fair value on a recurring basis, by level, within the fair value hierarchy are as follows:

January 31, 2020

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds (1)

$ 190,774 $ — $ — $ 190,774

Restricted Cash:

Money market funds 12,100 — — 12,100

Total cash equivalents and restricted cash $ 202,874 $ — $ — $ 202,874

January 31, 2019

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds (1)

$ 42,021 $ — $ — $ 42,021

Marketable securities:

Corporate bonds — 16,921 — 16,921

treasury securities — 34,100 — 34,100

Total cash equivalents and marketable securities $ 42,021 $ 51,021 $ — $ 93,042

(1) Included in cash and cash equivalents on the consolidated balance sheets.

The Company's cash equivalents, restricted cash and marketable securities for the periods presented were valued using quoted market prices, or alternative pricing sources and models utilizing observable market inputs, and accordingly, were classified as Level 1 or Level 2, respectively.

As of January 31, 2021 the Company had $ 138.8 million of money market funds included in cash and cash equivalents.

As of January 31, 2020, the Company had $ 190.8 million of money market funds included in cash and cash equivalents and $ 12.1 million of money market funds included in restricted cash on the Company's consolidated balance sheet.

These assets were valued using quoted market prices and accordingly were classified as Level 1.

Goodwill and Intangible Assets

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The changes to goodwill during these periods were due to foreign currency translation adjustments.

Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level, which is at or one level below the operating segment level.

The Company conducted its annual impairment test for goodwill as of November 1 st for each of the fiscal years ended January 31, 2021 and 2020.

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Intangible Assets

The Company’s intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from 5 to 15 years.

As of January 31, 2021 and 2020, the Company had intangible assets, net of $ 0.8 million and $ 1.3 million, respectively.

Intangible assets, net included customer relationships of $ 0.5 million and $ 1.1 million as well as domains of $ 0.2 million and $ 0.3 million, as of January 31, 2021 and 2020, respectively.

Customer relationships had a weighted average remaining useful life of 0.9 years and domains had a weighted average remaining useful life of 10.0 years as of January 31, 2021.

For the fiscal years ended January 31, 2021, 2020 and 2019, amortization expense related to intangible assets totaled $ 0.6 million for each period.

As of January 31, 2021, the future amortization expense of intangible assets is expected to be $ 0.6 million for the fiscal year ending January 31, 2022 and less than $ 0.1 million per year through the fiscal year ending January 31, 2032.

Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

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However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future.

The following table summarizes the Company's intangible assets with remaining net book value as of the following periods:

January 31, 2020

(in thousands) Gross Fair Value Accumulated Amortization Foreign Currency Impact Net Book Value Weighted Average Remaining Useful Life

Domains $ 365 $ ( 99 ) $ — $ 266 11.0

Customer relationships 5,256 ( 2,946 ) ( 1,233 ) 1,077 1.9

Intangible assets as of January 31, 2020 $ 5,621 $ ( 3,045 ) $ ( 1,233 ) $ 1,343 3.7

January 31, 2019

(in thousands) Gross Fair

Value Accumulated

Amortization Foreign

Currency Impact Net Book

Value Weighted

Domains $ 365 $ ( 75 ) $ — $ 290 12.0

Customer relationships 5,256 ( 2,371 ) ( 1,233 ) 1,652 2.9

Trade names and trademarks 112 ( 84 ) ( 10 ) 18 0.9

Intangible assets as of January 31, 2019 $ 5,733 $ ( 2,530 ) $ ( 1,243 ) $ 1,960 4.2

For the fiscal years ended January 31, 2020, 2019 and 2018, amortization expense related to intangible assets totaled $ 0.6 million, $ 0.6 million and $ 0.7 million, respectively.

As of January 31, 2020, the future amortization expense of intangible assets was as follows (in thousands):

Fiscal year ending January 31,

2026 and thereafter

Total $ 1,343

Property and Equipment, Net

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(in thousands) January 31, 2021 January 31, 2020

Furniture and fixtures $ 1,347 $ 719

Computer software $ 10,719 $ 10,099

Office equipment 14,856 9,966

Furniture and fixtures 7,344 1,347

Leasehold improvements 57,799 15,170

Computer software 10,099 6,461

Construction in progress 4,469 13,812

Software in progress 5,754 961

Total property and equipment 51,355 28,773

Total property and equipment, gross 100,941 51,355

accumulated depreciation ( 20,597 ) ( 25,155 )

Total property and equipment, net $ 80,344 $ 26,200

Construction in progress consists primarily of leasehold improvements related to operating lease arrangements.

Construction in progress consists primarily of leasehold improvements related to operating lease arrangements for office space primarily associated with the Company's new corporate headquarters in New York, NY.

Software in progress consists of costs incurred in connection with additional functionality to the Yext platform.

As of January 31, 2020 and 2019, more than 80% of the Company’s total property and equipment, net was attributable to the United States, and no other country represented more than 10% of the total property and equipment, net as of those periods.

As of January 31, 2021 and 2020, the Company's property and equipment, net attributable to the United States was 88 % for each period.

No other individual country represented more than 10% of the total property and equipment, net as of those periods.

For the fiscal years ended January 31, 2021, 2020 and 2019, depreciation expense was $ 10.0 million, $ 7.5 million and $ 6.2 million, respectively.

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Accrued employee compensation 16,780 20,622

Accrued capital expenditures 7,002 143

Accrued Knowledge Network application provider fees 3,671 5,561

Accrued professional services and associated costs 2,202 3,077

Accrued sales and use tax 1,185 2,206

Accrued employee stock purchase plan withholdings liability 3,230 3,277

Customer deposits 901 1,144

Other current liabilities 15,329 17,346

Total accounts payable, accrued expenses and other current liabilities $ 54,186 $ 59,482

(1) - As of January 31, 2021 and 2020, accounts payable includes capital expenditures of $ 1.5 million and $ 2.2 million, respectively.

(2) - As of January 31, 2021 and 2020, other current liabilities include capital expenditures of $ 3.0 million and $ 7.0 million, respectively.

Stock-Based Compensation

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No ISO or NQSO is exercisable after 10 years from the date of grant, and option awards will typically vest over a four-year period.

The 2008 Plan was terminated in connection with the adoption of the Company's 2016 Equity Incentive Plan (the "2016 Plan") in December 2016, and since the 2008 Plan termination the Company has not granted and will not grant any additional awards under the 2008 Plan.

However, the 2008 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

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The aggregate intrinsic value of exercised options was $ 31.8 million, $ 48.0 million and $ 79.4 million for the fiscal years ended January 31, 2021, 2020 and 2019, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date.

No options were granted during the fiscal years ended January 31, 2020 and 2019.

The weighted-average grant date fair value of options granted during the fiscal year ended January 31, 2018 was $ 5.79 per share.

Restricted Stock and Restricted Stock Units

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9,545,352 $ 16.71

The estimated weighted-average grant date fair value of restricted stock and restricted stock units granted was $ 15.52 , $ 18.71 , and $ 18.21 per share for the fiscal years ended January 31, 2021, 2020, and 2019, respectively.

The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange.

The total fair value of restricted stock and restricted stock units vested was $ 72.4 million, $ 54.7 million, and $ 30.4 million for the fiscal years ended January 31, 2021, 2020, and 2019, respectively.

Employee Stock Purchase Plan

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As of January 31, 2021, 315,718 shares are estimated to be purchased at the end of the offering period and $ 3.2 million has been withheld on behalf of employees for these future purchases under the ESPP and is included in accounts payable, accrued expenses and other current liabilities.

The Black-Scholes option-pricing model assumptions used to calculate the fair value of shares estimated to be purchased at commencement of an ESPP offering period were as follows:

The Black-Scholes option-pricing model assumptions used to calculate the fair value of shares, estimated at commencement to be purchased during an ESPP offering period were as follows:

Fiscal year ended January 31,

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42.41 % - 60.86 %

34.41 % - 45.09 %

Dividend yield 0.00 % 0.00 % 0.00 %

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1.93 % - 2.52 %

1.95 % - 2.35 %

The expected life assumptions were based on each offering period's respective purchase date.

The Company estimated the expected volatility assumptions based on the average of the historical volatility for a sample of comparable companies for the offering periods beginning April 13, 2017 and March 15, 2018.

Effective with the offering period beginning September 17, 2018, the Company determined it had sufficient historical information and estimated the expected volatility assumption based on the historical volatility of its stock price.

The Company estimated the expected volatility assumption based on the historical volatility of its stock price.

The risk-free rate assumptions were based on the U.S.

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As of January 31, 2021, there was approximately $ 149.9 million of total unrecognized compensation cost related to unvested stock-based awards.

This unrecognized compensation cost is expected to be recognized over an estimated weighted-average vesting period of approximately 2.95 years.

This unrecognized compensation cost is expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.67 years.

During the fiscal years ended January 31, 2021, 2020 and 2019, the Company capitalized $ 2.1 million, $ 1.4 million and $ 0.7 million, respectively, of stock-based compensation related to software development of additional functionality to the Yext platform.

No options were granted during the fiscal years ended January 31, 2020 and 2019.

The fair value of the Company’s stock options granted during the fiscal year ended January 31, 2018 were estimated using the Black-Scholes option-pricing model with the following assumptions:

(i) an expected life of 6.08 years based upon the simplified method for employee grants, as the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate its expected term due to the limited period of time its equity shares have been publicly traded;

(ii) an expected volatility range of 46.39 % - 48.77 % based on the average of the historical volatility for a sample of comparable companies;

(iii) a risk-free rate range of 1.87 % - 2.70 % based on the U.S.

treasury yield curve in effect at the time of the grants;

and, (iv) a dividend yield of zero, as the Company has not historically paid any dividends and does not expect to declare or pay any dividends in the foreseeable future.

Common Stock Offering

On March 20, 2019, the Company closed a common stock offering, in which it issued and sold 7,000,000 shares of common stock, inclusive of the fully exercised underwriters' option to purchase additional shares.

The price per share to the public was $ 21.50 .

The Company received aggregate proceeds of $ 147.0 million from this offering, net of underwriters' discounts and commissions, before deducting offering costs of approximately $ 0.5 million, which were recorded in additional paid in capital in its consolidated statements of convertible preferred stock and stockholders' equity (deficit).

Convertible Preferred Stock

In April 2017, upon the closing of the Company's IPO, all outstanding shares of convertible preferred stock were automatically converted into an aggregate of 43,594,753 shares of common stock and all outstanding warrants exercisable for shares of convertible preferred stock automatically converted into warrants exercisable for 110,937 shares of common stock.

At that time, a final fair value adjustment of $ 0.5 million was recorded to other expense, net and the remaining preferred stock warrant liability of $ 1.4 million was reclassified to stockholders' equity.

Preferred Stock

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As of January 31, 2021 and 2020, the Company had 6,505,334 shares of treasury stock which are carried at its cost basis of $ 11.9 million on the Company's consolidated balance sheets.

On March 16, 2016, the Company entered into a Loan and Security agreement with Silicon Valley Bank that provides for a $ 15.0 million revolving credit line ("Revolving Line") and a $ 7.0 million Letter of Credit facility (together with the Revolving Line, the "Credit Agreement").

In March 2018, the Credit Agreement was amended to extend the maturity date to March 16, 2020.

No significant debt issuance costs were incurred in association with the amendment.

The Company is obligated to pay ongoing commitment fees at a rate equal to 0.25 % for the Revolving Line and 1.75 % for any issued letters of credit.

Subject to certain terms of the Credit Agreement, the Company may borrow, prepay and reborrow amounts under the Revolving Line at any time during the term of the agreement and amounts repaid or prepaid may be reborrowed.

Interest rates on borrowings under the Revolving Line will be based on one-half of one percent ( 0.50 %) above the prime rate.

The prime rate is defined as the rate of interest per annum from time to time published in the money rate section of the Wall Street Journal.

The Credit Agreement contains certain customary affirmative and negative covenants, including an adjusted quick ratio of at least 1.25 to 1.00, minimum revenue, subject to annual updates, a limit on the Company's ability to incur additional indebtedness, dispose of assets, make certain acquisition transactions, pay dividends or make distributions, and certain other restrictions on the Company's activities each defined specifically in the agreement.

In April 2019, in connection with the leasing of office space in New York, NY, the Company established back-to-back standby letters of credit for $ 12.1 million.

The arrangement expires September 30, 2031, and is fully secured by a $ 12.1 million cash deposit.

Such cash is restricted as to its withdrawal and usage as of January 31, 2020, and accordingly, is classified as a restricted cash asset on the Company's consolidated balance sheet.

There were no significant financing costs associated with this transaction.

As of January 31, 2020, the Company was in compliance with all of its debt covenants.

As of such date, the $ 15.0 million Revolving Line was fully available, and the $ 7.0 million Letter of Credit had $ 6.9 million allocated as security in connection with various office space.

Subsequent to the fiscal year ended January 31, 2020, on March 11, 2020, the Company replaced its existing Credit Agreement and entered into a new credit agreement with Silicon Valley Bank (the “March 2020 Credit Agreement”).

The March 2020 Credit Agreement provides for a senior secured revolving loan facility of up to $ 50.0 million that matures three years after the effective date, with the right subject to certain conditions to add an incremental revolving loan facility of up to $ 50.0 million in the aggregate.

On March 11, 2020, the Company entered into a new credit agreement with Silicon Valley Bank (the “Credit Agreement”).

No significant debt issuance costs were incurred in association with the Credit Agreement.

In January 2021, the Company amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.

The Credit Agreement provides for a senior secured revolving loan facility of up to $ 50.0 million that matures three years after the effective date, with the right subject to certain conditions to add an incremental revolving loan facility of up to $ 50.0 million in the aggregate.

The three year revolving loan facility provides for borrowings up to the amount of the facility with sub-limits of up to (i) $ 30.0 million to be available for the issuance of letters of credit and (ii) $ 10.0 million to be available for swingline loans.

Under the March 2020 Credit Agreement, loans bear interest, at the Company's option, at an annual rate based on LIBOR or a base rate.

Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50 % and LIBOR plus 3.00 %, depending on the Company's average daily usage of the revolving loan facility.

Under the Credit Agreement, loans bear interest, at the Company's option, at an annual rate based on LIBOR or a base rate.

Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50 % and LIBOR plus 3.00 %, depending on the Company's

average daily usage of the revolving loan facility.

Loans based on the base rate shall bear interest at a rate between the base rate minus 0.50 % and the base rate plus 0.00 %, depending on the Company's average daily usage of the revolving loan facility.

The obligations under the March 2020 Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company's material direct and indirect domestic subsidiaries and 66 % of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The March 2020 Credit Agreement contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require the Company to maintain the year-over-year growth rate of its ordinary course recurring revenue for a trailing four fiscal quarter period above specified rates when certain liquidity thresholds are not met and to maintain a consolidated quick ratio of at least 1.50 to 1.00 tested on a monthly basis.

The obligations under the Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company's material direct and indirect domestic subsidiaries and 66 % of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The Credit Agreement contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require the Company to maintain the year-over-year growth rate of its ordinary course recurring revenue for a trailing four fiscal quarter period above specified rates when certain liquidity thresholds are not met and to maintain a consolidated quick ratio of at least 1.50 to 1.00 tested on a monthly basis.

As of January 31, 2020, the Company had back-to-back standby letters of credit for $ 12.1 million, which were fully secured by a $ 12.1 million cash deposit and classified as restricted cash on the Company's consolidated balance sheet.

In connection with the Credit Agreement, the $ 12.1 million cash deposit was released and is no longer classified as restricted cash on the Company's consolidated balance sheet as of January 31, 2021.

As of January 31, 2021, the Company was in compliance with all debt covenants.

As of such date, the $ 50.0 million revolving loan facility had $ 35.7 million available and $ 14.3 million in letters of credit allocated as security in connection with office space.

The domestic and international components of the Company's loss from operations before income taxes are as follows:

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Federal ( 28 ) — —

State ( 31 ) — —

International 917 93 43

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Total (provision for) benefit from income taxes $ ( 97 ) $ ( 1,097 ) $ ( 222 )

The Company’s (provision for) benefit from income taxes is primarily attributable to profitable jurisdictions outside of the United States and U.S.

state income taxes.

In the fiscal year ended January 31, 2021, the Company released a portion of its valuation allowance against certain foreign deferred tax assets resulting in an income tax benefit of $ 0.7 million, and recorded a U.S.

tax benefit of $ 0.2 million due the expiration of certain statutes of limitations of unrecognized tax benefits.

The Company reconciled its income taxes at the federal statutory income tax rate to the (provision for) benefit from income taxes included within its consolidated statements of operations and comprehensive loss.

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Rate change 131 ( 7,017 ) 7

Excess tax benefits from stock-based compensation 6,519 16,847 —

Stock-based compensation expense ( 1,929 ) ( 2,064 ) ( 317 )

Net excess tax benefits from stock-based compensation 3,444 6,519 16,847

Return to provision adjustment 16 ( 2,323 ) ( 337 )

Global intangible low-taxes income ( 6,129 ) — —

Intra-entity asset transfer 3,944 — —

Other, net 1,920 ( 1,320 ) 190

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The components of the Company's deferred income taxes were as follows:

Fiscal year ended January 31,

As of January 31,

(in thousands) 2021 2020

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Deferred tax liabilities:

Prepaid expenses — ( 57 )

Property and equipment ( 2,062 ) —

Intangible assets — ( 1,479 )

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Utilization of the Company’s foreign NOL carryforwards in the future will be dependent upon the local tax law and regulation.

During the fiscal year ended January 31, 2021, the Company completed transfers of certain non-U.S.

customer contracts and the related intangible assets from one of its local subsidiaries to the U.S.

in order to better align the ownership of these rights with how the business operates.

The transfer resulted in no incremental tax expense in the local jurisdiction, as there were sufficient NOL available to fully offset the tax gain.

Additionally, the Company recognized deferred tax assets for the book and tax basis difference on the transferred assets in the U.S., which were fully offset against its valuation allowance.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized.

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Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome.

During the fiscal year ended January 31, 2020, the valuation allowance increased $ 24.4 million from approximately $ 80.9 million to $ 105.3 million, primarily due to the impact of the NOL carryforwards established in the current period and other increases in U.S.

During the fiscal year ended January 31, 2021, the valuation allowance had a net increase of $ 23.9 million from approximately $ 105.3 million to $ 129.2 million, primarily due to the impact of the NOL carryforwards established in the current period and other increases in U.S.

deferred tax assets.

The increase in the valuation allowance was partially offset by the use of the NOL in the local jurisdiction due to the intra-entity asset transfer.

The Company also released a portion of the valuation allowance in certain foreign jurisdictions, as these jurisdictions demonstrated a sustained profitability evidenced by three consecutive years of positive earnings as well as forecasted continuing profitability.

13 unchanged sentences

Gross increases — 13 —

Lapse of statute of limitations ( 233 ) — —

Currency translation effect 20 ( 7 ) —

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As of January 31, 2021, 2020, and 2019 accrued unrecognized tax benefits were $ 0.3 million, $ 0.5 million, and $ 0.2 million, respectively, and if recognized would reduce the (provision for) benefit from income taxes, and the Company's effective tax rate.

During the fiscal year ended January 31, 2021, the Company released $ 0.2 million unrecognized tax benefits due to a lapse in the statute of limitations.

The Company does not expect any significant change in its unrecognized tax benefits during the next twelve months.

The Company is subject to taxation in the United States and various state and foreign jurisdictions.

The Company is subject to income tax examinations in the United States and various state and foreign jurisdictions.

The Company’s most significant operations are in the United States and the earliest open tax year subject to potential examination in the United States is 2008.

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The operating lease arrangements included in the measurement of lease liabilities do not include short-term leases as discussed in Note 2, "Summary of Significant Accounting Policies", and had a weighted-average remaining lease term of 9.5 years and a weighted-average discount rate of 5.7 %, as of January 31, 2021.

During the fiscal year ended January 31, 2020, the Company entered into new operating lease arrangements for office space, including in Rosslyn, VA, London, UK and New York, NY, each of which have expiration dates subsequent to the fiscal year ending January 31, 2025.

During the fiscal year ended January 31, 2020, the Company recognized $ 21.2 million of lease expense, which consisted of operating lease expense of $ 16.8 million, short-term lease expense of $ 2.2 million, and variable lease expense of $ 2.2 million, respectively.

During the fiscal year ended January 31, 2021, the Company paid $ 11.6 million for amounts included in the measurement of lease liabilities and obtained $ 7.2 million of operating lease right-of-use assets in exchange for lease obligations.

During the fiscal years ended January 31, 2019 and 2018, rent expense was $ 7.3 million and $ 6.3 million, respectively.

T he total remaining operating lease payments included in the measurement of lease liabilities on the Company's consolidated balance sheet as of January 31, 2020, was as follows (in thousands):

In May 2020, the Company entered into a Surrender Agreement (the "Surrender Agreement") of its lease arrangement for its prior corporate headquarters in New York, NY.

The previous lease arrangement was scheduled to expire in December 2020.

Pursuant to the Surrender Agreement, the Company's lease obligations continued through August 31, 2020.

During the fiscal years ended January 31, 2021 and 2020, the Company recognized $ 25.7 million and $ 21.2 million, of lease expense, respectively, which consisted of the following:

Fiscal year ended January 31,

(in thousands) 2021 2020

Operating lease expense $ 20,134 $ 16,820

Short-term lease expense 1,053 2,259

Variable lease expense 4,475 2,153

Total lease expense $ 25,662 $ 21,232

Operating lease expense is recognized on a straight-line basis over the term of the arrangement beginning on the lease commencement date for lease arrangements that have an initial term greater than twelve months and therefore are recorded on the balance sheet.

For the fiscal year ended January 31, 2021, operating lease expense includes lease expense related to the Company's lease arrangement associated with its new corporate headquarters in New York, NY, which commenced in May 2019.

Short-term lease expense is recognized on a straight-line basis over the lease term for lease arrangements that have an initial term of 12 months or less and therefore are not recorded on the balance sheet.

Variable lease expense is recognized as incurred and consists of real estate taxes and utilities, among other office space related expenses.

During the fiscal year ended January 31, 2019, rent expense was $ 7.3 million.

The total remaining operating lease payments included in the measurement of lease liabilities on the Company's consolidated balance sheet as of January 31, 2021, was as follows (in thousands):

Fiscal year ending January 31:

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The Company is obligated to make payments under certain non-cancelable contractual obligations in the normal course of business.

The Company's obligations primarily relate to its contractual operating lease arrangements for office space, as well as its other obligations, including contracts with its Knowledge Network application providers, which generally have a term of one year, and software vendors, among others.

The Company's contractual obligations primarily relate to its operating lease arrangements for office space.

Its other contractual obligations include contracts with its Knowledge Network application providers, which generally have a term of one year, although some have a term of several years, and its software vendors, among others.

These obligations represent minimum contractual payments, or the Company's best estimate for variable elements based on historical payments.

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2027 and thereafter

112,238 2,860

Total $ 187,685 $ 50,934

Performance Bond

The Company's operating lease arrangement associated with office space in New York, NY requires a performance bond to secure the completion of certain potential construction work, when a reasonable estimate of such work is available.

As of January 31, 2020, the Company has not executed or issued a performance bond and no payments have been made.

Performance and Payment Bond

The Company's operating lease arrangement associated with its new corporate headquarters in New York, NY requires performance and payment bonds to secure the completion of certain potential construction work, when a reasonable estimate of such work is available.

In connection with these bonds, as of January 31, 2021, the Company paid $ 0.9 million in issuance costs which are recognized as operating expense over the estimated construction period in the Company's consolidated statement of operations.

Legal Proceedings

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The Company has also agreed to indemnify certain of its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by the Company, arising out of that person's services as the Company's director or officer or that person's services provided to any other company or enterprise at the Company's request.

The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid.

The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of future amounts paid.

The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

35 unchanged sentences

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 7A. Quantitative and Qualitative Disclosures About Market Risk