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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-Q
__________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-40601
__________________________________
Couchbase, Inc.
(Exact name of registrant as specified in its charter)
__________________________________
Delaware26-3576987
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3250 Olcott Street
Santa Clara, California 95054
(Address of principal executive offices and Zip Code)
(650) 417-7500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.00001 per shareBASENasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filer
x
Smaller reporting companyo
 Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No x
As of May 31, 2022, the registrant had 44,551,077 shares of common stock outstanding.


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Exhibit Index
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Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our expectations regarding:
our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, our ability to determine reserves and our ability to achieve and maintain future profitability;
the sufficiency of our cash, cash equivalents and short-term investments to meet our liquidity needs;
the demand for our products and services or for data management solutions in general;
our ability to attract and retain customers and partners;
our ability to develop new products and features and bring them to market in a timely manner and make enhancements to our offerings, as well as market acceptance of new products and features;
our expectations regarding future developments with respect to Couchbase Capella, our fully-managed database-as-a-service, or DBaaS, offering;
our ability to compete with existing and new competitors in existing and new markets and offerings;
the impact of the COVID-19 pandemic and associated economic downturn on our business and results of operations;
our expectations regarding the effects of existing and developing laws, rules, regulations and other legal obligations, including with respect to taxation and data privacy and security;
our ability to manage risk associated with our business;
our expectations regarding new and evolving markets;
our ability to maintain, develop and protect our brand;
our ability, and our customers’ and our third-party service providers’ ability, to maintain the security and availability to each of our technological and physical infrastructures;
our expectations and management of future growth;
our expectations concerning relationships with third parties;
our ability to obtain, maintain, defend and enforce our intellectual property;
our use of third-party open source software in our solutions and the availability of portions of our source code on an open source basis;
our ability to successfully acquire and integrate companies and assets; and
the increased expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events.
We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment.
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New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Risk Factor Summary
Our business is subject to significant risks and uncertainties that make an investment in us speculative and risky. Below we summarize what we believe are the principal risk factors but these risks are not the only ones we face. You should carefully review and consider the full discussion of our risk factors below this summary, together with the other information in this Quarterly Report on Form 10-Q. If any of the following risks or if any of those listed elsewhere in this Quarterly Report on Form 10-Q actually occur, our business, reputation, financial condition, results of operations, revenue and future prospects could be seriously harmed. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.
We have a history of net losses, may not achieve or maintain profitability in the future and may not continue to grow on pace with historical rates.
We face intense competition and if we are unable to compete effectively, our business, financial condition and results of operations would be adversely affected.
We may fail to cost-effectively acquire new customers or obtain renewals, upgrades or expansions from our existing customers, which would adversely affect our business, financial condition and results of operations.
The market for our products and services is relatively new and evolving, and our future success depends on the growth and expansion of this market.
If we fail to innovate in response to changing customer needs, new technologies or other market requirements, our business, financial condition and results of operations could be harmed.
We have a limited operating history, which makes it difficult to predict our future results of operations.
Our future results of operations may fluctuate significantly, and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
We recognize a significant portion of revenue from subscriptions over the term of the relevant subscription period, and as a result, downturns or upturns in sales are not immediately reflected in full in our results of operations.
We depend on our sales force, and we may fail to attract, retain, motivate or train our sales force, which could adversely affect our business, financial condition and results of operations.
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Our sales strategy to target larger enterprises involves risks that may not be present or that are present to a lesser extent with respect to smaller enterprises, such as long and unpredictable sales cycles and sales efforts that require considerable time and expense.
If we are not able to maintain and enhance our brand, especially among enterprise architects, application developers and other key functions that support them, our business and results of operations may be adversely affected.
The global COVID-19 pandemic has harmed and could continue to harm our business and results of operations, as could other pandemics, natural disasters, political crises or other unexpected events.
Our business could be adversely affected by economic downturns.
Real or perceived errors, failures or bugs in our products or interruptions or performance problems associated with our technology and infrastructure could adversely affect our growth prospects, business, financial condition and results of operations.
Our ability to maintain and increase sales with our existing customers depends, in part, on the quality of our customer support, and our failure to offer high-quality support would harm our reputation and adversely affect our business and results of operations.
We track certain operational metrics with internal systems and tools and do not independently verify such metrics. Certain of our operational metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in such metrics may adversely affect our business and reputation.
Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.
We may be unable to make acquisitions and investments or successfully integrate acquired companies into our business, and our acquisitions and investments may not meet our expectations, any of which could adversely affect our business, financial condition and results of operations.
If we are unable to maintain successful relationships with our partners, our business, financial condition and results of operations could be harmed.
Certain estimates and information we refer to publicly are based on information from third-party sources and we do not independently verify the accuracy or completeness of the data contained in such sources or the methodologies for collecting such data, and any real or perceived inaccuracies in such estimates and information may harm our reputation and adversely affect our business.
Our use of third-party open source software in our solutions, the availability of core portions of our source code on an open source basis and contributions to our open source projects could negatively affect our ability to sell our products and provide our services, subject us to possible litigation and allow third parties to access and use software and technology that we use in our business, all of which could adversely affect our business and results of operations.
Our distribution and licensing model could negatively affect our ability to monetize and protect our intellectual property rights.
Because of the rights accorded to third parties under open source licenses, there may be fewer technology barriers to entry in the markets in which we compete and it may be relatively easy for new and existing competitors, some of whom may have greater resources than we have, to compete with us.
Our decision to license certain source code under a source-available license, the Business Source License version 1.1, or BSL 1.1, may harm the adoption of our source code.
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We could incur substantial costs in obtaining, maintaining, protecting, defending and enforcing our intellectual property rights and any failure to obtain, maintain, protect, defend or enforce our intellectual property rights could reduce the value of our software and brand.
We have been and may in the future become subject to intellectual property disputes which may be costly to defend, subject us to significant liability, require us to pay significant damages and limit our ability to use certain technologies.
If our security measures, or those of our service providers or customers, are breached or unauthorized parties otherwise obtain access to our or our customers’ data or software, our products and services may be perceived as not being secure, customers may reduce or terminate their use of our products and services and we may face claims, litigation, regulatory investigations, significant liability and reputational damage.
A portion of our revenue is generated by sales to heavily regulated organizations, which are subject to a number of challenges and risks.
Our executive officers, directors and holders of 5% or more of our common stock continue to have substantial control over us, which will limit your ability to influence the outcome of important transactions, including a change in control.
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Part I – Financial Information
Item 1. Financial Statements (unaudited)
COUCHBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share amounts)
As of April 30,As of January 31,
20222022
Assets
Current assets
Cash and cash equivalents
$47,672 $95,688 
Short-term investments
153,409 110,266 
Accounts receivable, net
24,622 36,696 
Deferred commissions
11,548 11,783 
Prepaid expenses and other current assets
8,014 8,559 
Total current assets
245,265 262,992 
Property and equipment, net
4,341 4,288 
Operating lease right-of-use assets7,668  
Deferred commissions, noncurrent
8,267 8,243 
Other assets
1,453 1,219 
Total assets
$266,994 $276,742 
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable
$2,640 $1,923 
Accrued compensation and benefits
8,025 16,143 
Other accrued expenses
2,946 3,231 
Operating lease liabilities
2,717  
Deferred revenue
68,466 69,010 
Total current liabilities
84,794 90,307 
Operating lease liabilities, noncurrent
5,627  
Deferred revenue, noncurrent
2,289 2,713 
Other liabilities
 507 
Total liabilities
92,710 93,527 
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.00001 par value; 200,000,000 shares authorized as of April 30, 2022 and January 31, 2022; zero shares issued outstanding as of April 30, 2022 and January 31, 2022
  
Common stock, $0.00001 par value; 1,000,000,000 shares authorized as of April 30, 2022 and January 31, 2022; 44,537,296 and 43,847,484 shares issued and outstanding as of April 30, 2022 and January 31, 2022, respectively
  
Additional paid-in capital
536,981 525,392 
Accumulated other comprehensive loss
(881)(195)
Accumulated deficit
(361,816)(341,982)
Total stockholders’ equity
174,284 183,215 
Total liabilities and stockholders’ equity
$266,994 $276,742 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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COUCHBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended April 30,
20222021
Revenue:
License$5,007 $4,278 
Support and other26,974 22,187 
Total subscription revenue31,981 26,465 
Services2,872 1,490 
Total revenue34,853 27,955 
Cost of revenue:
Subscription2,396 2,052 
Services2,255 1,340 
Total cost of revenue4,651 3,392 
Gross profit30,202 24,563 
Operating expenses:
Research and development14,421 12,541 
Sales and marketing26,843 20,634 
General and administrative7,926 5,497 
Total operating expenses49,190 38,672 
Loss from operations(18,988)(14,109)
Interest expense(25)(245)
Other income (expense), net(556)84 
Loss before income taxes(19,569)(14,270)
Provision for income taxes265 329 
Net loss$(19,834)$(14,599)
Cumulative dividends on Series G redeemable convertible preferred stock (1,479)
Net loss attributable to common stockholders$(19,834)$(16,078)
Net loss per share attributable to common stockholders, basic and diluted$(0.45)$(2.55)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted44,265 6,302 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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COUCHBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(in thousands)
Three Months Ended April 30,
20222021
Net loss$(19,834)$(14,599)
Other comprehensive income (loss):
Net unrealized gains (losses) on investments, net of tax(686)(2)
Total comprehensive loss$(20,520)$(14,601)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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COUCHBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
(unaudited)
(in thousands, except shares)
Redeemable
Convertible
Preferred Stock
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
(Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
(Deficit)
Shares Amount Shares Amount
Balance as of January 31, 2022— $— 43,847,484 $— $525,392 $(195)$(341,982)$183,215 
Issuance of common stock upon exercise of stock options— — 452,313 — 2,614 — — 2,614 
Issuance of common stock in connection with employee stock purchase plan— — 237,499 — 3,525 — — 3,525 
Stock-based compensation— — — — 5,450 — — 5,450 
Net unrealized gains (losses) on investments— — — — — (686)— (686)
Net loss— — — — — — (19,834)(19,834)
Balance as of April 30, 2022— $— 44,537,296 $— $536,981 $(881)$(361,816)$174,284 
Redeemable
Convertible
Preferred Stock
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
(Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
(Deficit)
SharesAmount Shares Amount
Balance as of January 31, 202126,070,213 $259,822 6,199,305 $— $37,410 $1 $(283,753)$(246,342)
Issuance of common stock upon exercise of stock options— — 261,563 — 1,447 — — 1,447 
Stock-based compensation— — — — 1,829 — — 1,829 
Net unrealized gains (losses) on investments— — — — — (2)— (2)
Net loss— — — — — — (14,599)(14,599)
Balance as of April 30, 202126,070,213 $259,822 6,460,868 $— $40,686 $(1)$(298,352)$(257,667)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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COUCHBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended April 30,
20222021
Cash flows from operating activities
Net loss$(19,834)$(14,599)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization739 708 
Stock-based compensation5,450 1,829 
Amortization of deferred commissions4,009 2,958 
Non-cash lease expense648  
Foreign currency transaction (gains) losses974 (75)
Other198 34 
Changes in operating assets and liabilities
Accounts receivable11,781 18,557 
Deferred commissions(3,798)(2,718)
Prepaid expenses and other assets312 (1,898)
Accounts payable731 1,021 
Accrued compensation and benefits(8,112)(3,274)
Accrued expenses and other liabilities(71)(668)
Operating lease liabilities(666) 
Deferred revenue(968)(5,064)
Net cash used in operating activities(8,607)(3,189)
Cash flows from investing activities
Purchases of short-term investments(53,630)(1,726)
Maturities of short-term investments9,600 5,190 
Additions to property and equipment(799)(230)
Net cash provided by (used in) investing activities(44,829)3,234 
Cash flows from financing activities
Proceeds from exercise of stock options2,614 1,447 
Proceeds from issuance of common stock under ESPP3,525  
Payments of deferred offering costs (1,439)
Net cash provided by financing activities6,139 8 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(719)(6)
Net increase (decrease) in cash, cash equivalents and restricted cash(48,016)47 
Cash, cash equivalents and restricted cash
Beginning of period96,231 37,840 
End of period$48,215 $37,887 
Cash and cash equivalents$47,672 $37,344 
Restricted cash included in other assets543 543 
Total cash, cash equivalents and restricted cash$48,215 $37,887 
Supplemental disclosures of cash activities
Cash paid for income taxes$275 $271 
Cash paid for interest$25 $246 
Non-cash investing and financing activities:
Net change in unrealized gains or losses on available-for-sale debt securities$(686)$(3)
Change in deferred offering costs included in accounts payable and other accrued liabilities$ $102 
Change in purchases of property and equipment included in accounts payable and other accrued liabilities$(9)$(227)
The accompanying notes are an integral part of these condensed consolidated financial statements
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COUCHBASE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Description of Business
Couchbase, Inc. provides an enterprise-class, multi-cloud NoSQL database architected on top of an open source foundation. Couchbase was incorporated in the State of Delaware in 2008 and is headquartered in Santa Clara, California. In these notes to the unaudited condensed consolidated financial statements, the “Company,” “Couchbase,” “we,” “us” and “our” refers to Couchbase, Inc. and its subsidiaries on a consolidated basis.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Company’s unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of January 31, 2022, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all the information required by GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of only normal recurring adjustments) that are necessary for the fair statement of the Company’s condensed consolidated financial information. The results of operations for the three months ended April 30, 2022, are not necessarily indicative of the results to be expected for the year ending January 31, 2023, or for any other interim period or for any other future year.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company's Annual Report on Form 10-K for the year ended January 31, 2022, as filed with the SEC on March 31, 2022.
Initial Public Offering
In July 2021, the Company completed its initial public offering (“IPO”), for the sale and issuance of $9,589,999 shares of its common stock at $24.00 per share, which included 1,250,869 shares issued pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $214.9 million, after deducting underwriters’ discounts and commissions and before consideration of other issuance costs. In connection with the IPO, all 26,710,600 shares of outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of common stock, inclusive of 640,387 shares of additional stock issued related to preferred stock conversion and dividend features.
Reverse Stock Split
On June 30, 2021, the Company effected a 2.5 -for-1 reverse stock split of its outstanding common stock, common stock warrants, preferred stock, and stock option awards. All issued and outstanding shares of common stock, common stock warrants, preferred stock, stock option awards and per share data have been adjusted in these condensed consolidated financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented. The par value of the common stock and preferred stock was not adjusted because of the reverse stock split.
Fiscal Year
The Company’s fiscal year ends on January 31. Unless otherwise stated, references to year in these condensed consolidated financial statements relate to fiscal year rather than calendar year.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of Couchbase, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts stated in the financial statements and accompanying notes. Such estimates include standalone selling prices (“SSP”) for each distinct performance obligation, capitalized internal-use software costs, expected period of benefit for deferred commissions, valuation of the Company's common stock prior to the IPO in July 2021, valuation of stock-based awards, the determination of allowance for doubtful accounts, the incremental borrowing rate used to measure operating liabilities, and accounting for income taxes. The Company bases its estimates on historical experience and assumptions that management considers reasonable.
The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates. Estimates and assumptions about future events and their effects, including the impact of the COVID-19 pandemic, cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the condensed consolidated financial statements as new events occur and additional information becomes known. To the extent the Company’s actual results differ materially from those estimates and assumptions, the Company’s future financial statements could be affected.
COVID-19
While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions, it has already had an adverse effect on the global economy and the lasting effects of the pandemic continue to be unknown. The Company may experience customer losses, including due to bankruptcy or customers ceasing operations, which may result in delays in collections or an inability to collect accounts receivable from these customers. The impact of COVID-19 on the Company’s financial condition, results of operations, or liquidity continues to remain uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, which will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.
Significant Accounting Policies
Except for the accounting policy for leases, which was updated as a result of adopting a new accounting standard, there have been no material changes to the significant accounting policies that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022.
See “Recently Adopted Accounting Pronouncements” below for additional information on the impact of the adoption of the new accounting standard for leases on the Company’s consolidated financial statements.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software, 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 the amendments in this ASU. The Company adopted this guidance on February 1, 2022 prospectively for implementation costs incurred after the date of adoption, 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 amending and clarifying existing guidance in ASC 740, as well as removing certain exceptions within ASC 740. The Company adopted this guidance on February 1, 2022, and the adoption did not have a material impact on its consolidated financial statements.

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Leases
In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02 and several amendments, codified as ASC 842, Leases which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use ("ROU") asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. The Company adopted the guidance on February 1, 2022 utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of fiscal 2023.
The Company elected the package of transitional practical expedients upon which, among other provisions, allowed the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs, for any existing leases on the adoption date. The Company elected not to record leases that, at the commencement date, have a lease term of 12 months or less. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of ROU assets. The Company also did not elect to combine its lease and non-lease components. Non-lease components that are not fixed are expensed as incurred as variable lease payments.
Lease ROU assets and liabilities, with the exception of short-term leases, are recognized at the commencement date based on the present value of lease payments over the lease term. The Company estimates the discount rate based on the information available at the lease commencement date unless the implicit rate is readily determinable. For leases that commenced prior to the adoption of Topic 842, the Company used the discount rate on February 1, 2022. The lease ROU assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances. Options to extend the lease term are included in the lease term when it is reasonably certain the extension option will be exercised.
Upon adoption of ASC 842, the Company recognized operating lease ROU assets and operating lease liabilities of $6.7 million and $7.5 million, respectively, as of February 1, 2022 and did not include any retrospective adjustments to comparative periods to reflect the adoption of ASC 842. The difference of $0.8 million between operating lease ROU assets and operating lease liabilities at the adoption date related to deferred rent.
See Note 8, “Leases” to the Notes to Condensed Consolidated Financial Statements for more information.
Accounting Pronouncements Not Yet Adopted
Under the JOBS Act, the Company meets the definition of an emerging growth company and can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period.
In June 2016, the FASB issued ASU 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 will be 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 plans to adopt this standard on February 1, 2023 and is currently evaluating the impact of the adoption on its condensed consolidated financial statements.
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3. Cash Equivalents and Short-Term Investments
The following tables summarize the Company’s cash equivalents and short-term investments (in thousands):
As of April 30, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash Equivalents
Money market funds$42,651 $— $— $42,651 
Total cash equivalents42,651 — — 42,651 
Short-Term Investments
U.S. government treasury securities86,841  (735)86,106 
Commercial paper35,784  (1)35,783 
Corporate debt securities31,665  (145)31,520 
Total short-term investments154,290  (881)153,409 
Total$196,941 $ $(881)$196,060 
As of January 31, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash Equivalents
Money market funds$86,505 $— $— $86,505 
Total cash equivalents86,505 — — 86,505 
Short-Term Investments
U.S. government treasury securities39,340  (129)39,211 
Commercial paper40,966  (1)40,965 
Corporate debt securities30,156  (66)30,090 
Total short-term investments110,462  (196)110,266 
Total$196,967 $ $(196)$196,771 
During the three months ended April 30, 2022 and 2021, the Company did not reclassify any amounts to earnings from accumulated other comprehensive income (loss) related to unrealized gains or losses in other income (expense), net in the condensed consolidated statements of operations.
As of April 30, 2022 the Company’s short-term investments consisted of $123.2 million and $30.2 million with a contractual maturity date of less than one year and greater than one year, respectively. As of January 31, 2022, the Company’s short-term investments consisted of $108.3 million and $2.0 million with a contractual maturity of less than one year and greater than one year, respectively.
As of April 30, 2022, the Company had 32 short-term investments in an unrealized loss position. These short-term investments had an estimated fair value of $118.6 million and were not in a continuous unrealized loss position for more than twelve months. As of January 31, 2022, the Company had 25 short-term investment in an unrealized loss position. This short-term investment had an estimated fair value of $71.8 million and was not in a continuous unrealized loss position for more than twelve months. During the three months ended April 30, 2022, the Company had no other-than-temporary impairments of short-term investments.
4. Fair Value Measurements
The Company accounts for certain of its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:
Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities.
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Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying amounts reflected on the condensed consolidated balance sheets for cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short maturities of those instruments.
The following tables present the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis (in thousands):
As of April 30, 2022
Level 1Level 2Total
Cash Equivalents
Money market funds$42,651 $ $42,651 
Total cash equivalents42,651  42,651 
Short-Term Investments
U.S. government treasury securities 86,106 86,106 
Commercial paper 35,783 35,783 
Corporate debt securities 31,520 31,520 
Total short-term investments 153,409 153,409 
Total$42,651 $153,409 $196,060 
As of January 31, 2022
Level 1Level 2Total
Cash Equivalents
Money market funds$86,505 $ $86,505 
Total cash equivalents86,505  86,505 
Short-Term Investments
U.S. government treasury securities 39,211 39,211 
Commercial paper 40,965 40,965 
Corporate debt securities 30,090 30,090 
Total short-term investments 110,266 110,266 
Total$86,505 $110,266 $196,771 
The Company classifies its money market funds within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its commercial paper, U.S. government securities, and. corporate debt securities within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded.
5. Balance Sheet Components
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of April 30,
As of January 31,
20222022
Prepaid expenses$3,817 $4,518 
Prepaid software2,779 2,297 
Other current assets1,418 1,744 
Total prepaid expenses and other current assets$8,014 $8,559 
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Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
As of April 30,As of January 31,
20222022
Computer equipment$3,442 $3,711 
Furniture and fixtures427 412 
Capitalized internal-use software5,772 5,772 
Leasehold improvements1,582 1,582 
Construction in progress—capitalized internal-use software772  
Total gross property and equipment11,995 11,477 
Accumulated depreciation and amortization(7,654)(7,189)
Total property and equipment, net$4,341 $4,288 
Depreciation and amortization expense was $0.7 million in each of the three months ended April 30, 2022 and 2021. Included in these amounts were the amortization of capitalized internal-use software development costs of $0.5 million in each of the three months ended April 30, 2022 and 2021.
Accrued Compensation and Benefits
Accrued compensation and benefits consisted of the following (in thousands):
As of April 30,
As of January 31,
20222022
Accrued bonus$2,400 $5,557 
Accrued commissions2,546 4,226 
Accrued payroll and benefits2,515 2,863 
Employee contributions under the ESPP564 3,497 
Total accrued compensation and benefits$8,025 $16,143 
Other Accrued Liabilities
Other accrued liabilities consisted of the following (in thousands):
As of April 30,
As of January 31,
20222022
Accrued professional fees$939 $717 
Sales and value added tax payable408 671 
Income taxes payable372 414 
Other1,227 1,429 
Total other accrued liabilities$2,946 $3,231 
6. Deferred Revenue and Remaining Performance Obligations
The following table presents the deferred revenue balances (in thousands):
As of April 30,
As of January 31,
20222022
Deferred revenue, current$68,466 $69,010 
Deferred revenue, noncurrent2,289 2,713 
Total deferred revenue$70,755 $71,723 
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Changes in the deferred revenue balances during the three months ended April 30, 2022 and 2021 (unaudited) were as follows (in thousands):
Three Months Ended April 30,
20222021
Beginning balance$71,723 $61,710 
Performance obligations satisfied during the period that were included in the deferred revenue balance at the beginning of the year(24,207)(22,094)
Increases due to invoicing prior to satisfaction of performance obligations23,239 17,032 
Ending balance$70,755 $56,648 
Remaining performance obligations (“RPOs”) represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
As of April 30, 2022, the Company’s RPOs were $169.0 million. The Company expects to recognize revenue of $100.7 million of these remaining performance obligations over the next twelve months with the remaining balances recognized thereafter.
7. Debt
Interest expense consisting primarily of unused Credit Facility (as defined below) fees was immaterial for the three months ended April 30, 2022. Interest expense on the Company’s borrowings was $0.2 million for the three months ended April 30, 2021. The effective interest rate was 3.8% for the three months ended April 30, 2021.
Term Loan
In August 2018, the Company entered into an agreement for a term loan with a certain lender, which was amended in April 2019 and in June 2020 (the "Amended Loan"). The Amended Loan provided maximum borrowings of up to $25.0 million, maturing in June 2024. In January 2021, the Company repaid all outstanding indebtedness owed pursuant to the Amended Loan and terminated the agreement. Pursuant to the termination of the Amended Loan, the related security interests have been removed and the covenants shall be of no further force and effect.
In connection with the April 2019 amendment, the Company issued warrants to purchase 105,350 shares of the Company’s common stock at $7.48 per share, exercisable over 10 years. The fair value of the warrants was recorded to equity and as a debt discount that was amortized to interest over the term of the loan. The total fair value of the common stock warrants was $0.4 million. As of April 30, 2022, all warrants were outstanding and exercisable.
Credit Facility
In November 2017, the Company entered into a line of credit agreement with Silicon Valley Bank, or Credit Facility, providing the Company the ability to borrow up to $10.0 million from a revolving line of credit with an original maturity date in November 2018. Borrowings under the line of credit bear interest at a floating per annum rate equal to one half of one percentage point (0.50%) above the prime rate, which interest shall be payable monthly.The line of credit is secured with a pledge on substantially all the assets of the Company, except any intellectual property and is subject to a minimum revenue covenant.
In November 2018, the Company entered into an amendment with Silicon Valley Bank to increase the line of credit limit to $15.0 million and extend the maturity date to November 2019.
In April 2019, an amendment was entered into with the Silicon Valley Bank to decrease the line of credit to $10.0 million. In April 2020, an amendment was entered into with Silicon Valley Bank to extend the maturity of the line of credit to November 2020.
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In November 2020, the Company entered into an amendment with Silicon Valley Bank to extend the maturity of the line of credit to February 2021. In January 31, 2021, the Company entered into an amendment with Silicon Valley Bank to increase the line of credit limit to $40.0 million and extend the maturity date to January 2024. Upon the execution of this amendment, the Company borrowed $25.0 million from the line of credit. The outstanding principal balance is due at maturity with interest payable monthly. The line of credit bears a variable annual interest rate of the prime rate plus 0.5%. The Company is required to pay a fee equal to 0.25% per annum on the unused portion of the line of credit. The Company is also subject to a termination fee ranging from 0.5% to 1% of the line of credit if the Company terminates the agreement prior to the maturity date. The amendment also added certain financial covenants, including covenants related to certain financial metrics, that if not met, would limit the amount of additional borrowings under the line of credit.
The amended line of credit agreement requires the company to maintain an adjusted quick ratio (as defined by the agreement) of at least 1.15 to 1.0. The line of credit agreement also contains certain customary affirmative and negative covenants as well as customary events of default, subject to certain exceptions, including restrictions on the Company’s ability to, among other things, incur debt and liens, maintain collateral accounts, undergo fundamental changes including mergers or consolidations, dispose assets including selling, transferring or assigning assets, pay dividends or other distributions or make or permit payments on any subordinated debt. The Company was in compliance with the financial covenants under the line of credit as of April 30, 2022.
The Company repaid the outstanding principal of its revolving line of credit of $25.0 million during the year ended January 31, 2022. There were no borrowings outstanding against the line of credit as of April 30, 2022. As of April 30, 2022, $40.0 million was available for borrowing under the line of credit.
8. Leases
The Company leases facilities under non-cancelable operating leases, primarily for rent of office space. Our leases have various expiration dates through November 2027, some of which include options to extend the leases for up to three years. The Company does not have any finance leases.
Operating lease costs were $0.6 million for the three months ended April 30, 2022. Variable lease costs were $0.2 million during the three months ended April 30, 2022. Short-term lease costs were $0.1 million during the three months ended April 30, 2022.
The following table presents supplemental cash flow information related to leases:
Three months ended April 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$661
Right-of-use assets obtained in exchange for lease obligations:
Operating Leases$1,509
The following table presents supplemental balance sheet information related to operating leases (in thousands, except for lease term and discount rate):
As of April 30, 2022
Operating lease right-of-use assets$7,668 
Operating lease liabilities$2,717 
Operating lease liabilities, noncurrent5,627 
Total operating lease liabilities$8,344 
Weighted-Average Remaining Lease Term3.3 years
Weighted-Average Discount Rate3.8 %
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As of April 30, 2022, remaining maturities of operating lease liabilities were as follows (in thousands):
PeriodOperating Leases
Remaining for Fiscal 2023$2,225
Fiscal 20242,911
Fiscal 20252,461
Fiscal 2026680
Fiscal 2027 and thereafter597
Total lease payments8,874
Less: imputed interest(530)
Total$8,344
Future minimum lease payments under non-cancelable operating leases as of January 31, 2022 under ASC 840 were as follows (in thousands):
Year Ending January 31,Operating Leases
2023$2,845 
20242,638
20252,178
2026362
2027 and thereafter
Total$8,023
9. Commitments and Contingencies
Other Contractual Commitments
Other contractual commitments relate to third-party cloud infrastructure agreements and subscription arrangements.
As of April 30, 2022, there were no material changes to the Company’s contractual commitments since January 31, 2022.
Legal Matters
From time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable.
Indemnification Agreements
In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which the Company agrees to indemnify customers, vendors, lessors and other business partners with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. Additionally, the Company entered into indemnification agreements with the Company’s directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. As of May 31, 2022, no demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that we are aware of that could reasonably be expected to have a material effect on the Company’s financial condition, results of operations or cash flows.
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10. Stockholders’ Equity (Deficit) and Employee Incentive Plans
Redeemable Convertible Preferred Stock
Upon the closing of the Company’s IPO, all 26,710,600 shares of redeemable convertible preferred stock were automatically converted into shares of common stock, which includes an additional 640,387 shares of redeemable convertible preferred stock. The additional shares of redeemable convertible preferred stock consisted of 162,032 shares for the Series E conversion feature and 478,355 shares for the Series G dividends. The carrying value of $259.8 million was reclassified into common stock and additional paid-in-capital. As of April 30, 2022, there were no shares of redeemable convertible preferred stock issued and outstanding.
In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 200,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share with rights and preferences, including voting rights, designated from time to time by the board of directors.
Common Stock
The Company’s Amended and Restated Certificate of Incorporation authorized the Company to issue 1,000,000,000 shares of common stock at a par value of $0.00001 as of April 30, 2022 and January 31, 2022. As of April 30, 2022 and January 31, 2022, approximately 44,537,296 and 43,847,484 shares of common stock were issued and outstanding, respectively.
Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of April 30, 2022 and January 31, 2022, no dividends had been declared.
As of April 30, 2022, the Company has reserved common stock for future issuance as follows:
Number of Shares
Stock options outstanding8,603,980 
Restricted stock units issued and outstanding3,956,641 
Remaining shares available for issuance under the 2021 Plan2,643,474 
ESPP1,030,975 
Common stock warrants105,350 
Total16,340,420 
Stock Plans
The Company has three equity incentive plans: the 2008 Equity Incentive Plan (the “2008 Plan”), 2018 Equity Incentive Plan (the “2018 Plan”) and 2021 Equity Incentive Plan (the “2021 Plan”), collectively (the “Stock Plans”). In connection with the Company’s IPO in July 2021, the 2008 Plan and the 2018 Plan were terminated and replaced by the 2021 Plan and all shares that remained available for issuance under the 2018 Plan at that time were reserved for issuance under the 2021 Plan. The number of shares of common stock available for issuance under the 2021 Plan will be increased by any shares of common stock subject to awards outstanding under the 2008 Plan and the 2018 Plan that expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for satisfying tax withholding obligations or are forfeited to or repurchased by the Company due to failure to vest.
The Company has issued stock options to employees, directors, consultants and advisors pursuant to the 2018 Plan and restricted stock units (“RSUs”) under the 2021 Plan.
Equity awards permitted under the 2021 Plan may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares. Stock option grants may be either Incentive Stock Options (“ISO”) or Non-Qualified Stock Options (“NSO”). ISO may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, consultants, and nonemployee directors. Employee stock options are granted with an exercise price no less than the fair value of the underlying common stock on the grant date. Options granted under the 2021 Plan expire ten years from the date of grant and generally vest over four years at a rate of 25% upon the first anniversary of the issuance date and 1/48 per month thereafter.
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As of April 30, 2022, there were 2.6 million shares available for grant under the 2021 Plan. The 2021 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2022, by an amount equal to the least of (i) 4,120,000 shares, (ii) five-percent (5%) of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the administrator of the 2021 Plan no later than the last day of the immediately preceding Fiscal Year.
Employee Stock Purchase Plan
In July 2021, the Company established an Employee Stock Purchase Plan (“ESPP”) in which eligible employees may contribute up to 15% of their base compensation to purchase shares of common stock at a price equal to 85% of the lower of (1) the fair market value of a share of the Company’s common stock at the beginning of the offering period and (2) the fair market value of a share of the Company’s common stock on the purchase date. A participant will be permitted to purchase a maximum of shares during each offering period and no participant may purchase more than 1,000 shares during any offering period.
Except for the initial offering period, the ESPP provides for 24-month offering periods beginning March 21 and September 21 of each year, and each offering period will consist of four six-month purchase periods. The initial offering period began on July 22, 2021 and will end on September 20, 2023. The initial offering period consists of four purchase periods with the first purchase period ending on March 20, 2022, and the final purchase period ending on September 20, 2023.
The Company recognized stock-based compensation expense related to the ESPP of $0.8 million during the three months ended April 30, 2022. As of April 30, 2022, accrued ESPP employee payroll contributions of $0.6 million are included within accrued compensation and benefits in the consolidated balance sheet. ESPP payroll contributions used to purchase shares are reclassified to stockholders’ equity on the purchase date. As of April 30, 2022, $2.1 million of unrecognized stock-based compensation expense related to the ESPP is expected to be recognized over a weighted-average vesting period of 0.8 years.
During the three months ended April 30, 2022, 237,499 shares of common stock were issued under the ESPP.
Stock Options
The following table summarizes stock option activity under the Stock Plans for the three months ended April 30, 2022 (aggregate intrinsic value in thousands):
Options OutstandingWeighted-
Average
Contractual
Term
Aggregate
Intrinsic
Value
Number of
Options
Weighted-
Average
Exercise
Price
Balances as of January 31, 2022
9,150,821 $9.76 6.53$126,368 
Options exercised(435,639)$5.79 
Options granted $ 
Options cancelled(111,202)$14.54 
Balances as of April 30, 2022
8,603,980 $9.90 6.46$70,965 
Options vested and expected to vest as of April 30, 2022
8,603,980 $9.90 6.46$70,965 
Options vested and exercisable as of April 30, 2022
6,063,428 $7.50 5.65$60,069 
No stock options were granted during the three months ended April 30, 2022. Stock options granted during the three months ended April 30, 2021 had a weighted-average grant-date fair value of $8.83 per share. The aggregate intrinsic value of options exercised during the three months ended April 30, 2022 and 2021 was $6.7 million and $3.8 million, respectively.
Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock.
The Company recognized stock-based compensation expense related to stock options of $1.7 million and $1.8 million during the three months ended April 30, 2022 and 2021, respectively. As of April 30, 2022 and January 31, 2022, there was $15.4 million and $17.7 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.2 years and 2.5 years, for each period.
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During the year ended January 31, 2018, in connection with services provided for recruitment, the Company granted 40,646 stock options outside of the Stock Plans to a third party. During the three months ended April 30, 2022, the recipient exercised 16,674 stock options and as of April 30, 2022, the recipient had exercised all 40,646 stock options. The related stock-based compensation expense was not material for the three months ended April 30, 2022 and 2021.
Service-Based RSUs
During the year ended January 31, 2022, the Company began granting RSUs to its employees. RSUs granted had service-based vesting conditions. The service based vesting condition for these awards is generally satisfied by rendering continuous service for four years, during which time the grants will vest with a cliff vesting period of one year and continued vesting quarterly thereafter.
The following table is a summary of RSU activity for the three months ended April 30, 2022:
RSUs Outstanding
Number of RSUs Weighted Average Grant Date Fair Value Per Share
Balances as of January 31, 2022
283,558 $43.76 
RSUs granted2,512,511 19.79 
RSUs vested  
RSUs forfeited(53,428)26.65 
Balances as of April 30, 2022
2,742,641 $22.13 
The aggregate fair value of the RSU awards granted was $49.7 million during the three months ended April 30, 2022, which represents the fair value of the common stock on the date the service-based vesting awards were granted.
We recognized $2.4 million in stock-based compensation expense related to service vesting-based RSUs during the three months ended April 30, 2022. As of April 30, 2022, there was $57.2 million of unrecognized compensation expense related to service-based RSUs expected to be recognized over a weighted-average vesting period of 3.8 years.
Market-Based RSUs
During the quarter ended January 31, 2022, the Board of Directors granted 1,214,000 restricted stock unit awards with market-based vesting conditions (“Market-based RSUs”) to certain executive officers and members of senior management pursuant to the 2021 Plan. The Market-based RSUs are comprised of four tranches that vest depending on a consecutive 60-trading day stock price target of the Company’s common stock. The grant fair value of each tranche was calculated using a Monte Carlo simulation model with the following assumptions:
January 31, 2022
Expected term (in years)5.0
Volatility50.0 %
Risk-free interest rate1.7 %
Dividend yield 
The fair value of the Market-based RSUs was estimated at $7.9 million and segregated into four tranches with a weighted-average expense recognition period of 3.6 years.
Stock-based compensation expense related to Market-based RSUs was $0.6 million during the during the three months ended April 30, 2022. As of April 30, 2022, there was $7.3 million of unrecognized compensation expense related to Market-based RSUs expected to be recognized over an average vesting period of 3.3 years.
Determination of Fair Value
The Company estimates the fair value of stock options and purchase rights issued to employees under the ESPP using the Black-Scholes option-pricing model, which is dependent upon several variables, such as the fair value of the Company’s common stock, the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield.
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Expected term—The expected term represents the weighted-average period the stock options are expected to remain outstanding and is calculated using the simplified method, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates the expected term as the midpoint between the vesting date and the contractual expiration date of the option.
Expected volatility—The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company does not have sufficient trading history for the Company’s common stock.
Risk-free interest rate—The risk-free rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s awards.
Dividend yield—The expected dividend assumption is based on the Company’s history and expectation of dividend payouts.
Fair value of underlying common stock— Prior to the Company’s IPO, the fair value was determined by the Board of Directors with input from management and contemporaneous independent third-party valuations. Subsequent to the IPO, the fair value of the Company’s common stock is based on the daily average selling price on the Nasdaq Global Select Market.
The fair value of employee stock options was estimated using the following weighted-average assumptions:
Three Months Ended April 30,
20222021
Stock Option Plans:
Expected term (in years)*6.1
Expected volatility*41.9 %
Risk-free interest rate*1.0 %
Dividend yield* 
*No stock options were granted during the three months ended April 30, 2022.
The fair value of employee stock purchase rights for the initial offering period under the 2021 ESPP was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Three Months Ended April 30, 2022
Employee Stock Purchase Plan:
Expected term (in years)
1.1 - 2.1
Expected volatility
46.7% - 52.1%
Risk-free interest rate
0.1% - 0.2%
Dividend yield
Stock-Based Compensation
Stock-based compensation expense was as follows (in thousands):
Three Months Ended April 30,
20222021
Cost of revenue—subscription$122 $27 
Cost of revenue—services94 22 
Research and development1,899 570 
Sales and marketing1,987 541 
General and administrative1,348 669 
Total stock-based compensation expense$5,450 $1,829 
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11. Income Taxes
Accounting for income taxes for interim periods generally requires the provision for income taxes to be determined by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss before income taxes, adjusted for discrete items, if any, for the reporting period. The Company updates its estimate of the annual effective tax rate each quarter and records a cumulative adjustment in such period.
The Company recorded income tax expense of $0.3 million for each of the three months ended April 30, 2022 and 2021. Income tax expense consists primarily of income taxes in foreign jurisdictions in which the Company conducts business. Due to the Company’s history of losses in the United States, a full valuation allowance on substantially all of the Company’s deferred tax assets, including net operating loss carryforwards, research and development tax credits, capitalized research and development, and other book versus tax differences was maintained.
12. Geographic Information
The following table depicts the disaggregation of revenue by geographic area based on the billing address of the customer (in thousands):
Three Months Ended April 30,
20222021
United States$21,336 $18,047 
International13,517 9,908 
Total$34,853 $27,955 
No individual foreign country contributed 10% or more of total revenue for the three months ended April 30, 2022 and 2021.
As of April 30, 2022 and January 31, 2022, substantially all of the Company’s long-lived assets, including operating lease ROU assets, were located in the United States.
13. Net Loss per Share
Basic net loss per share attributable to the Company’s common stockholders is computed by dividing the net loss attributable to the Company’s common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic net loss per share for all years presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss position in each period presented.
The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share data):
Three Months Ended April 30,
20222021
Numerator
Net loss$(19,834)$(14,599)
Cumulative dividends on Series G redeemable convertible preferred stock (1,479)
Net loss attributable to common stockholders$(19,834)$(16,078)
Denominator
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted44,265