Asana Inc.

03/13/2026 | Press release | Distributed by Public on 03/13/2026 14:24

Annual Report for Fiscal Year Ending January 31, 2026 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. As described in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" included above in this report. Our fiscal year ends on January 31.
Overview
Asana is the system of action for work, built for the Agentic Enterprise. We provide a comprehensive solution where humans and AI agents can collaborate effectively so that individuals work smarter, teams move faster, and organizations deliver results. Over 180,000 paying customers across 200 countries and territories use Asana to connect their work to company goals and orchestrate mission critical workflows like product launches, employee onboarding, resource planning, tracking company-wide strategic initiatives and more. By combining institutional memory with a governed execution surface, our platform enables organizations to orchestrate work across human and AI team members. This drives clarity, accountability, and impact across the organization from executives and department heads to the team leads, individuals, and agents delivering the work. In Asana, the "Who, What, When, and Why" of work is transparent, ensuring that every action, whether taken by a person or an AI agent, is grounded in real business context and aligned to strategic goals.
We offer complementary products within the Asana platform to meet the needs of diverse organizations:
•our core work management product, available in a tiered, seat-based model;
•AI Teammates, collaborative AI agents that work like real teammates to accelerate outcomes, which operates on a consumption basis; and
•Asana AI Studio, a no-code builder that lets teams build and embed AI into workflows, also on a consumption basis.
We employ a hybrid go-to-market approach, combining a product-led model, direct sales and channel partners.
We have experienced significant growth in recent periods. Our revenues were $790.8 million, $723.9 million, and $652.5 million for fiscal 2026, fiscal 2025, and fiscal 2024, respectively, representing growth of 9% and 11% for fiscal 2026 and fiscal 2025, respectively. As of January 31, 2026, we had 1,767 employees, representing a decrease of 3% since January 31, 2025. We had a net loss of $189.0 million, $255.5 million, and $257.0 million for fiscal 2026, fiscal 2025, and fiscal 2024, respectively.
Key Business Metrics
We believe that our growth and financial performance are dependent upon many factors, including the key factors described below.
Paying Customers
We are focused on continuing to grow the number of customers that use our platform, and specifically on growing the number of customers spending over $5,000 on an annualized basis ("Core customers"), and those spending over $100,000 on an annualized basis. Our operating results and growth opportunity depend, in part, on our ability to attract new customers and expand within those same organizations. We believe we have significant greenfield opportunities among addressable customers worldwide and we will continue to invest in our research and development and our sales and marketing organizations to address this opportunity.
We define a customer as a distinct account, which could include a team, company, educational or government institution, organization, or distinct business unit of a company, that is on a paid subscription plan, a free version, or a free trial of one of our paid subscription plans. A single organization may have multiple customers. We define a paying customer as a customer on a paid subscription plan.
We define customers spending over $5,000 and $100,000 as those organizations on a paid subscription plan that had $5,000 or more or $100,000 or more in annualized GAAP revenues in a given quarter, respectively, inclusive of discounts. As customers realize the productivity benefits we provide, our platform often becomes critical to managing their work, increasing employee productivity and achieving their objectives, which drives further adoption and expansion opportunities, and results in higher annualized contract values. We believe that our ability to increase the number of these customers is an important indicator of the components of our business, including: the continued acquisition of new customers, retaining and expanding our user base within existing customers, our continued investment in product development and functionality required by larger organizations, and the strategic expansion of our direct sales force.
As of January 31, 2026, we had 25,928 Core customers contributing approximately 73% of revenues for the fiscal year then ended. As of January 31, 2025, we had 24,062 Core customers who contributed approximately 72% of revenues for the fiscal year then ended.
As of January 31, 2026 and 2025, we had 817 and 726 customers spending over $100,000, on an annualized basis, respectively.
Dollar-based Net Retention Rate
We expect to derive a portion of our revenue growth from expansion within our existing customer base, where we have an opportunity to expand adoption of Asana across teams, departments, and organizations. We believe that our dollar-based net retention rate demonstrates our opportunity to further expand within our existing customer base, particularly those that generate higher levels of annual revenues.
Our reported dollar-based net retention rate equals the simple arithmetic average of our quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter. We calculate our dollar-based net retention rate by comparing our revenues from the same set of customers in a given quarter, relative to the comparable prior-year period. To calculate our dollar-based net retention rate for a given quarter, we start with the revenues in that quarter from customers that generated revenues in the same quarter of the prior year. We then divide that amount by the revenues attributable to that same group of customers in the prior-year quarter. Current period revenues include any upsells and are net of contraction or attrition over the trailing 12 months, but exclude revenues from new customers in the current period. We expect our dollar-based net retention rate to fluctuate due to a number of factors, including the expected growth of our revenue base, the level of penetration within our customer base, our ability to retain our customers, and the macroeconomic environment. For example, macroeconomic conditions have affected customers' renewal decisions, which has impacted our dollar-based net retention rate in recent periods.
As of January 31, 2026 and 2025, our dollar-based net retention rate was 96%.
As of January 31, 2026 and 2025, our dollar-based net retention rate for our Core customers was 97%. Our dollar-based net retention rate for customers spending over $100,000 on an annualized basis for the same periods was 96%.
Current Economic Conditions
Global macroeconomic events including inflation, fluctuating interest rates, bank failures, supply chain disruptions, fluctuations in currency exchange rates, tariffs and changes in trade agreements, and geopolitical unrest have led to economic uncertainty. These macroeconomic conditions have and are likely to continue to have adverse effects on the rate of global IT spending, including the buying patterns of our customers and prospective customers, and the length of our sales cycles.
Additionally, the introduction and acceptance of AI-assisted technologies has impacted traditional search engine user discovery of our products, particularly by small and midsize businesses. While we have aligned our product-led growth initiatives to this new environment and seen modest quarter-over-quarter traffic recovery from these customers as well as improvements in web conversion and retention, we expect these shifting dynamics to continue to impact us throughout fiscal year 2027.
Components of Results of Operations
Revenues
We primarily generate revenues from subscription fees earned from customers accessing our cloud-based platform. Subscription revenues are driven primarily by the number of paying customers, the number of paying users within the customer base, and the level of subscription plan. We recognize revenues ratably over the related contractual term beginning on the date that the platform is made available to a customer.
We also generate revenues from our consumption-based AI product and professional services, which are not material to the consolidated financial statements.
Cost of Revenues
Cost of revenues consists primarily of the cost of providing our platform to free users and paying customers and is comprised of third-party hosting fees, personnel-related expenses for our operations and support personnel including allocated overhead costs for facilities and shared IT-related expenses, third-party implementation services partner fees, infrastructure and application performance monitoring costs, credit card processing fees, and amortization of our capitalized internal-use software costs.
As we acquire new customers and existing customers increase their use of our cloud-based platform, we expect that our cost of revenues will continue to increase.
Gross Profit and Gross Margin
Gross profit, or revenues less cost of revenues, and gross margin, or gross profit as a percentage of revenues, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of and follow-on sales to existing customers, costs associated with operating our cloud-based platform, and the extent to which we expand our operations and customer support organizations. We expect our gross profit to increase in dollar amount and our gross margin to remain relatively consistent over the long term.
Operating Expenses
Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, employer payroll taxes, benefits, stock-based compensation expense, and, in the case of sales and marketing expenses, sales commissions. Operating expenses also include an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense.
Research and Development
Research and development expenses consist primarily of personnel-related expenses. These expenses also include product design costs, third-party services and consulting expenses, software subscriptions and computer equipment used in research and development activities, and allocated overhead costs. A substantial portion of our research and development efforts are focused on enhancing our software architecture and adding new features and functionality to our platform.We anticipate continuing to invest in innovation and technology development, including the integration of AI in our products, and as a result, we expect research and development expenses to continue to increase in dollar amount, but to decrease as a percentage of revenues over time.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel-related expenses and expenses for performance marketing, brand marketing, pipeline generation, and sponsorship activities. These expenses also include allocated overhead costs, travel-related expenses, and professional fees. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit of three years.
We continue to make strategic investments in our sales and marketing organization, and we expect sales and marketing expenses to remain our largest operating expense in dollar amount.We expect our sales and marketing expenses to continue to increase in dollar amount but to decrease as a percentage of revenues over time, although the percentage may fluctuate from period to period depending on the extent and timing of our initiatives.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses for our finance, human resources, information technology, and legal organizations, and for certain of our executives. These expenses also include non-personnel costs, such as outside legal, accounting, and other professional fees, software subscriptions and expensed computer equipment, certain tax, license, and insurance-related expenses, impairment charges, and allocated overhead costs.
We have recognized and will continue to recognize certain expenses as part of being a publicly traded company, consisting of professional fees and other expenses. As a public company, we incur additional costs associated with accounting, compliance, insurance, and investor relations. We expect our general and administrative expenses to continue to increase in dollar amount for the foreseeable future but to generally decrease as a percentage of our revenues, although the percentage may fluctuate from period to period depending on the timing and amount of our general and administrative expenses.
Interest Income and Other Income (Expense), Net and Interest Expense
Interest income and other income (expense), net consists of income earned on our marketable securities and investments, in addition to foreign currency transaction gains and losses.
Interest expense consists of interest expense from our credit facilities.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. To date, we have not recorded a material provision for income taxes for any of the periods presented other than for foreign income tax. In the United States, we have recorded deferred tax assets for which we provide a full valuation allowance, which primarily include net operating loss carryforwards and research and development tax credit carryforwards. We expect to maintain this full valuation allowance for the foreseeable future as it is more likely than not the deferred tax assets will not be realized based on our history of losses.
Results of Operations
The following tables set forth our results of operations for the periods presented and as a percentage of our revenues for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
Year Ended January 31,
2026 2025 2024
(in thousands)
Revenues $ 790,806 $ 723,876 $ 652,504
Cost of revenues (1)
86,759 77,193 64,524
Gross profit 704,047 646,683 587,980
Operating expenses:
Research and development (1)
301,496 341,467 324,688
Sales and marketing (1)
406,952 419,950 391,955
General and administrative (1)
192,930 152,001 141,334
Total operating expenses 901,378 913,418 857,977
Loss from operations (197,331) (266,735) (269,997)
Interest income and other income (expense), net 16,312 19,647 20,624
Interest expense (3,148) (3,683) (3,952)
Loss before provision for income taxes (184,167) (250,771) (253,325)
Provision for income taxes 4,857 4,765 3,705
Net loss $ (189,024) $ (255,536) $ (257,030)
__________________
(1)Amounts include stock-based compensation expense as follows:
Year Ended January 31,
2026 2025 2024
(in thousands)
Cost of revenues $ 1,803 $ 1,387 $ 1,549
Research and development 106,174 115,953 112,619
Sales and marketing 58,089 64,320 59,217
General and administrative 48,777 29,611 29,033
Total stock-based compensation expense $ 214,843 $ 211,271 $ 202,418
The following table sets forth the components of our statements of operations data, for each of the periods presented, as a percentage of revenues.
Year Ended January 31,
2026 2025 2024
(percent of revenues)
Revenues 100 % 100 % 100 %
Cost of revenues 11 11 10
Gross margin 89 89 90
Operating expenses:
Research and development 38 47 50
Sales and marketing 51 58 60
General and administrative 24 21 22
Total operating expenses 114 126 131
Loss from operations (25) (37) (41)
Interest income and other income (expense), net 2 3 3
Interest expense * * *
Loss before provision for income taxes (23) (35) (39)
Provision for income taxes * * *
Net loss (24) % (35) % (39) %
________________
* Less than 1%.
Note: Certain figures may not sum due to rounding.
Comparison of the Fiscal Years Ended January 31, 2026 and 2025
Revenues
Year Ended January 31,
2026 2025 $ Change % Change
(dollars in thousands)
Revenues $ 790,806 $ 723,876 $ 66,930 9 %
Revenues increased $66.9 million, or 9%, during fiscal 2026 compared to fiscal 2025. The increase in revenues was primarily due to the addition of new paying customers and a continued shift in our sales mix toward our Enterprise+ subscription plan.
Cost of Revenues
Year Ended January 31,
2026 2025 $ Change % Change
(dollars in thousands)
Cost of revenues $ 86,759 $ 77,193 $ 9,566 12 %
Cost of revenues increased $9.6 million, or 12%, during fiscal 2026 compared to fiscal 2025. The increase was primarily due to an increase of $3.4 million in amortization of capitalized software development costs, an increase of $3.4 million in personnel-related costs, and an increase of $2.4 million in professional services related costs.
Operating Expenses
Year Ended January 31,
2026 2025 $ Change % Change
(dollars in thousands)
Research and development $ 301,496 $ 341,467 $ (39,971) (12) %
Sales and marketing 406,952 419,950 (12,998) (3) %
General and administrative 192,930 152,001 40,929 27 %
Total operating expenses $ 901,378 $ 913,418 $ (12,040) (1) %
Research and Development
Research and development expenses decreased $40.0 million, or 12%, during fiscal 2026 compared to fiscal 2025. The decrease was primarily due to a decrease of $32.9 million in personnel-related expenses, an increase of $5.4 million in capitalized internal-use software due to investments in AI initiatives, a decrease of $2.6 million in allocated overhead costs, partially offset by an increase of $1.3 million in subscription and software related expenses.
Sales and Marketing
Sales and marketing expenses decreased $13.0 million, or 3%, during fiscal 2026 compared to fiscal 2025. The decrease was primarilydue to a decrease of $13.7 million in personnel-related costs, a decrease of $2.6 million in fees to marketing vendors, a decrease of $0.6 million in professional fees, partially offset by $4.2 million increase in commissions.
General and Administrative
General and administrative expenses increased$40.9 million, or 27%, during fiscal 2026compared to fiscal 2025. The increasewas primarily due to an increase of $24.0 million in impairment charges related to subleased office space, an increase of $16.5 million in personnel-related costs, an increase of $1.8 million in tax contingencies, partially offset by a decrease of $1.4 million in provision for credit losses and a decrease of $0.6 million in insurance.
Interest Income, Interest Expense, and Other Income (Expense), Net
Year Ended January 31,
2026 2025 $ Change % Change
(dollars in thousands)
Interest income and other income (expense), net $ 16,312 $ 19,647 $ (3,335) (17) %
Interest expense $ (3,148) $ (3,683) $ 535 15 %
Interest income and other income (expense), net decreased $3.3 million during fiscal 2026 compared to fiscal 2025 due primarily to a decrease in interest income from our investments in marketable securities. Interest expense decreased $0.5 million during fiscal 2026 compared to fiscal 2025 primarily due to a decrease in interest rates.
Comparison of the Fiscal Years Ended January 31, 2025 and 2024
For a comparison of our results of operations for the fiscal years ended January 31, 2025 and 2024, see Part II-Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operationsin our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on March 18, 2025.
Non-GAAP Financial Measures
The following tables present certain non-GAAP financial measures for each period presented below. In addition to our results determined in accordance with GAAP, we believe these non-GAAP financial measures are useful in
evaluating our operating performance. See below for a description of the non-GAAP financial measures and their limitations as an analytical tool.
Year Ended January 31,
2026 2025 2024
(in thousands)
Non-GAAP income (loss) from operations
$ 56,655 $ (40,787) $ (58,099)
Non-GAAP net income (loss)
$ 64,962 $ (29,588) $ (45,132)
Free cash flow $ 76,982 $ 2,643 $ (31,092)
Adjusted free cash flow
$ 84,475 $ 2,643 $ (30,385)
Non-GAAP Income (Loss) From Operations and Non-GAAP Net Income (Loss)
We define non-GAAP income (loss) from operations as loss from operations plus stock-based compensation expense and the related employer payroll tax associated with RSUs, impairment of long-lived assets, and restructuring costs. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and that do not correlate to the operation of the business. The restructuring costs are related to the reduction of our global workforce, which resulted in expenses related to severance, benefits, and other related items. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe the costs associated with restructuring are distinguishable from ongoing operating costs and are not reflective of underlying trends in our business. We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business, to facilitate comparison of our results to those of peer companies, and to facilitate comparison over multiple periods.
We define non-GAAP net income (loss) as net loss plus stock-based compensation expense and the related employer payroll tax associated with RSUs, impairment of long-lived assets, and restructuring costs.
We use non-GAAP income (loss) from operations and non-GAAP net income (loss) in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP income (loss) from operations and non-GAAP net income (loss) provide our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.
Free Cash Flow and Adjusted Free Cash Flow
We define free cash flow as net cash from operating activities less cash used for purchases of property and equipment and capitalized internal-use software costs. We define adjusted free cash flow as free cash flow plus restructuring costs paid. We believe that free cash flow and adjusted free cash flow are useful indicators of liquidity that provide information to management and investors, even if negative, about the amount of cash used in our operations other than that used for investments in property and equipment and capitalized internal-use software costs, adjusted for expenditures which are distinguishable from our ongoing operations.
Limitations and Reconciliations of Non-GAAP Financial Measures
Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, free cash flow and adjusted free cash flow do not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.
The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.
Non-GAAP Income (Loss) From Operations
Year Ended January 31,
2026 2025 2024
(in thousands)
Loss from operations $ (197,331) $ (266,735) $ (269,997)
Add:
Stock-based compensation and related employer payroll tax associated with RSUs 219,703 214,689 207,036
Impairment of long-lived assets
30,716 6,785 5,009
Adjustment for: restructuring costs (benefit) (1)
3,567 4,474 (147)
Non-GAAP income (loss) from operations
$ 56,655 $ (40,787) $ (58,099)
Non-GAAP Net Income (Loss)
Year Ended January 31,
2026 2025 2024
(in thousands)
Net loss $ (189,024) $ (255,536) $ (257,030)
Add:
Stock-based compensation and related employer payroll tax associated with RSUs 219,703 214,689 207,036
Impairment of long-lived assets 30,716 6,785 5,009
Adjustment for: restructuring costs (benefit) (1)
3,567 4,474 (147)
Non-GAAP net income (loss)
$ 64,962 $ (29,588) $ (45,132)
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(1)Restructuring costs for the fiscal year ended January 31, 2026 were composed of severance and related charges of $3.9 million and stock-based compensation benefit of $0.3 million. Restructuring costs for the fiscal year ended January 31, 2025 were composed of severance and related charges of $3.7 million and stock-based compensation expense of $0.8 million. See Note 16. Restructuringto our consolidated financial statements included in Item 8. Financial Statements and Supplementary Datain this Annual Report on Form 10-K for more information.
Free Cash Flow and Adjusted Free Cash Flow
Year Ended January 31,
2026 2025 2024
(in thousands)
Net cash provided by (used in) investing activities $ 37,166 $ (6,129) $ (289,135)
Net cash (used in) provided by financing activities $ (117,923) $ (58,093) $ 16,777
Net cash provided by (used in) operating activities $ 90,361 $ 14,925 $ (17,931)
Less:
Purchases of property and equipment (3,792) (5,569) (7,721)
Capitalized internal-use software costs (9,587) (6,713) (5,440)
Free cash flow
$ 76,982 $ 2,643 $ (31,092)
Add:
Restructuring costs paid 7,493 - 707
Adjusted free cash flow
$ 84,475 $ 2,643 $ (30,385)
Liquidity and Capital Resources
Since inception, we have financed operations primarily through the net proceeds we have received from the sales of our preferred stock and common stock, the issuance of senior mandatory convertible promissory notes in January and June 2020 to a trust affiliated with our co-founder, Chair, and former CEO, Dustin Moskovitz, cash generated from the sale of subscriptions to our platform, and financing activities including a private placement transaction with Mr. Moskovitz. We have generated losses from our operations as reflected in our accumulated deficit of $2,149.7 million as of January 31, 2026.
As of January 31, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $434.0 million.
In November 2022, we entered into a four-year credit agreement with SVB, which provided for a senior secured credit facilities in the aggregate principal amount of up to $150.0 million, consisting of a term loan facility in the aggregate principal amount of $50.0 million and a revolving loan facility in an aggregate principal amount of up to $100.0 million, including a $30.0 million letter of credit sub-facility (as amended on April 13, 2023, June 18, 2024, November 18, 2024, and May 29, 2025, the "November 2022 Senior Secured Credit Facility"). The November 2022 Senior Secured Credit Facility refinanced our prior credit agreement with SVB (the "April 2020 Senior Secured Term Loan") and terminates on November 7, 2026.
Borrowings under the November 2022 Senior Secured Credit Facility may be designated as ABR Loans or SOFR Loans, subject to certain terms and conditions under the agreement. Interest will accrue on any outstanding balance at a floating rate tied to the adjusted term SOFR, the prime rate, or the federal funds effective rate. Interest is payable monthly in arrears. Pursuant to the terms of the revolving credit facility, we are required to pay an annual commitment fee that accrues at a rate of 0.15% per annum on the unused portion of the borrowing commitments under the revolving credit facility. Refer to Note 6. Debtfor further details.
As of January 31, 2026, under the November 2022 Senior Secured Credit Facility there was $50.0 milliondrawn and $40.6 million was outstanding under the term loan, no amounts outstanding under the revolving credit facility and an aggregate $21.7 millionin letters of credit issued under the credit sub-facility. Our total available borrowing capacity under the revolving credit facility was$78.3 millionas of January 31, 2026.
On March 27, 2023, First Citizens BancShares, Inc. ("First Citizens") announced that it had entered into an agreement to purchase assets and liabilities of SVB, inclusive of our November 2022 Senior Secured Credit Facility. We continue to have the ability to make additional borrowings under the November 2022 Senior Secured Credit Facility which is now held by SVB as a division of First Citizens.
In June 2024, our board of directors authorized a stock repurchase program of up to $150.0 million of our outstanding Class A common stock (the "Repurchase Program"). Repurchases are made on the open market, including via pre-set trading plans, in accordance with applicable securities laws. The Repurchase Program is funded using our working capital and was initially authorized through June 2025. The Repurchase Program does not obligate us to acquire any particular amount of Class A common stock, and the Repurchase Program may be suspended or discontinued at any time at our discretion. During the year ended January 31, 2026 and January 31, 2025, we repurchased 9.7 million and 6.2 million shares, respectively, of our outstanding Class A common stock for an aggregate purchase price of $132.2 million and $78.4 million, respectively. All shares of Class A common stock repurchased were retired. The Repurchase Program was later amended on May 30, 2025 to remove the original expiration date and authorize the repurchase of an additional $100.0 million of Class A common stock. The Repurchase Program was later amended on February 27, 2026 to authorize the repurchase of an additional $160.0 million of Class A common stock. As of January 31, 2026, $39.4 million remained available for future stock repurchases under the Repurchase Program, and following the February 27, 2026 amendment, the Company now has a total of $199.4 million available for future repurchases under the Repurchase Program. The Repurchase Program as amended, has no specified expiration date and will continue until the funds committed to the Repurchase Program are exhausted or such authorization is revoked by our board of directors. See Note 10. Stockholders' Equityto our consolidated financial statements included in Part II, Item 8of this Annual Report on Form 10-K for more information regarding stock repurchases.
A substantial source of our cash provided by operating activities is our customer billings for subscription to our platform. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is included on our consolidated balance sheets as a liability and is recorded as revenues over the term of the subscription agreement. As of January 31, 2026 and January 31, 2025, we had $333.9 million and $302.8 million, respectively, of deferred revenue of which $333.6 million and $300.8 million, respectively, were recorded as a current liability. This deferred revenue will be recognized as revenues when all of the revenue recognition criteria are met.
We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contract with our paying customers and related collection cycles. We believe our current cash, cash equivalents, marketable securities, and amounts available under our November 2022 Senior Secured Credit Facility will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, billing frequency, our dollar-based-net-retention rate, the timing and extent of spending to support our research and development efforts, particularly for the introduction of new and enhanced products and features, including the integration of AI in our products, the performance of sales and marketing activities, costs associated with international expansion, additional capital expenditures to invest in existing and new office spaces, as well as increased general and administrative expenses to support being a publicly traded company. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We may seek to raise additional funds at any time through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. Additionally, cash from operations could also be affected by various risks and uncertainties in connection with the impact of an economic downturn or recession, significant market volatility in the global economy, timing and ability to collect payments from our customers and other risks detailed in Part I-Item 1A. Risk Factors.
Cash Flows
The following table shows a summary of our cash flows for the periods presented:
Year Ended January 31,
2026 2025 2024
(in thousands)
Net cash provided by (used in) operating activities $ 90,361 $ 14,925 $ (17,931)
Net cash provided by (used in) investing activities $ 37,166 $ (6,129) $ (289,135)
Net cash (used in) provided by financing activities $ (117,923) $ (58,093) $ 16,777
Operating Activities
Our largest source of operating cash is cash collection from sales of subscriptions to our paying customers. Our primary uses of cash from operating activities are for personnel-related expenses, marketing expenses, and third-party hosting-related and software expenses. Prior to fiscal 2025, we generated negative cash flows from operating activities and supplemented working capital requirements through net proceeds from the sale of equity and equity-linked securities.
Net cash provided by operating activities of $90.4 million for fiscal 2026 reflects our net loss of $189.0 million, adjusted by non-cash items such as stock-based compensation expense of $214.8 million, impairment of long-lived assets of $30.7 million, amortization of deferred contract acquisition costs of $27.8 million, depreciation and amortization of $22.0 million, non-cash lease expense of $18.3 million and provision for expected credit losses of $1.9 million, partially offset by net accretion of discount on marketable securities of $2.1 million and net cash outflows of $34.2 million from changes in our operating assets and liabilities. The net cash outflows from changes in operating assets and liabilities primarily consisted of a $28.8 million increase in prepaid expenses and other current assets related to an increase in deferred contract acquisition costs, a $23.5 million increase in accounts receivable, a $23.0 million decrease in operating lease liabilities, and a $0.6 million increase in other assets. These amounts were partially offset by a $31.1 million increase in deferred revenue resulting from increased billings for subscriptions, a $7.3 million increase in accounts payable, and a $3.4 million increase in accrued expenses and other liabilities.
Net cash provided by operating activities of $14.9 million for fiscal 2025 reflects our net loss of $255.5 million, adjusted by non-cash items such as stock-based compensation expense of $211.3 million, amortization of deferred contract acquisition cost of $25.9 million, non-cash lease expense of $18.0 million, depreciation and amortization of $17.5 million, impairment of long-lived assets of $6.8 million, and provision for expected credit losses of $3.2 million, partially offset by net accretion of discount on marketable securities of $5.5 million and net cash outflows of $6.8 million from changes in our operating assets and liabilities. The net cash outflows from changes in operating assets and liabilities primarily consisted of a $20.4 million increase in prepaid expenses and other current assets related to an increase in deferred contract acquisition costs, a $20.0 million decrease in operating lease liabilities, a $4.7 million increase in accounts receivable, and a $4.4 million increase in other assets. These amounts were partially offset by a $31.6 million increase in deferred revenue resulting from increased billings for subscriptions, a $6.6 million increase in accrued expenses and other liabilities primarily from increases in accrued taxes and accrued payroll liabilities, and a $4.4 million increase in accounts payable.
Investing Activities
Net cash provided by investing activities of $37.2 million for fiscal 2026 consisted of $206.3 million in maturities of marketable securities and $23.4 million in sales of marketable securities, offset by $179.2 million in purchases of marketable securities, $9.6 million in capitalized internal-use software costs, and $3.8 million in purchases of property and equipment.
Net cash used in investing activities of $6.1 million for fiscal 2025 consisted of $234.4 million in purchases of marketable securities, $6.7 million in capitalized internal-use software costs, and $5.6 million in purchases of property and equipment, partially offset $240.6 million in maturities of marketable securities.
Financing Activities
Net cash used in financing activities of $117.9 million for fiscal 2026 consisted of $132.2 million in repurchases of common stock and $3.8 million in repayment of term loan, partially offset by $13.0 million in proceeds from employee stock purchase planand $5.0 million in proceeds from exercise of stock options.
Net cash used in financing activities of $58.1 million for fiscal 2025 consisted of $78.4 million in repurchases of common stock and $2.5 million in repayment of term loan, partially offset by $13.7 million in proceeds from our employee stock purchase plan and $9.1 millionin proceeds from the exercise of stock options.
Contractual Obligations and Commitments
The contractual commitment amounts in the table below are associated with agreements that are enforceable and legally binding. Purchase orders issued in the ordinary course of business are not included in the table below, as our purchase orders represent authorizations to purchase rather than binding agreements.
The following table summarizes our contractual obligations as of January 31, 2026:
Payments Due by Period
Total Less than 1 Year 1 - 3 years 3 - 5 years More than 5 Years
(in thousands)
Operating lease commitments(1)
$ 288,366 $ 42,817 $ 79,063 $ 69,497 $ 96,989
Purchase commitments(2)
234,532 57,313 118,552 58,667 -
Total contractual obligations $ 522,898 $ 100,130 $ 197,615 $ 128,164 $ 96,989
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(1)Consists of future non-cancelable minimum rental payments under operating leases for our offices. For further information regarding operating lease commitments, refer to Note 8. Leases.
(2)Consists of a 60-month contract with Amazon Web Services for hosting-related services and other non-cancellable purchase commitments with various parties primarily for software-based services. Refer to Note 7. Commitments and Contingenciesfor further details on related commitments.
In February 2019, we entered into a new lease agreement for office space in San Francisco, which commenced in May 2020 and expires in October 2033. As part of the agreement, we were required to issue a $17.0 million letter of credit upon access to the office space, which occurred in the year ended January 31, 2021. Future minimum lease payments related to this lease as of January 31, 2026were $252.7 million. Our co-founder, Chair, and former CEO acts as a personal guarantor to the lease for the full rent payments over the entire term of the lease should we default on our obligations.
For further information on our commitments and contingencies, refer to Note 7. Commitments and Contingenciesin the consolidated financial statements contained within this Annual Report on Form 10-K.
In November 2022, we entered into the November 2022 Senior Secured Credit Facility with SVB, as discussed in Liquidity and Capital Resourcesabove.
Indemnification Agreements
In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. Additionally, in connection with the listing of our Class A common stock on the NYSE, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could have a material effect on our financial position, results of operations, or cash flows.
Critical Accounting Estimates
Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
While our significant accounting policies are more fully described in Note 2. Basis of Presentation and Summary of Significant Accounting Policiesto our Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K, we believe that the accounting estimates described below have the most significant impact.
Deferred Contract Acquisition Costs
Sales commissions earned by our sales force and bonuses earned by executives, as well as related payroll taxes, are considered to be incremental and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized as deferred contract acquisition costs within prepaid and other current assets and other assets on the consolidated balance sheets.
We amortize deferred contract acquisition costs over a period of benefit of three years. We estimated the period of benefit by considering factors such as historical customer attrition rates, the useful life of our technology, and the impact of competition in the software-as-a-service industry. We elected to apply the practical expedient to recognize commissions paid for incremental sales to existing customers as an expense if the amortization period of the asset would have been one year or less.
Capitalized Software Development Costs
Software development costs consist of certain payroll and stock-based compensation costs incurred to develop functionality for our cloud-based platform and internally built software platforms, as well as certain upgrades and enhancements that are expected to result in enhanced functionality.
Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. Costs incurred for the maintenance and minor upgrade and enhancement of Company's software platform without adding additional functionality are expensed as incurred. There is judgment involved in estimating the stage of development as well as estimating time allocated to a particular project.
Capitalized software development costs are recorded as part of property and equipment and amortized on a straight-line basis over the technology's estimated useful life, which is generally three years. We determined that a three year life is appropriate for our internal-use software based on our best estimate of the useful life of the internally developed software after considering factors such as continuous developments in the technology, obsolescence and anticipated life of the service offering before significant upgrades.
Stock-Based Compensation Expense
We record stock-based compensation expense for all stock-based awards made to employees, non-employees, and directors based on estimated fair values recognized over the requisite service period. We estimate the fair value of options granted to employees for purposes of calculating stock-based compensation expense on the grant date using the Black-Scholes pricing model. The Black-Scholes pricing model requires us to make assumptions and judgments about the inputs used in the calculation, including the expected term, the volatility of our common stock, risk-free interest rate, and expected dividend yield. The expected term represents the period that we expect our stock-based awards to be outstanding.
We measure stock-based compensation expense related to our restricted stock units, or RSUs, based on the fair value of the underlying shares on the date of grant. RSUs are subject to time-based vesting, which generally occurs over a period of one to four years.
We account for stock-based compensation expense related to our 2020 Employee Stock Purchase Plan ("ESPP") purchase rights based on the estimated grant date fair value, which is calculated using the Black-Scholes option pricing model and the aggregate number of shares of our common stock expected to be purchased under each offering. The assumptions used to determine the fair value of the ESPP purchase rights, including the expected term of the awards, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock, represent management's best estimates. These estimates involve inherent uncertainties and the application of management's judgment. We account for modifications to employee contributions as they occur.
For awards that vest only based upon continued service, we recognize stock-based compensation expense ratably over the requisite service period, which is generally the vesting period of the respective award. We account for forfeitures as they occur. We recognize stock-based compensation expense related to ESPP on a straight-line basis over the term of each ESPP offering period, which is generally two years.
We estimate the fair value of performance-based restricted stock units, or PSUs, that have a market condition on grant date using a Monte Carlo simulation model, which models multiple stock price paths in order to estimate grant date fair value of the awards. The Monte Carlo simulation model requires us to make assumptions and judgments about the inputs used in the calculation, including expected term, the volatility of our common stock, risk-free interest rate, and expected dividend yield. We recognize stock-based compensation expense for PSUs with a market condition using the accelerated attribution method over the requisite service period. If the market conditions are not satisfied during performance period, stock-based compensation expense for PSUs with a market condition are not reversed as the market condition is reflected in the fair value of the award on grant date.
We measure the fair value of PSUs that have a performance condition based on the price of our common stock on the date of grant. We recognize stock-based compensation expense for PSUs with a performance condition using the accelerated attribution method over the requisite service term, however expense is only recognized once the performance condition becomes probable of being achieved and only for the portion of the award that is probable of vesting. We reassess the probability of achievement at every reporting date and if our assessment changes, we record a cumulative catch-up adjustment in the current period and expense for these awards will be adjusted to reflect the
number of awards that ultimately vest. The assessment of the probability of achievement of performance conditions at each reporting period requires significant judgment and can impact both the timing and amount of stock-based compensation expense recognized for PSUs with a performance condition.
The assumptions are based on the following for each of the years presented:
•Expected volatility-Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. The Company utilized the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected term prior to sufficient historical volatility of our stock being available, and we also incorporate the historical volatility of our common stock to estimate expected volatility over the expected term for new awards.
•Expected term-Expected term represents the period that our stock-based awards are expected to be outstanding. The expected term assumptions are determined based on the vesting terms, exercise terms, and contractual lives of the awards. The expected term of the ESPP represents the period of time that purchase rights are expected to be outstanding.
•Risk-free rate-We use the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term.
•Dividend yield-We utilize a dividend yield of zero, as we do not currently issue dividends, nor do we expect to do so in the future.
•Fair value of common stock-Prior to our direct listing, we estimated the fair value of common stock. The fair value of common stock for purposes of ESPP purchases is based on the stock price on the first date of the respective offering period.
Lease Obligations
We determine if an arrangement is a lease at inception by determining if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances. Right-of-use ("ROU") assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As our leases do not provide an implicit rate, we use the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is a hypothetical rate based on our understanding of what its credit rating would be. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. The lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. Our lease agreements generally do not contain any residual value guarantees, restrictions, or covenants.
We have lease agreements with lease and non-lease components. We have elected to combine lease and non-lease components as a single lease component for all classes of underlying assets. We have also elected to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight-line basis over the lease term.
Operating leases are included in operating lease ROU assets, operating lease liabilities, current, and operating lease liabilities, noncurrent on the consolidated balance sheets.
The Company currently subleases certain of its unoccupied facilities to third parties. Any impairment to the associated right-of-use assets, leasehold improvements, or other assets as a result of a sublease is recognized in the period the sublease is executed and recorded in the consolidated statements of operations.
Recent Accounting Pronouncements
See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information regarding recent accounting pronouncements.
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