Gloo Holdings, Inc. Fair Value Disclosure

In connection with the Corporate Reorganization and the conversion of the Senior Secured Convertible Notes immediately thereafter, the Company modified or settled certain previously outstanding financial instruments. Instruments that no longer met liability-classification criteria were reclassified to stockholders’ equity, while instruments that were settled or extinguished were derecognized. The instrument-specific effects on classification,

settlement, and, where applicable, fair value measurement are described below.

Warrants

As further discussed in Note 15, Debt, the Company issued the Warrants to multiple investors (the "Purchasers") of its Senior Secured Promissory Notes to purchase Series A preferred units at $18.00 per unit.

Prior to the Corporate Reorganization, the Warrants were classified as non-current liabilities in the consolidated balance sheets and were remeasured at fair value at each reporting date, with changes in fair value recognized in other income (expense), net in the consolidated statement of operations. The fair value of the warrant liability was estimated using an option-pricing model that considered both IPO and stay-private scenarios. The valuation incorporated assumptions related to the likelihood, nature, and timing of potential liquidity events; actions taken with respect to the warrants at expiration; and discounts for lack of marketability of the underlying securities.

As discussed in Note 15. Debt, on June 23, 2025, the Company executed the amended and restated note purchase agreement (the "Amended NPA"), resulting in the extinguishment of a portion of Warrants with an estimated fair value of $3.9 million. Subsequent to the Amended NPA, 199,999 Warrants remain outstanding.

In connection with the Corporate Reorganization, the Warrants’ agreements were amended so that the underlying security for which the 199,999 Warrants may be exercised is now Class B common stock rather than Series A preferred units. The Warrants continue to be exercisable for $18.00 per share. As a result of this modification, the Warrants met the criteria for equity classification and were reclassified from liabilities to stockholders’ equity effective on the modification date. On this modification date, the Company reclassified the Warrants’ $0.7 million liability carrying amount (measured at fair value after the final fair value remeasurement) to stockholders’ equity. Following this reclassification, the Warrants are no longer subject to fair value remeasurement as of each reporting period.

The Company recorded a loss of $0.1 million and gain of $0.1 million associated with the change in fair value of the Warrants in other income (expense), net, in the consolidated statement of operations for the years ended January 31, 2026 and 2025, respectively. No gain or loss was recognized during the year ended January 31, 2024, as the Warrants were not yet issued.

The Company estimated the fair value of the Warrants for the year ended January 31, 2025, assuming that the fair value of the underlying securities was $12.39 per unit; expected volatility was 55.0%; dividend rate was zero; and risk-free interest rate was 4.3%. To estimate the fair value of the Warrants upon reclassification, the Company assumed that the fair value of the underlying securities was $12.81 per unit; expected volatility was 50.0%; dividend rate was zero; and risk-free interest rate was 3.6%.

Derivative Liability

As a result of features embedded in both the Senior Secured Promissory Notes and the Senior Secured Convertible Notes, the Company recognized embedded derivative liabilities during the years ended January 31, 2026 and 2025.

The derivative liability associated with the Senior Secured Promissory Notes is classified as a non-current liability in the consolidated balance sheets as of the year ended January 31, 2026 and 2025. As further discussed below, the derivative liability associated with the Senior Secured Convertible Notes was both recognized and extinguished during the year ended January 31, 2026. As a result, no related balance is presented in the consolidated balance sheets as of January 31, 2026, or 2025. Refer to Note 15, Debt for further details.

Immediately prior to the IPO, the Senior Secured Convertible Notes and their embedded derivative liabilities were extinguished through the issuance of 22,363,700 shares of Class B common stock. The Company recognized a final loss related to the change in fair value of the embedded derivative upon extinguishment of $7.5 million, which is presented in Loss (gain) from change in fair value of financial instruments in the consolidated statement of operations for the year ended January 31, 2026. Refer to Note 18, Stockholders’ Equity and Members' Deficit and Note 15, Debt for further details.

The Company estimated the fair value of the derivative liabilities using the “With and Without” method, which involves modeling the expected cash flows to the noteholder under both default and non-default scenarios and measuring the fair value differential between a note with and without the embedded features. The valuation of the derivative liabilities incorporated significant unobservable inputs, including the timing and probability of potential liquidity events, discount rate, illiquidity discount, and expected volatility. Other inputs include prevailing interest and risk-free rates, which are not considered significant unobservable estimates.

MW Call Option

The MW Call Option was not affected by the Corporate Reorganization or the IPO and remained classified as a non-current liability. The Company recognized a loss of $4.1 million related to the change in fair value of the MW Call Option during the year ended January 31, 2026, which was recorded in other income (expense), net. There were no other components to the change in its fair value during the year ended January 31, 2026. Refer to Note 4, Business Combinations for additional information on the MW Call Option.

Exchangeable Shares

As further discussed in Note 4, Business Combinations, Exchangeable Shares were issued as consideration for the CNCL Acquisition at a fair value of $2.4 million.

Prior to the Corporate Reorganization, the Exchangeable Shares were reported as non-current liabilities and remeasured at each reporting date. The Company determined that an Exchangeable Share was economically equivalent to a Series A preferred unit and, as such, should be recorded at a fair value consistent with that of a Series A preferred unit.

The Company estimated their fair value using a combination of income and market approaches, with input from management. The income approach estimates value based on the expectation of future cash flows that the Company may generate. These future cash flows are discounted to their present values using a discount rate derived from an analysis of the cost of capital of comparable publicly traded companies as of each valuation date, adjusted to reflect the inherent risks in the Company’s cash flows.

The market approach estimates value based on a comparison to comparable public companies in a similar line of business and may also include “backsolves,” which infers value from recent financing rounds or tender offers. From these comparable companies, a representative market value multiple is determined and then applied to the Company’s financial forecasts to estimate its value. For each valuation, the enterprise value determined by the income and/or market approaches was then allocated to the Series A preferred units using the option pricing method ("OPM") or a hybrid of the probability-weighted expected return method and OPM, which estimates the probability weighted value across multiple scenarios but uses OPM to estimate the allocation of value within one or more of those scenarios.

In connection with the Corporate Reorganization, the Company entered into a letter agreement providing for the Exchangeable shares to be exchanged for 197,663 shares of Class B common stock rather than Series A preferred units. As a result of this modification, the Company determined that the Exchangeable Shares met the criteria for equity classification and were reclassified from liabilities to stockholders’ equity as of the modification date. Accordingly, the Company reclassified the carrying amount of $2.5 million related to the Exchangeable Shares, measured at fair value as of the modification date after giving effect to the final fair value remeasurement. For the period from issuance through the modification date (including such final remeasurement), the Company recorded a cumulative loss of $0.1 million in other income (expense), net, as shown in the consolidated statement of operations for the year ended January 31, 2026. Following this reclassification, the Exchangeable Shares are no longer subject to fair value remeasurement as of each reporting period. Refer to Note 18, Stockholders’ Equity and Members' Deficit for further details of the Exchangeable Shares.

Nonrecurring Fair Value Measurements

The fair values of assets acquired and liabilities assumed in an acquisition are measured on a non-recurring basis on the acquisition date. If the assets acquired and liabilities assumed are current and short-term in nature, the Company typically uses their approximate carrying values as it believes that it approximates their fair values. If the assets acquired are not short-term in nature, then the fair value is determined using the estimated future cash flows or other appropriate methods, and as such, are considered Level 3 inputs in the fair value hierarchy. Refer to Note 4, Business Combinations for a further discussion of the Company’s acquisitions.