Commitments and Contingencies
As of January 31, 2026, the Company had in aggregate $196.3 million in contractual purchase commitments associated with agreements that are enforceable and legally binding, of which $113.4 million are due within the next 12 months.
Such amounts do not include obligations under contracts that the Company can cancel without significant penalty or purchase orders as the purchase orders represent authorizations to purchase rather than binding agreements.
Included in the aggregate contractual purchase commitments as of January 31, 2026 is the remaining commitment with a cloud storage provider that has a term of July 2023 through June 2028. Under the terms of the agreement, the Company committed to spend $54.0 million, $59.0 million, $62.0 million, $65.0 million, and $67.5 million in contract years one, two, three, four, and five, respectively, for a total of $307.5 million. If the Company does not meet the minimum purchase obligation during any of those years, it will be required to pay the difference. The Company met the minimum spend requirements for years one, two and three, As of January 31, 2026, the Company has made payments of $177.0 million under the agreement. On February 1, 2026, a new amendment to the agreement was entered with the cloud storage provider, which terminated the previous arrangement. The new arrangement has a term of February 1, 2026 through January 31, 2031. Under the terms of the new arrangement the Company committed to spend $107.0 million, $127.0 million, $147.0 million, $162.0 million and $178.0 million in contract years one, two, three, four and five, respectively, for a total of $721.0 million. If the Company does not meet the minimum purchase obligation during any of those years, it will be required to pay the difference.
Indemnification Arrangements
In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to customers, business partners and other parties with respect to certain matters, including, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities with respect to the Company’s products and services and business. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in a particular contract. The Company includes service level commitments to the Company’s cloud customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels.
To date, the Company has not incurred any material costs as a result of these commitments, and the Company expects the time between any potential claims and issuance of the credits to be short. As a result, the Company has not accrued any liabilities related to these commitments in the Company’s consolidated financial statements.
Litigation Claims and Assessments
The Company is subject to claims and suits that may arise from time to time in the ordinary course of business. In addition, some legal actions, claims and governmental inquiries may be instituted or asserted in the future against the Company and its subsidiaries. Although the outcome of these legal proceedings cannot be predicted with certainty and no assurances can be provided, based upon current information, the Company does not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on the Company’s consolidated financial statements.