UIPATH, INC. The Discussion and Analysis of Financial Condition Management and Results of Operations (form 10-K)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our   audited     consolidated
financial statements and related notes   for the fiscal year ended January 31,
2022 included elsewhere in this Annual Report on Form 10-K. This discussion,
particularly information with respect to our future results of operations or
financial condition, business strategy and plans and objectives of management
for future operations, includes forward-looking statements that involve risks
and uncertainties as described under the heading "  Special Note Regarding
Forward-Looking Statements  " in this Annual Report on Form 10-K. You should
review the disclosure under the heading "  Risk Factors  " in Part I, Item 1A of
this Annual Report on Form 10-K for a discussion of important factors that could
cause our actual results to differ materially from those anticipated in these
forward-looking statements. Our fiscal quarters end on April 30, July 31, and
October 31, and our fiscal year ends January 31. References to fiscal years
2022, 2021, and 2020 in this Annual Report on Form 10-K refer to our fiscal
years ended January 31, 2022, 2021, and 2020, respectively. A discussion
regarding our financial condition and our results of operations for fiscal year
2022 compared to fiscal year 2021 is presented below. A discussion regarding our
results of operations for fiscal year 2021 compared to fiscal year 2020 is
presented in the Final Prospectus under the section titled "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Overview


We are at the forefront of technology innovation and thought leadership in
automation, creating an end-to-end platform that provides automation with user
emulation at its core. Our platform leverages computer vision and artificial
intelligence ("AI") to empower software robots to emulate human behavior and
execute specific business processes, eliminating the need for employees to
execute certain manual and mundane tasks. Our platform allows employees to focus
on more value-added work and enables organizations to seamlessly automate
business processes ranging from those in legacy information technology ("IT")
systems and on-premises applications to new

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cloud-native infrastructure and applications without requiring significant
changes to the organization's underlying technology infrastructure. Our platform
is purpose-built to be used by employees throughout a company and to address a
wide variety of use cases, from simple tasks to long-running, complex business
processes.

Our platform is designed to transform the way humans work. We provide our
customers with a robust set of capabilities to discover automation opportunities
and to build, manage, run, engage, measure, and govern automations across
departments within an organization. Our platform leverages the power
of AI-based computer vision to enable our robots to perform a vast array of
actions as a human would when executing business processes. These actions
include, but are not limited to, logging into applications, extracting
information from documents, moving folders, filling in forms, and updating
information fields and databases. Our robots' ability to replicate humans' steps
in executing business processes drives continuous improvements in operational
efficiencies and enables companies to deliver on key digital initiatives with
greater speed, agility, and accuracy.

Our platform is designed to interact with and automate processes across a
company's existing enterprise stack. As a result, our customers can leverage the
power of our platform without the need to replace or change existing business
applications and with lower overall IT infrastructure cost. Our platform enables
employees to quickly build automations for both existing and new processes.
Employees can seamlessly maintain and scale automations across multiple
deployment options, constantly improve and evolve automations, and continuously
track and measure the performance of automations, all without substantial
technical experience.

At the core of our automation platform is a set of capabilities that emulates
human behavior, which provides our customers with the ability to automate both
simple and complex use cases. Automations on our platform can be built,
consumed, managed, and governed by any employee who interacts with computers,
resulting in the potential for broad applicability of our platform across
departments within an organization. Society is at a turning point in how
organizations execute work, and we believe the ability to leverage software to
enrich the employee experience will unlock tremendous value and efficiency
opportunities. While we are still in the early days of a multi-year journey to
the fully automated enterprise, momentum is growing as organizations across the
world are only now beginning to understand the power of automation.

Founded in a Bucharest, Romania apartment in 2005, UiPath was incorporated in
2015 as a company principally focused on building automation scripts and
developing computer vision technology, which remains the foundation of our
platform today. Since that time, we have developed and enhanced our robotic
process automation ("RPA") capabilities, launched new products, and expanded our
operations across the globe.

We now offer a comprehensive range of automation solutions via a suite of
interrelated software offerings. We generate revenue from the sale of licenses
for our proprietary software, maintenance and support for our software, right to
access certain products that are hosted by us (i.e., software as a service, or
"SaaS"), and other services, including professional services. Our license fees
are based primarily on the number of users who access our software and the
number of automations running on our platform. Our license agreements generally
have annual terms, and some of our license agreements have multi-year terms. We
generally do not sell standalone licenses with a term of less than one year.
However, during the term of an annual contract or the last year of a multi-year
contract, our customers may enter into an additional license agreement with a
termination date that is coterminous with the anniversary date of such annual
contract. Additionally, we provide maintenance and support for our software as
well as non-recurring professional services such as training and implementation
services to facilitate the adoption of our platform. Our professional services
complement the capabilities of our customers and partners as they improve
customers' time-to-market and optimize business outcomes using our platform. Our
non-recurring professional services include use case development and deployment,
solutions architecting, implementation consulting, and training. We have an
efficient go-to-market model, which consists primarily of an enterprise field
sales force supplemented by an inside sales team focused on small and mid-sized
customers, as well as a global strategic sales team focused on the largest
global customers. We had over 10,100 and over 7,900 customers as of January 31,
2022 and 2021, respectively.

Many of our customers expand the scope and size of use cases of our platform
across their organizations as they quickly realize the power of our platform. We
believe that the success of our land-and-expand business model is centered on
our ability to deliver significant value in a very short time. We grow with our
customers as they identify and expand the number of business processes to
automate, which increases the number of robots deployed and the number of users
interacting with our robots.

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A crucial component of our go-to-market strategy is our partner and channel
ecosystem, which extends our local and global reach and helps to ensure that
customers are able to rapidly build, deploy, and scale automations on our
platform. Our business partners include more than 5,100 global and regional
system integrators, value-added resellers, and business consultants. We provide
tiering recognition through Diamond, Gold, Silver, and Registered levels for
partners that meet competency requirements and deliver and maintain a specified
number of satisfied customers. These partnerships enhance our market presence
and drive greater sales efficiencies. In addition, we have built strong
technology partnerships and alliances to enable a large number of connectors and
other technical capabilities necessary to meet the breadth of our customer
needs.

We have experienced rapid growth. We generated revenue of $892.3 million and
$607.6 million, representing a growth rate of 47%, and net losses of
$525.6 million and $92.4 million for the fiscal years ended January 31, 2022 and
2021, respectively. Our operating cash flows were $(55.0) million and
$29.2 million for the fiscal years ended January 31, 2022 and 2021,
respectively.

Effect of COVID-19


When the COVID-19 pandemic began to unfold, we took decisive action across our
internal and customer operations to ensure the resilience of our company and the
safety of our employees. We temporarily shut down all offices and offered our
employees technology stipends to encourage remote working, postponed most of our
physical conferences and other customer and promotional events, implemented
global travel restrictions, reduced headcount and expenses related to event
marketing, and engaged in other discretionary cost-saving measures. Although we
have recently selectively reopened certain of our offices and have begun
permitting some travel and in-person meetings and events in compliance with
applicable government orders and public health guidelines, the majority of our
employees continue to work remotely. We have a distributed workforce and our
employees are accustomed to remote work. Our operational rigor, digital
infrastructure, and global footprint have enabled us to support our customers
navigating new challenges presented by the pandemic and existing needs to
automate. Global demand for automation has continued to accelerate as automation
becomes ever more critical for business execution and performance in a remote
working environment, and we have continued to invest in the development and
marketing of our automation platform to meet that demand. For further
information, see the section titled "  Risk Factors  " included elsewhere in
this Annual Report on Form 10-K.

Basic Performance Metrics

We monitor the annualized renewal run-rate (“ARR”) to help us measure and evaluate the effectiveness of our operations.


ARR is the key performance metric we use in managing our business because it
illustrates our ability to acquire new subscription customers and to maintain
and expand our relationship with existing subscription customers. We define ARR
as annualized invoiced amounts per solution SKU from subscription licenses and
maintenance obligations assuming no increases or reductions in their
subscriptions. ARR does not include the costs we may incur to obtain such
subscription licenses or provide such maintenance, and does not reflect any
actual or anticipated reductions in invoiced value due to contract non-renewals
or service cancellations other than for specific bad debt or disputed amounts.
At January 31, 2022 and 2021, our ARR was $925.3 million and $580.5 million,
respectively, representing a growth rate of 59%. Approximately 25% of this
growth rate was due to new customers and 75% of this growth rate was due to
existing customers. Our dollar-based net retention rate, which represents the
net expansion of ARR from existing customers over the preceding 12 months, was
145% as of both January 31, 2022 and 2021. We calculate dollar-based net
retention rate as of a period end by starting with the ARR from the cohort of
all customers as of 12 months prior to such period-end ("Prior Period ARR"). We
then calculate the ARR from these same customers as of the current period-end
("Current Period ARR"). Current Period ARR includes any expansion and is net of
contraction or attrition over the last 12 months, but does not include ARR from
new customers in the current period. We then divide the total Current Period ARR
by the total Prior Period ARR to arrive at the point-in-time dollar-based net
retention rate.

Our ARR may fluctuate as a result of a number of factors, including customers'
satisfaction or dissatisfaction with our platform and professional services,
pricing, competitive offerings, economic conditions, or overall changes in our
customers' spending levels. ARR should be viewed independently of revenue and
deferred revenue as ARR is an operating metric and is not intended to be
combined with or to replace these items. For clarity, we use annualized invoiced
amounts per solution SKU rather than revenue calculated in accordance with
accounting

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principles generally accepted in the United States ("GAAP"), to calculate our
ARR. Our invoiced amounts are not matched to transfer of control of the
performance obligations associated with the underlying subscription licenses and
maintenance obligations as they are with respect to our GAAP revenue. This can
result in timing differences between our GAAP revenue and ARR calculations. Our
ARR calculation simply takes our invoiced amounts per solution SKU under a
subscription license or maintenance agreement and divides that amount by the
invoice term and multiplies by 365 days to derive the annualized value. In
contrast, for our revenue calculated in accordance with GAAP, subscription
licenses revenue derived from the sale of term-based licenses hosted on-premises
is recognized at the point in time when the customer is able to use and benefit
from our software, which is generally upon delivery to the customer or upon the
commencement of the renewal term, and maintenance, support, and SaaS revenue is
recognized ratably over the term of the arrangement. ARR is not a forecast of
future revenue, which can be impacted by contract start and end dates, duration,
and renewal rates, and does not include invoiced amounts reported as perpetual
licenses or professional services revenue in our consolidated statements of
operations. Investors should not place undue reliance on ARR as an indicator of
our future or expected results. Moreover, our presentation of ARR may differ
from similarly titled metrics presented by other companies and may not be
comparable to such other metrics. For further information, see the section
titled "  Risk Factors  -Risks Related to Our Business, Products, Operations,
and Industry" included in Part I, Item 1A of this Annual Report on Form 10-K.

A summary of the data associated with the ARR in January 31, 2022 and 2021 are as follows:

                                                           At January 31,
                                                        2022             2021
                                                       (dollars in thousands)

Annualized renewal run-rate (ARR)                  $   925,276       $ 

580,483

Incremental annualized renewal run-rate (iARR) $ 344,793 $ 229,042


Customers with ARR greater than $1 million:
Number of customers                                        158              

89

Percent of fiscal year revenue                              43  %           35  %
Customers with ARR greater than $100 thousand:
Number of customers                                      1,493           

1,002

Percent of fiscal year revenue                              79  %           

75 %


Dollar-based net retention rate                            145  %          

145 %

Key Factors Affecting Our Performance


Our results of operations and financial condition are impacted by the macro
factors affecting our industry, including the proliferation of cloud-based
applications, the cost of skilled human capital, and the global demand for
automation solutions. While our business is influenced by these macro factors,
our results of operations are more directly affected by certain Company specific
factors, including:

Growing Our Global Customer Base


We believe there is a substantial opportunity to continue to grow our customer
base. Additionally, we believe that as more organizations adopt our automation
platform and experience quantifiable competitive advantages, other organizations
will also adopt automation as a necessary tool to compete. While we sell to
organizations of all sizes and across a broad range of industries,
our go-to-market team's key focus is on the largest organizations, including
large enterprises and governments. We also use an inside sales team focused on
small and mid-sized businesses. We plan to continue to invest in
our go-to-market team to grow our customer base both domestically and
internationally. We intend to continue to grow our customer base by focusing on
the top 25 countries as measured by gross domestic product. Although these
investments may adversely affect our operating results in the near term, we
believe that they will contribute to our long-term growth. Our ability to
attract new customers will also depend on a number of other factors, including
our ability to drive awareness of the benefits and power of automation in the
industry and at our existing and prospective customers, the effectiveness and
pricing of our products, the offerings of our competitors, and competition among
resellers.

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We define our number of customers as the number of accounts with a unique
account identifier for which we have an active subscription in the period
indicated and include in our customer count entities to which we have sold our
products either directly or through a channel partner. Users of our free trials
or tier are not included in our customer count. A single organization with
multiple divisions, segments, or subsidiaries is counted as a single customer.
Our customer count is subject to adjustments for acquisitions, consolidations,
spin-offs, and other market activity, and specifically
excludes non-paying partners and resellers.

Expanding Our Current Customer Base


Our customer base represents a significant opportunity for further sales
expansion. We had over 10,100 and over 7,900 customers as of January 31, 2022
and 2021, respectively. We employ a land-and-expand business model centered
around offering products that are easy to adopt and have a short time to value.
We believe there is significant opportunity for us to become a strategic partner
to our customers in their automation journeys and drive further sales expansion
through the following vectors:

• deploy more robots in different departments;

• provide more employees with their own robot assistants;

• increase the use of platform products; at

• expand use cases for enterprise automation to encourage increased use of robots and capacity consumption of our various products.


Our customers often expand the deployment of our platform across large teams and
more broadly within the enterprise as they find new use cases for our platform
and their employees increasingly interact with and gain confidence working with
robots. The power of our land-and-expand model is evidenced by our dollar-based
net retention rate and our customers exceeding significant ARR thresholds,
described in the section titled "  -    Key Performance Metric  ."

We intend to continue to invest in enhancing awareness of our brand and
developing more products, features, and functionality, which we believe are
important factors to achieve widespread adoption of our platform. Our ability to
increase sales to existing customers will depend on a number of factors,
including our customers' satisfaction with our solution, competition, pricing,
and overall changes in our customers' IT spending levels.

Driving Preference and Share of System Integrators, Value-Added Resellers, and
Business Consultants Selling the Value Propositions and Capabilities of Digital
Transformation

We are focused on maintaining and growing our ecosystem of partners that build,
train, and certify skills in our technology as well as deploy our technology on
behalf of their customers. We have built a global partner ecosystem of more than
5,100 systems integrators, value-added resellers, business consultants,
technology partners and public cloud vendors. Our partner network includes,
among others, Accenture LLP, Capgemini SE, Cognizant Technology Solutions
Corporation, Deloitte, EY, Infosys Limited, International Business Machines
Corporation, PwC, Tata Consultancy Services Limited, and Wipro Limited. We
provide a tiering recognition through Diamond, Gold, Silver, and Registered
levels for partners that meet competency requirements and deliver and maintain a
tiered number of satisfied customers. In May 2020, we launched the UiPath
Services Network ("USN") program to recognize an elite network of partners
accredited with advanced delivery skills, and over 50 partners have earned USN
certification. We also offer a professional services capability that augments
our partners' efforts where necessary. Our ability to grow our partnership base
depends on the competitiveness of our platform and the profitability of our
relationship for our partners and potential partners.

Maintaining Innovation and Automation Leadership


Our success is dependent on our ability to sustain innovation and automation
leadership in order to maintain our competitive advantage. We believe that we
have built a differentiated automation platform and intend to continually
increase the value we provide to our customers by investing in extending the
capabilities of our platform. We have made and will continue to make significant
investments in research and development to bolster our existing technology and
enhance usability to improve our customers' productivity. In May 2021, we
released version 21.4 of the UiPath Platform. Innovations included the all-new
Automation Ops, designed to help customers manage

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and govern high scale deployments of the UiPath Studio family of products and
Attended Robots enterprise-wide. New AI-powered capabilities were also
introduced to speed the discovery and prioritization of processes to automate,
led by the general availability of Task Mining. In November 2021, we released
version 21.10 of the UiPath Platform. Innovations in this release include UiPath
Integration Service, which delivers API automation to help companies optimize
the technologies they already have. Additionally, the introduction of Robot
Auto-healing allows for the detection and remediation of robot issues without
human intervention, and a host of other new features make our platform simpler,
faster, and more gratifying for developers and end users.

We also collaborate with other leading technology companies to develop
integrations that simplify the interoperability of our platform with their
technology. Examples of integrations available to our customers include
integrations with offerings from Amazon Web Services Inc., Adobe Inc., Alteryx
Inc., Atlassian Corp Plc, Box, Inc., Crowdstrike Inc., DocuSign Inc., Microsoft
Corporation, Oracle Corporation, Qlik Technologies Inc., Salesforce.com, Inc.,
SAP SE, ServiceNow, Inc., Snowflake, Inc., and Workday, Inc.
These pre-built integrations can accelerate the adoption of our platform within
our customers' environment and speed the creation of automations that span
multiple technologies.

We also maintain partnerships with leading cloud vendors, such as Amazon Web
Services Inc., Google Inc., and Microsoft Corporation, to both simplify the
deployment of our platform and extend our platform to offer customers the
benefits of cloud-based AI capabilities. We are focused on maintaining and
growing our ecosystem of partners to continue to expand our market presence and
drive greater sales efficiencies.

In addition, we intend to continue to evaluate strategic acquisitions and
investments in businesses and technologies to drive product and market
expansion. For example, in March 2021, we acquired Cloud Elements Inc. ("Cloud
Elements"), a provider of a leading application programming interface
integration platform for SaaS application providers and the digital enterprise.
This acquisition brings technology and an experienced team, which we believe
will accelerate our technology roadmap in areas such as native integrations and
system event automation triggers. Our future success is dependent on our ability
to successfully develop, market, and sell existing and new products to both new
and existing customers and maintain and expand our relationships with leading
technology partners.

Continued Investors to Grow and Grow Our Business


We are focused on driving our growth potential over the long term. We believe
that our market opportunity is substantial. We intend to continue to invest in
scaling across all organizational functions in order to grow our operations both
domestically and internationally. We have a history of introducing successful
new products and capabilities on our platform and we believe these investments
will contribute to our long-term growth.

Components of the Results of Operations

Kita


We derive revenue from the sale of software licenses for use of our proprietary
software, maintenance and support for our licenses, right to access certain
software products we host (i.e., SaaS), and professional services. We offer a
comprehensive range of automation solutions via a suite of interrelated software
offerings. Customers can license our software and deploy our platform
on-premises, in a public or private cloud, or in a hybrid environment. In
addition, we offer a managed, multi-tenant, SaaS version of certain products
(i.e., our SaaS products), which enables our customers to begin automating
without the need to provision infrastructure, install applications or perform
additional configurations. We also offer maintenance and support, training, and
implementation services to our customers to facilitate their adoption of our
platform.

In fiscal 2021, we began offering both hybrid solutions and SaaS products. Hybrid solutions consist of three performance obligations, consisting of a term license, maintenance and support, and SaaS.


During the third quarter of fiscal 2022, maintenance and support revenue was
renamed subscription services revenue, and services and other revenue was
renamed professional services and other revenue. We believe that that the new
captions better reflect the composition of the revenue streams included in these
line items on the consolidated statements of operations.

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Licenses


We primarily sell term licenses, which provide customers the right to use
software for a specified period of time. From time to time, we also sell
perpetual licenses that provide customers the right to use software for an
indefinite period of time. For both types of licenses, revenue is recognized at
the point in time at which the customer is able to use and benefit from the
software, which is generally upon delivery to the customer or upon commencement
of the renewal term.

Subscription Services

Subscription services revenue consists of maintenance and support revenue
generated through technical support and the provision of unspecified updates and
upgrades on a when-and-if-available basis for both term and perpetual license
arrangements. Maintenance and support for perpetual licenses is renewable,
generally on an annual basis, at the option of the customer. Maintenance and
support represents a stand-ready obligation for which revenue is recognized
ratably over the term of the arrangement.

Revenue from subscription services also consists of revenue associated with our SaaS products, including those sold as part of our hybrid offerings. Our SaaS products are ready with obligations to provide access to our software, and the associated revenue is properly recognized during the contractual adjustment period beginning when or as control of the promised service begins to transfer to customer.

Professional Services and More


Professional services and other revenue consists of fees associated with
professional services for process automation, customer education, and training
services. Our professional services contracts are structured on a time and
materials or fixed price basis, and the related revenue is recognized as the
services are rendered.

Cost of Revenue

Licenses

Cost of licenses revenue consists of all direct costs to deliver our licenses to
customers, amortization of software development costs, direct costs related to
third-party software resales, and amortization of acquired developed technology.

Subscription Services


Cost of subscription services revenue primarily consists of personnel-related
expenses of our customer support and technical support teams, including salaries
and bonuses, stock-based compensation expense, and employee benefit costs. Cost
of subscription services revenue also includes third-party consulting services,
hosting costs related to our SaaS products, amortization of acquired developed
technology and capitalized software development costs related to SaaS products,
and allocated overhead. Overhead is allocated to cost of subscription services
revenue based on applicable headcount. We recognize these expenses as they are
incurred. We expect cost of subscription services revenue to continue to
increase in absolute dollars for the foreseeable future as our customer base
grows. In the future, we expect further expansion of our cloud-based
deployments. As cloud-based license software and services become a larger
percentage of our total revenue, we expect the cloud offering to impact the
timing of our recognition of revenue as well as impact our operating margins due
to an increase in hosting fees and cloud infrastructure costs.

Professional Services and More


Cost of professional services and other revenue primarily consists of
personnel-related expenses of our professional services team, including salaries
and bonuses, stock-based compensation expense, and employee benefit costs. Cost
of professional services and other revenue also includes expenses related to
third-party consulting services and allocated overhead. Overhead is allocated to
cost of professional services and other revenue based on applicable headcount.
We recognize these expenses as they are incurred. We expect cost of professional
services and other revenue to continue to increase in absolute dollars for the
foreseeable future as our customer base grows.

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Operating costs


Our operating expenses consist of sales and marketing, research and development,
and general and administrative expenses. Personnel-related expenses are the most
significant component of operating expenses and consist of salaries and bonuses,
stock-based compensation expense, and employee benefit costs. Operating expenses
also include allocated overhead. During fiscal years 2022 and 2021, certain
operating expenses, such as travel and entertainment, decreased, primarily as a
result of the COVID-19 pandemic. We expect a resumption of travel and
entertainment and related expenses during fiscal year 2023, although the timing
and magnitude of these expenses will depend on a number of factors including the
trend of the pandemic and potential changes to travel restrictions and
stay-at-home orders.

Sales and Marketing


Sales and marketing expenses consist primarily of personnel-related expenses
associated with our sales and marketing teams and related sales support teams,
including salaries and bonuses, stock-based compensation expense, and employee
benefit costs. Sales and marketing expenses also include sales and partner
commissions, marketing event costs, advertising costs, travel, trade shows,
other marketing materials, and allocated overhead. Similar to travel and
entertainment, trade show expenses also decreased in fiscal year 2021 and
through the first half of fiscal year 2022, as a result of the COVID-19
pandemic. We have since seen trade show expenses resume, largely in connection
with our FORWARD IV user conference in October 2021. We plan to increase our
investment in sales and marketing in absolute dollars over the foreseeable
future as we continue to hire additional personnel and invest in sales and
marketing programs. We expect that our sales and marketing expense will decrease
as a percentage of our total revenue over the long term, although our sales and
marketing expenses may fluctuate as a percentage of our total revenue from
period to period due to the timing and extent of these expenses.

Research and development


Research and development expenses consist primarily of personnel-related
expenses, including salaries and bonuses, stock-based compensation expense, and
employee benefits costs for our research and development employees. Research and
development costs are expensed as incurred, with the exception of certain
software development costs which are eligible for capitalization. We expect that
our research and development expenses will increase in absolute dollars for the
foreseeable future as we continue to invest in research and development efforts
to develop new technology and enhance the functionality and capabilities of our
existing products and platform infrastructure. Our research and development
expenses may fluctuate as a percentage of our total revenue from period to
period due to the timing and extent of these expenses.

General and Administrative


General and administrative expenses consist primarily of personnel-related
expenses, including salaries and bonuses, stock-based compensation expense, and
employee benefits costs associated with our finance, legal, human resources,
compliance, and other administrative teams, as well as accounting and legal
professional services fees, other corporate-related expenses, and allocated
overhead. Following the completion of the IPO in April 2021, we have incurred
and expect to continue to incur additional general and administrative expenses
as a result of operating as a public company. As a result, we expect the dollar
amount of our general and administrative expenses to increase for the
foreseeable future. We expect that our general and administrative expenses will
decrease as a percentage of our total revenue as our revenue grows over the
longer term, although our general and administrative expenses may fluctuate as a
percentage of our revenue from period to period due to the timing and extent of
these expenses.

Interest Income

Interest income consists of interest income earned on our cash deposits, cash balances and cash equivalents, and redeemable securities.

Other (Cost) Revenue, Net

Other (cost) income, net profit mainly consists of foreign exchange gains and losses and gains and losses associated with foreign currency forwarding contracts.

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Provision For (Benefits From) Income Taxes


Provision for (benefit from) income taxes consists of U.S. federal and state
income taxes and income taxes in certain foreign jurisdictions in which we
conduct business. We maintain a full valuation allowance on our U.S. federal and
state, Romanian, and U.K. deferred tax assets, as we have concluded that it is
more likely than not that these deferred tax assets will not be realized. Our
effective tax rate is affected by tax rates in foreign jurisdictions and the
relative amounts of income we earn in those jurisdictions, as well as by
non-deductible expenses as permanent differences and by changes in our valuation
allowances.

Results of Operations

The following tables set forth selected consolidated statement of operations
data and such data as a percentage of total revenue for each of the periods
indicated (in thousands):

                                                Year Ended January 31,
                                                 2022             2021
Revenue:
Licenses                                    $     481,427      $ 346,035
Subscription services                             369,867        232,542
Professional services and other                    40,958         29,066
Total revenue                                     892,252        607,643
Cost of revenue:
Licenses (1)                                       11,888          7,054
Subscription services (1)(2)(3)                    60,565         24,215
Professional services and other (2)(3)             96,415         34,588
Total cost of revenue                             168,868         65,857
Gross profit                                      723,384        541,786
Operating expenses:
Sales and marketing(1)(2)(3)                      697,682        380,154
Research and development(2)(3)                    276,657        109,920
General and administrative(1)(2)(3)               249,991        162,035
Total operating expenses                        1,224,330        652,109
Operating loss                                   (500,946)      (110,323)
Interest income                                     3,551          1,152
Other (expense) income, net                       (13,488)        14,513
Loss before income taxes                         (510,883)       (94,658)
Provision for (benefit from) income taxes          14,703         (2,265)
Net loss                                    $    (525,586)     $ (92,393)


                                                                           

The Year is over January 31(1) Includes amortization of acquired intangible assets as follows (in the thousands):

                                                             2022                    2021
Cost of licenses revenue                                           $      2,521                 $   2,493
Cost of subscription services revenue                                     1,100                         -
Sales and marketing                                                       1,397                       115
General and administrative                                                  101                         -
Total amortization of acquired intangible assets                   $      5,119                 $   2,608


(2) Includes stock-based compensation cost as follows (in the thousands):

The Year is over January 31,

                                                                           2022                   2021
Cost of subscription services revenue                              $      12,232              $     513
Cost of professional services and other revenue                           29,849                  1,860
Sales and marketing                                                      237,975                 16,356
Research and development                                                 135,713                 11,435
General and administrative                                                99,814                 56,003
Total stock-based compensation expense                             $     515,583              $  86,167


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(3) Includes employer payroll tax expense related to equity transactions as follows (in the thousands):

The Year is over January 31,

                                                                               2022                        2021
Cost of subscription services revenue                              $          1,142                    $        -
Cost of professional services and other revenue                               4,516                             -
Sales and marketing                                                          39,615                             -
Research and development                                                      5,810                             -
General and administrative                                                    3,001                             -

Total employer payroll tax expense associated with equity transactions $

  54,084                    $        -


The following table presents our aggregate statement of operating data expressed as a percentage of revenue for the period indicated:

                                                   Year Ended January 31,
                                                      2022               2021
Revenue:
Licenses                                                       54  %      57  %
Subscription services                                          41  %      38  %
Professional services and other                                 5  %       5  %
Total revenue                                                 100  %     100  %
Cost of revenue:
Licenses                                                        1  %       1  %
Subscription services                                           7  %       4  %
Professional services and other                                11  %       6  %
Total cost of revenue                                          19  %      11  %
Gross profit                                                   81  %      89  %
Operating expenses:
Sales and marketing                                            78  %      62  %
Research and development                                       31  %      18  %
General and administrative                                     28  %      27  %
Total operating expenses                                      137  %     107  %
Operating loss                                                (56) %     (18) %
Interest income                                                 -  %       -  %
Other (expense) income, net                                    (1) %       2  %
Loss before income taxes                                      (57) %     (16) %
Provision for (benefit from) income taxes                       2  %      (1) %
Net loss                                                      (59) %     (15) %

Comparison of Fiscal Year 2022 and Fiscal Year 2021

Revenue

                                         Year Ended January 31,
                                           2022              2021          Change        % Change
                                                        (dollars in thousands)
Licenses                            $    481,427          $ 346,035      $ 135,392           39  %
Subscription services                    369,867            232,542        137,325           59  %
Professional services and other           40,958             29,066         11,892           41  %
Total revenue                       $    892,252          $ 607,643      $ 284,609           47  %


Total revenue increased by $284.6 million, or 47%, for the fiscal year ended
January 31, 2022 compared to the fiscal year ended January 31, 2021, primarily
due to an increase in licenses revenue of $135.4 million and

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increase in subscription services revenue of $137.3 million. Approximately 27%
of the increase in revenue was from new customers and the remainder was
attributable to existing customers. As we continued to expand our sales efforts
in the United States and internationally, our revenue increased across all
geographical regions.

Revenue Amount and Gross Margin

                                        Year Ended January 31,
                                         2022             2021          Change        % Change
                                                      (dollars in thousands)
Licenses                            $     11,888       $  7,054       $   4,834           69  %
Subscription services                     60,565         24,215          36,350          150  %
Professional services and other           96,415         34,588          61,827          179  %
Total cost of revenue               $    168,868       $ 65,857       $ 103,011          156  %
Gross margin                                  81  %          89  %


Total cost of revenue increased by $103.0 million, or 156%, for the fiscal year
ended January 31, 2022 compared to the fiscal year ended January 31, 2021. Cost
of licenses revenue increased primarily due to an increase in third-party
software resale costs of $5.1 million, partially offset by a decrease in
amortization of software development costs. Cost of subscription services
revenue increased primarily due to an increase of $26.8 million in
personnel-related expenses, which included an increase of $11.7 million in
stock-based compensation expense, mostly due to recognition of expense beginning
in the first quarter of fiscal 2022 as a result of the satisfaction of
IPO-related performance condition for restricted stock units ("RSUs"), and the
remainder of which was largely due to increased headcount. Cost of subscription
services revenue was also impacted by an increase in hosting and software
services of $5.5 million, an increase in depreciation and amortization expense
of $2.3 million, and an increase in third-party consulting fees of $1.5 million.
Cost of professional services and other revenue increased primarily due to an
increase of $46.4 million, in personnel-related expenses, which included
$28.0 million in stock-based compensation expense, mostly due to recognition of
expense beginning in the first quarter of fiscal 2022 as a result of the
satisfaction of IPO-related performance condition for RSUs, and an increase of
$4.5 million related to employer tax on settlement of equity awards, and the
remainder of which was largely due to increased headcount. Cost of professional
services and other revenue was also impacted by a $15.7 million increase in
third-party consulting fees.

Our gross margin decreased to 81% for the fiscal year ended January 31, 2022
compared to 89% for the fiscal year ended January 31, 2021, primarily as a
result of stock-based compensation expense recognized in connection with the
satisfaction of performance-based vesting conditions following our IPO.

Operating Expenses

Sales and Marketing

                            Year Ended January 31,
                             2022             2021          Change        % Change
                                          (dollars in thousands)
Sales and marketing     $   697,682       $ 380,154       $ 317,528           84  %
Percentage of revenue            78  %           62  %


Sales and marketing expense increased by $317.5 million, or 84%, for the fiscal
year ended January 31, 2022 compared to the fiscal year ended January 31, 2021.
This increase was primarily attributable to an increase of $324.7 million in
personnel-related expenses, which included an increase of $221.6 million in
stock-based compensation, mostly due to recognition of expense beginning in the
first quarter of fiscal 2022 as a result of the satisfaction of IPO-related
performance condition for RSUs, and an increase of $39.3 million related to
employer tax on settlement of equity awards, and the remainder of which was
largely due to increased headcount. Sales and marketing expense was also
impacted by an increase of $22.2 million in marketing costs related to our IPO
and marketing events, as well as an aggregate increase of $9.8 million related
to recruiting and software service expenses. These increases were partially
offset by a decrease of $40.4 million in sales commissions expense due to the
accounting impact of changes to our sales incentive plan for fiscal year 2022.

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Research and Development

                               Year Ended January 31,
                                2022             2021          Change        % Change
                                             (dollars in thousands)
Research and development   $   276,657       $ 109,920       $ 166,737          152  %
Percentage of revenue               31  %           18  %


Research and development expense increased by $166.7 million, or 152%, for the
fiscal year ended January 31, 2022 compared to the fiscal year ended January 31,
2021. The increase was primarily attributable to an increase of $157.6 million
in personnel-related expenses, which included an increase of $124.3 million in
stock-based compensation, mostly due to recognition of expense beginning in the
first quarter of fiscal 2022 as a result of the satisfaction of IPO-related
performance condition for RSUs, and an increase of $5.8 million related to
employer tax on settlement of equity awards, and the remainder of which was
largely due to increased headcount. Research and development expense was also
impacted by an increase of $8.2 million in third-party software service and
hosting costs.

General and Administrative

                                  Year Ended January 31,
                                   2022             2021          Change       % Change
                                                (dollars in thousands)
General and administrative    $   249,991       $ 162,035       $ 87,956           54  %
Percentage of revenue                  28  %           27  %


General and administrative expense increased by $88.0 million, or 54%, for the
fiscal year ended January 31, 2022 compared to the fiscal year ended January 31,
2021. This increase was primarily attributable to an increase of $58.2 million
in personnel-related expenses, which included an increase of $43.8 million in
stock-based compensation, mostly due to recognition of expense beginning in the
first quarter of fiscal 2022 as a result of the satisfaction of IPO-related
performance condition for RSUs, and an increase of $3.0 million related to
employer tax on settlement of equity awards, and the remainder of which was
largely due to increased headcount. General and administrative expense was also
impacted by an increase of $12.1 million in third-party consulting fees, an
increase of $9.9 million in insurance-related expenses as a result of becoming a
public company, an increase of $3.9 million related to hosted business
applications, and an increase of $3.3 million related to other tax expenses,
partially offset by a $4.8 million aggregate decrease in bad debt and rent
expenses.

Interest Income

                              Year Ended January 31,
                             2022                   2021        Change       % Change
                                            (dollars in thousands)
Interest income         $     3,551              $ 1,152       $ 2,399          208  %
Percentage of revenue             -   %                -  %


Interest income increased by $2.4 million, or 208%, for the fiscal year ended
January 31, 2022 compared to the fiscal year ended January 31, 2021 as a result
of the period-over-period increase in our cash and cash equivalents and
marketable securities.

Other (Expense) Income, Net

                                         Year Ended January 31,
                                          2022             2021          Change        % Change
                                                       (dollars in thousands)
       Other (expense) income, net   $    (13,488)      $ 14,513       $ (28,001)        (193) %
       Percentage of revenue                   (1) %           2  %


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Other expense, net increased by $28.0 million, or 193%, for the fiscal year
ended January 31, 2022 compared to the fiscal year ended January 31, 2021. The
change was primarily attributable to foreign exchange gains recognized in the
prior period, partially offset by a decrease in interest expense in the current
period.

Provision For (Benefits From) Income Taxes

                                                Year Ended January 31,
                                               2022                 2021              Change               % Change
                                                                      (dollars in thousands)
Provision for (benefit from) income taxes $    14,703           $  (2,265)         $  16,968                     (749) %
Percentage of revenue                               2   %              (1) %


Provision for income taxes increased by $17.0 million, or 749%, for the fiscal
year ended January 31, 2022 compared to the fiscal year ended January 31, 2021.
The effective tax rate was (2.9)% and 2.4% for the fiscal years ended
January 31, 2022 and January 31, 2021, respectively. The change was primarily
driven by higher foreign tax expenses resulting from higher year-over-year
earnings of our cost-plus margin entities.

Liquidity and Capital Resources


We have financed operations since our inception primarily through customer
payments and net proceeds from sales of equity securities. Our principal uses of
cash in recent periods have been funding our operations, investing in capital
expenditures, and engaging in various business acquisitions. As of January 31,
2022 and 2021, our principal sources of liquidity were cash, cash equivalents,
restricted cash, and marketable securities totaling $1,884.7 million and
$474.0 million, respectively, and we had an accumulated deficit of
$1,495.9 million and $970.4 million, respectively. During the fiscal years ended
January 31, 2022 and 2021, we had net losses of $525.6 million and
$92.4 million, respectively, and net cash (used in) provided by operations of
$(55.0) million and $29.2 million, respectively.

In April 2021, we completed our IPO, which resulted in the issuance of
13.0 million shares of our Class A common stock at a public offering price of
$56.00 per share, including 3.6 million shares pursuant to the exercise in full
of the underwriters' option to purchase additional shares. Net proceeds were
$687.9 million after deducting underwriting discounts and commissions of
$35.6 million and offering expenses of $4.5 million.

In July 2020, we completed our Series E preferred stock financing with gross
proceeds totaling $225.9 million. In February 2021, we completed our Series F
preferred stock financing with gross proceeds totaling $750.0 million. We have
also entered into the Credit Facility (as defined below) with an available
borrowing capacity of $200.0 million.

Our future capital requirements will depend on many factors, including our
revenue growth rate, our product sales, license renewal activity, the timing and
the amount of cash received from customers, the expansion of sales and marketing
activities, the timing and extent of spending to support development efforts,
the introduction of new and enhanced products, the continuing market adoption of
our products, expenses associated with our international expansion, and the
timing and extent of additional capital expenditures to invest in existing and
new office spaces. We may, in the future, enter into arrangements to acquire or
invest in complementary businesses, products, and technologies. We may be
required to seek additional equity or debt financing. In the event that we
require additional financing, we may not be able to raise such financing on
terms acceptable to us or at all. If we are unable to raise additional capital
or generate cash flows necessary to expand our operations and invest in
continued innovation, we may not be able to compete successfully, which would
harm our business, operations and financial condition.

We believe that our current cash, cash equivalents, redeemable securities, payments from customers, and borrowing capacity will be sufficient to fund our anticipated cash requirement for the next twelve months.

Credit Facility


In January 2020, we entered into an Amended and Restated Loan and Security
Agreement (the "Credit Agreement") with HSBC Bank USA, N.A, HSBC Ventures USA
Inc., and Silicon Valley Bank, which provided a $100.0 million senior secured
revolving credit facility. We repaid the Credit Agreement in full in July 2020.
In October 2020, we entered into a new Senior Secured Credit Facility (the
"Credit Facility") with HSBC Ventures USA Inc.,

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Silicon Valley Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, LTD,
which provided a $200.0 million senior secured revolving credit facility with a
maturity date of October 30, 2023. Our obligations under the Credit Facility are
secured by substantially all of our assets, except for our intellectual
property. The Credit Facility contains certain customary covenants, including,
but not limited to, those relating to additional indebtedness, liens, asset
divestitures, and affiliate transactions. We may use the proceeds of future
borrowings under the Credit Facility for refinancing other indebtedness, working
capital, capital expenditures and other general corporate purposes, including
permitted business acquisitions.

Borrowings under the Credit Facility bear interest at a base rate, as defined in
the Credit Facility, plus a margin of 2.0% or 3.0% depending on the base rate.
The Credit Facility is subject to customary fees for loan facilities of this
type, including ongoing commitment fees at a rate of 0.25% per annum on the
daily amount available to be drawn. As of January 31, 2022, we had
no outstanding debt under the Credit Facility and were in compliance with our
covenants thereunder.

Cash Flows

The following table summarizes our cash flows for the periods shown:

                                                                          Year Ended January 31,
                                                                         2022                 2021
                                                                          (dollars in thousands)
Net cash (used in) provided by operating activities(1)              $    (54,963)         $   29,177
Net cash used in investing activities                               $    (35,442)         $ (125,991)
Net cash provided by financing activities                           $  

1,469,673 $ 250,418

(1) Includes: Payments for employer payroll taxes related to employee equity transactions

                                                        $    

(51,693) $ – Net receipts of employee tax withholdings on stock option exercises $ 6,382 $ –



Operating Activities

Our largest source of operating cash is cash generation from sales to our
customers. Our primary uses of cash from operating activities are for
personnel-related expenses, direct costs to deliver our licenses, and marketing
expenses. To date, our operating cash flows have generally been negative and we
have supplemented working capital requirements primarily through net proceeds
from the sale of equity securities.

Net cash used in operating activities for the fiscal year ended January 31, 2022
of $55.0 million was driven by cash payments for operating expenditures,
primarily associated with the compensation of our teams, including increased
year-end fiscal 2021 sales commissions and bonuses paid in the first quarter of
fiscal 2022 and employer payroll taxes related to employee equity transactions.
Other cash operating expenditures included payments for professional services,
software, and office rent. These outflows were partially offset by cash
collections from our customers, which were approximately 44% higher than in the
prior year.

Net cash provided by operating activities for the fiscal year ended January 31,
2021 of $29.2 million was driven by cash collections from our customers,
partially offset by cash payments for operating expenditures associated with the
compensation of our teams and payments for professional services, software, and
office rent.

Investing Activities

Net cash used in investing activities for the fiscal year ended January 31, 2022
of $35.4 million was driven by $16.9 million in net purchases of marketable
securities and other investments, $8.9 million in capital expenditures, $5.5
million in cash consideration associated with the acquisition of Cloud Elements,
which is presented net of cash acquired, $3.0 million in capitalized software
development costs, and $1.2 million in purchases of intangible assets.

Net cash used in investing activities for the fiscal year ended January 31, 2021
of $126.0 million was driven by purchases of marketable securities of $103.1
million, deferred payments related to previous business

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acquisitions of $ 19.7 millioncapital expenditures of $ 2.0 millionand capitalized software development costs $ 1.2 million.

Funding Activities


Net cash provided by financing activities for the fiscal year ended January 31,
2022 of $1,469.7 million was primarily driven by $749.8 million in net proceeds
from issuance of Series F convertible preferred stock, $692.4 million in net
proceeds from our IPO after deducting underwriting expenses and commissions,
proceeds from employee stock purchase plan contributions of $19.0 million,
proceeds from the exercise of stock options of $12.2 million, and net receipts
of tax withholdings on sell-to-cover equity award transactions of $10.4 million,
partially offset by payments of tax withholdings on net settlement of equity
awards of $10.5 million and payments of IPO-related costs of $3.7 million.

Net cash provided by financing activities for the fiscal year ended January 31,
2021 of $250.4 million was primarily driven by net proceeds from our Series E
convertible preferred stock financing of $225.6 million and proceeds from
exercises of stock options of $26.4 million.

Material Cash Requirements

The following table summarizes the cumulative impact of our material contractual obligations during January 31, 2022 is expected to have in our cash flows in the periods indicated (in the thousands):

                                                           Payments Due by Period
                                                   Less Than                                    More Than
                                      Total         1 Year        1-3 Years      3-5 Years       5 Years
                                                           (dollars in thousands)
   Operating lease commitments     $  79,860      $   2,399      $  17,705      $  10,337      $  49,419
   Purchase commitments               56,845         12,807         39,392          4,646              -
   Total contractual obligations   $ 136,705      $  15,206      $  57,097      $  14,983      $  49,419

The values ​​in the table above relate to agreements that are enforceable and legally valid. Obligations under contracts that we can cancel without substantial penalty are not included in the table above.

Critical Accounting Estimates


Our consolidated financial statements are prepared in accordance with GAAP. The
preparation of consolidated financial statements requires management to make
estimates and assumptions that affect the amounts of assets and liabilities at
the date of the consolidated financial statements and amounts of revenue and
expenses reported during the period. Our estimates are based on historical
experience and various other assumptions that we believe to be reasonable under
the circumstances, and we evaluate our estimates on an ongoing basis. The
following are the accounting estimates that we believe have the most significant
impact on our consolidated financial statements.

Income Recognition


We recognize revenue in accordance with Accounting Standards Codification
("ASC") 606, Revenue from Contracts with Customers. ASC 606 requires recognition
of revenue when control of promised goods or services is transferred to
customers, in an amount that reflects the consideration we expect to be entitled
to receive in exchange for those goods or services. Revenue recognition is
inherently judgmental, particularly in the case of complex arrangements that
include multiple performance obligations. Our most significant judgments relate
to the identification of performance obligations within a contract (including
whether those obligations are distinct or should be combined), determining the
standalone selling price ("SSP") for each performance obligation, and allocating
the transaction price to the performance obligations, all of which impact the
pattern and timing of revenue recognition.

At the inception of a contract with a customer, we assess the goods or services
promised to identify distinct performance obligations. The distinct performance
obligations identified in our typical contracts include but are not limited to
software license (term or perpetual), support and maintenance,
when-and-if-available upgrades, training services, and professional services. If
a promised good or service is determined not to be distinct, we combine that

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product or service together with other products or services until the combined bundle is a unique performance obligation, or until all the goods or services in the contract are combined into a single performance obligation.


Most of our contracts contain multiple performance obligations. The transaction
price is allocated to the separate performance obligations on a relative SSP
basis. Whenever possible, we refer to observable SSP, which is the price of the
same good or service in standalone sales to similar customers in similar
circumstances. If observable SSP is not available, we next consider our prior
geographical discounting practices for transactions within the preceding twelve
months to determine whether a historical SSP exists. If neither observable SSP
nor historical SSP is available, we utilize information such as external market
data, broader historical pricing data, or list prices, while maximizing the use
of observable inputs and methodologies, or, in cases of highly variable or
uncertain selling price, may use a residual approach.

For more information about our income recognition, refer to Note 2,

Summary of Significant Accounting Policies -Recognition and Income Record

3, Revenue Recognition, included in Item 8 of this Annual Report on Form 10-K.


Stock-Based Compensation

We recognize stock-based compensation expense in accordance with the provisions
of ASC 718, Compensation-Stock Compensation. ASC 718 requires the measurement
and recognition of compensation expense for all stock-based awards made to
employees, directors, and non-employees based on the grant date fair value of
the awards.

The fair value of each RSU is equal to the fair value of our Class A common stock at the date of issue. The fair value of stock options is determined using the Black-Scholes pricing model, which uses the following inputs:


•Fair value of our common stock. Subsequent to the IPO, market close price of
our publicly-traded Class A common stock on the valuation date is used. Prior to
the IPO, because there was no public market for our common stock, our board of
directors, with the assistance of a third-party valuation specialist, determined
the common stock fair value as of the valuation date. (See below for further
discussion of pre-IPO valuation of our common stock.)

• Price of exercise. Our current practice is to provide options with the price of that exercise $ 0.10 in some non-US jurisdictions.


•Expected term. We do not yet have sufficient relevant historical exercise data
to provide a reasonable basis for estimation of expected term post-IPO; we
presently use the simplified method permitted under Staff Accounting Bulletin
14, which deems the expected term to be the average of the time-to-vest and the
contractual life.

•Expected volatility. As a public market for our common stock did not exist
prior to the IPO, we have limited trading history on which to base expectations
of volatility; we presently estimate expected volatility based on the volatility
of similar publicly held entities, referred to as "guideline companies," over a
look-back period equivalent to the expected term. In evaluating the similarity
of guideline companies, we consider factors such as industry, stage of life
cycle, size, and degree of financial leverage.

•Risk-free interest rate. The risk-free interest rate is based on the U.S.
Treasury yield in effect at the time of grant for a period consistent with the
expected term.

• Estimated dividend yield. The expected dividend is assumed to be zero, as we have not yet declared or paid any monetary dividends and we do not intend to declare dividends in the foreseeable future.


Given their immaterial $0.10 exercise price, the Black-Scholes value of our
recently granted stock options closely approximates intrinsic value, or fair
value of common stock less exercise price; the other aforementioned inputs
(expected term, expected volatility, risk-free interest rate, and estimated
dividend yield) have an insignificant impact on the results of the Black-Scholes
model.

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As a result, our stock -based compensation cost is more sensitive to the fair value of our common stock because it relates to the analysis of stock options and RSU.


Following our IPO, no estimates are involved in determining the fair value of
our common stock because observable market prices are utilized. Prior to the
IPO, the fair value of our common stock was determined by our board of
directors, using contemporaneous third-party valuations and input from
management, in accordance with the guidelines outlined in the American Institute
of Certified Public Accountants Practice Aid, Valuation of
Privately-Held-Company Equity Securities Issued as Compensation. In valuing our
common stock, the fair value of our business, or enterprise value, was
determined based on objective and subjective factors using various methods under
the market approach:

• The company’s subject matter method involves the use of the company’s own associated stock transactions, such as the price at which a recent class of equity was issued by the company or transacted between third parties.


•The guideline public company method estimates value based on a comparison of
the company to comparable public companies in a similar line of business. From
the comparable companies, a representative market value multiple is determined
and then applied to our financial results to estimate the value of the subject
company.

• The rate of return method estimates value by applying a rate of return, consistent with performance and achieving growth milestones, to the previously estimated value of equity, as the one determined using other methods .


The resulting equity value was then allocated to each class of stock using the
option pricing model or a hybrid method that considered both option pricing and
the probability-weighted expected return method. After the equity value was
determined and allocated to the various classes of stock, a discount for lack of
marketability was applied to arrive at the fair value of ordinary shares,
because it is assumed that a private company stockholder has limited
opportunities to sell and that any such sale would involve significant
transaction costs, thereby reducing overall fair market value. In assessing the
fair value of common stock for grant dates occurring between formal valuations,
we considered the amount of time between the valuation date and the grant date
to determine whether to use the latest common stock valuation or a straight-line
interpolation between the two valuation dates.

During fiscal year 2022, we granted 3.0 million equity awards that were
dependent on the subjective pre-IPO valuation techniques described above. A
hypothetical 10% change in the estimated fair value of our common stock would
have resulted in a $16.0 million change in the total fair value of these equity
awards, $9.5 million of which would have been recognized in expense during the
fiscal year ended January 31, 2022.

For more information about our stock-based payments, refer to the Note

2, S ummary of S igificant Ac counting Polici es -Stock-Based Compensation and Note 13, Equity Incentive Plans and Stock-based Compensation, included in Item 8 of this Form 10-K.


JOBS Act Accounting Election

We are an "emerging growth company", as defined in the Jumpstart Our Business
Startups Act of 2012 (the "JOBS Act"), and, for so long as we continue to be an
emerging growth company, we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of
the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements and
exemptions from the requirements of holding a nonbinding advisory vote on
executive compensation and shareholder approval of any golden parachute payments
not previously approved. In addition, pursuant to Section 107 of the JOBS Act,
as an emerging growth company, we have elected to take advantage of the extended
transition period for complying with new or revised accounting standards until
those standards would otherwise apply to private companies until the earlier of
the date we (1) are no longer an emerging growth company or (2) affirmatively
and irrevocably opt out of the extended transition period provided in the JOBS
Act. As a result, our financial statements may not be comparable to companies
that comply with new or revised accounting pronouncements as of public company
effective dates.

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Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies -Recently Released Accounting Pronouncements and -Recently Adopted Accounting Pronouncements, included in Part II, Item 8 of this Annual Report on Form 10 -K for additional information.

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