S 10-K & 10-Q changes, risk factors and insider trading

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the accompanying notes included before making a decision to invest in our Class A common stock. These disclosures reflect the Company’s belief and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Our business, financial condition, operating results, or prospects could also be adversely affected by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, financial condition, operating results, and prospects could be adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose all or part of your investment.

We have incurred net losses in all periods since our inception, and we may not achieve or maintain profitability in the future. We experienced a net loss of $288.4$450.7 million and $338.7$288.4 million for the fiscal years ended January 31, 20252026 and 2024,2025, respectively. As of January 31, 2025,2026, we had an accumulated deficit of $1.6$2.1 billion. While we have historically experienced significant growth in revenue, we cannot predict when or whether we will reach or maintain profitability. We also expect our operating expenses to increase in the future as we continue to invest in our future growth, including expanding our research and development function to drive further development of our platform, expanding our sales and marketing activities, developingand the functionality to expandexpanding into adjacent markets,markets and reaching customers in new geographic locations, which could negatively affect our operating results if our total revenue does not increase. In addition to the anticipated costs to grow our business, we have incurred and expect to continue to incur significant legal, accounting, and other expenses as a public company. Our revenue growth is expected to slow down as we scale and our revenue may decline for a number of other reasons, including reduced demand for our platform, increased competition, a decrease in the growth or reduction in the size of our overall market, or if we cannot capitalize on growth opportunities, including acquisitions, new products, services, and feature releases. While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, including personnel restructuring plans, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities. If we fail to increase our revenue to offset increases in our operating expenses, or manage our costs as we invest in our business, we may not achieve or sustain profitability.

•our ability to successfully incorporate new technologies into our platform, including generative and agentic AI;

•general global macroeconomic and political conditions, both domestically and in our foreign markets that could impact some or all regions where we operate, including the changes in U.S. federal spending, significant political or regulatory developments including changes in tariffs and trade restrictions,policy, global economic slowdowns, actual or perceived global banking and finance related issues, increasedgovernment risk ofshutdowns, inflation, interest rate volatility, supply chain disruptions, labor shortages, and potential global recession;

•changes in customer, distributordistributor, or reseller requirementsrequirements, or market needs or preferences;

•the timing and success of new product and service introductions by us or our competitorscompetitors, or any other change in the competitive landscape of our industry, including consolidation among our competitors or customerscustomers, and strategic partnerships entered into by and between our competitorscompetitors, and changes in pricing;

•insolvency or credit difficulties confronting our customers, which could increase due to U.S. and global macroeconomic issues, including actual or perceived global banking and finance related issues, inflation, interest rate volatility, government shutdowns and market downturns, which would adversely affect their ability to purchase or pay for our platform, products, and services in a timely manner or at alldownturns;

Conditions in our market could change rapidly and significantly as a result of technological advancements, including but not limited to increased advancements and proliferation in the use of open artificial intelligence applications, partnering or acquisitions by our competitors or continuing market consolidation. Some of our competitors have recently made or could make acquisitions of businesses or have established cooperative relationships that may allow them to offer more directly competitive and comprehensive products and services than were previously offered and adapt more quickly to new technologies and customer needs. These competitiveCompetitive pressures in our market or our failure to compete effectively may result in price reductions, fewer orders, reduced revenue and gross margin, increased net losses, and loss of market share. Even if there is significant demand for endpoint and cloud security solutions like ours, if our competitors include functionality that is, or is perceived to be, equivalent to or better than ours in legacy products that are already generally accepted as necessary components of an organization’s IT security architecture, we will have difficulty increasing the market penetration of our platform. Furthermore, even if the functionality offered by other cybersecurity providers is different and more limited than the functionality of our platform, organizations may elect to accept such limited functionality in lieu of purchasing products and services from additional vendors like us. If we are unable to compete successfully, or if competing successfully requires us to take aggressive action with respect to pricing or other actions, our business, financial condition, and operating results would be adversely affected.

Our operating results have varied significantly from period to period in the past, and we expect that our operating results will continue to vary significantly in the future such that period-to-period comparisons of our operating results may not be meaningful. This could adversely affect our business, operating results, and financial condition. Accordingly, our financial results in any one quarter should not be relied upon as indicative of future performance. Fluctuations in quarterly results may negatively impact the trading price of our Class A common stock. Our quarterly financial results may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, without limitation:

•global events, general global macroeconomic and political conditions, both domestically and in our foreign markets that could impact some or all regions where we operate,internationally, including geopolitical conflicts (including, but not limited to, the conflict in Iran), changes in U.S. federal spending, significant political or regulatory developments including changes in tariffs and trade restrictions,policy, tariffs, global economic slowdowns, actual or perceived global banking and finance related issues, government shutdowns, increased risk of inflation, interest rate volatility, supply chain disruptions, labor shortages and potential global recession;

•the budgeting cycles, seasonal buying patterns, and purchasing practices of customers; including decisions by organizations to purchase security solutions from larger, more established security vendors or from their primary IT equipment vendors and customer insolvency or credit difficulties confronting our customers, affecting their ability to purchase or pay for our solution;

In addition, we experience seasonal fluctuations in our financial results as we typically receive a higher percentage of our annual orders from new customers, as well as renewal orders from existing customers, in our fourth fiscal quarter as compared to other quarters due to the annual budget approval process of many of our customers.

Any of the above factors, individually or in the aggregate, may result in significant fluctuations in our financial and other operating results from period to period. As a result of this variability, our historical operating results should not be relied upon as an indication of future performance. Moreover, this variability and unpredictability could result in our failure to meet our operating plan or the expectations of investors or analysts for any period. If we fail to meet such expectations for the reasons described above or other reasons,expectations, our stock price could fall substantially, and we could face costly lawsuits, including securities class action lawsuits.

Our business depends on the overall demand for information technology and on the economic health of our current and prospective customers. In addition, the purchase of our platform is often discretionary and may involve a significant commitment of capital and other resources. Weak global and regional economic conditions, including the changes in U.S. federal spending, significant political or regulatory developments including changes in trade policy (including actual or threatened changes in tariffs and trade restrictions,restrictions), U.S. and global macroeconomic issues, actual or perceived global banking and finance related issues, labor shortages, supply chain disruptions, fluctuating interest rates and inflation, spending environments, geopolitical instability, warfare and uncertainty, weak economic conditions in certain regions or a reduction in information technology spending regardless of macroeconomic conditions, including the effects of the conflicts in the Middle East and Ukraine, and tensions between China and Taiwan, could adversely affect our business, operating results, and financial condition, including resulting in longer sales cycles, a negative impact on our ability to attract and retain new customers or expand our platform or sell additional products and services to our existing customers, lower prices for our platform, higher default rates among our channel partners, reduced sales to new or existing customers and slower or declining growth. For example, as a result of current uncertainty in macroeconomic conditions and related higher cost consciousness around IT budgets, we have experiencedcontinued to experience certain impacts on our business, including a decline in usage and consumption patterns from certain customers, especially larger enterprise customers, longer sales cycles, and deal downsizing by new customers and of renewals by existing customers, especially larger enterprises. We expect the global macroeconomic conditions impacting demand to persist in the near term. Deterioration in economic conditions in any of the countries in which we do business could also cause slower or impaired collections on accounts receivable, which may adversely impact our liquidity and financial condition.

We are meaningfully investing in our platform, including growing our cloud security product. For example, in FebruarySeptember 2024,2025, we acquired PingSafe,Prompt, a cloudprivate company focused on the generative and agentic AI security platform, which we expect will enable us to couple PingSafe’s CNAPP with our cloud workload securityspace, and cloudObservo, an AI-ready data securitypipeline capabilities and Stride, a workflow automation tool that will enable us to further our autonomous platform vision.company.

We incorporate generative AI into many of our offerings, including Purple AI whichand Wayfinder. Purple AI streamlines threat hunting across various types of data and synthesizes threat intelligence and insights in natural language. Wayfinder uses agentic AI, which applies advanced reasoning and automation to process volumes of telemetry and security data, triaging security alerts more accurately and with context. As with many innovations, generative AI presents risks, challenges, and unintended consequences that could impact our successful ability to incorporate the use of generative AI in our business. For example, language models may provide flawed or inaccurate results or misinterpret prompts. Further, data practices by us or others that result in controversy could also impair the acceptance of AI solutions. This in turn could undermine confidence in the decisions, predictions, analyses or other content that our AI initiatives produce. Our generative AI solutions are reliant on third-party foundation models that may change their availability or commercial modelterms in a manner that negatively affects our offering. Furthermore, the integration of third-party AI models with our products and services relies on certain safeguards implemented by the third-party developers of the underlying AI models, including those related to the accuracy, bias, and other variables of the data and their safeguards may be insufficient. In addition, our competitors or other third parties may incorporate generative AI solutions into their products more successfully than us, and their solutions may achieve higher market acceptance than ours, which may result in us failing to recoup our investments in developing generative AI-powered offerings. We have made and expect to continue to make significant investments in our AI technology, including in Purple AI.AI and Wayfinder. Our ability to employ AI, or the ability of our competitors to do so more successfully, may negatively impact our gross margins, impair our ability to compete effectively, result in reputational harm and have an adverse impact on our operating results. Further, we have, and may in the future, implement AI-based tools and solutions, including third-party software solutions, in order to, among other things, drive efficiencies in our business, IT systems and other internal processes and improve customer support. If these tools and solutions do not achieve their expected benefits or if such tools and solutions have defects, bugs, errors, or vulnerabilities, our business may be adversely impacted.

Moreover, AI may give rise to litigation risk, including potential intellectual property, privacy, or cybersecurity liability. Because AI is an emerging technology, there is not a mature body of case lawlaw, particularly around copyright, construing the appropriateness of certain of its uses of data whether through the employment of large language models or other models leveraging data found on the Internet and the evolution of this law may limit our ability to exploit AI tools, or expose us to litigation. Intellectual property disputes regarding the use of copyrighted or proprietary data to train AI models, or the outputs generated by such models, could result in costly litigation and liability. Further, AI presents emerging ethical issues and if our use of AI algorithms draws controversy due to their perceived or actual impact on society,society such as concerns regarding bias, discrimination, misinformation, automation or transparency, we may experience brand or reputational harm, or competitive harm.

In addition, given the complex nature of AI technology, we face an evolving regulatory landscape. The U.S. federal government, various state legislatures and other government entities worldwide have implemented and are in the process of implementing specific laws, regulations, policies and obligations relating to the use of AI, and we will need to continue to monitor these developments to ensure our products that we sell to government entities remain compliant with such applicable regulations. Furthermore,For example, the currentE.U. administration’sAI approachAct, which entered into force in 2024 with phased implementation that began in 2025, imposes obligations on AI providers and deployers based on risk classification, including requirements for transparency, documentation, and risk management. In the U.S., a December 2025 executive order asserted federal preemption over the state AI regulations, creating regulatory uncertainty as the scope and enforceability of this preemption claim remains subject to debate and challenge. Compliance with evolving AI regulations will require significant investment in quality assurance, testing, documentation, and regulationreporting ofsystems, AIand is expectedfailure to deviatecomply fromcould thatresult ofin thefines, previousenforcement administrationactions, or restrictions on our ability to offer AI-powered products and we will need to adapt to any resulting changes, including new or revised executive orders and initiatives.services.

Companies are subject to an increasing number and wide variety of attacks on their networks on an ongoing basis. Traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, ransomware, account takeover, business email compromise, employee fraud, theft or misuse, social engineering (including phishing, deepfakes, voice cloning), software supply-chain compromises, denial of service attacks, reverse-engineering of AI algorithms, and sophisticated nation-state and nation-state supported actors engage in intrusions and attacks that create risks for our internal networks, cloud deployed products and the information they store and process. Cybersecurity companies face particularly intense attack efforts, and we have faced, and will continue to face, cyber threats and attacks from a variety of sources. The research that we conduct and report may make us, or our customers, a further target for attacks of all kinds. We provide security services to many highly targeted entities, such as U.S. government agencies, defense contractors, and non-U.S. governments. Our work protecting these entities increases the likelihood that we may be targeted by nation-state actors, including those from countries with a history of conducting cyber operations against such organizations. State-supported and geopolitical-related cyberattacks may rise in connection with regional geopolitical conflicts such as the conflicts in the Middle East and Ukraine, and tensions between China and Taiwan.conflicts. In addition, our cybersecurity product is likely considered a valuable target for lateral attacks because of its highly privileged access. Additionally, bad actors are beginning to utilizeutilizing AI-based tools to execute more sophisticated and scalable attacks, creating unprecedented cybersecurity challenges.

Although we have implemented security measures designed to prevent such attacks, our networks and systems, and those of our third-party vendors and service providers may be breached due to the actions of outside parties, human error, insufficient cybersecurity controls, malfeasance, a combination of these, or otherwise, and as a result, an unauthorized party may obtain access to our and/or our customers’ systems, networks, or data. We and our third-party vendors and service providers may face difficulties or delays in identifying or otherwise responding to any attacks or actual or potential security breaches or threats. These risks are exacerbated by developments in generative AI. A breach in our or in our third-party vendors and service providers’ data security or an attack against our platform or our third-party vendors’ or service providers’ platform could impact our networks or the networks and data of our customers that are secured by our platform, creating system disruptions or slowdowns and providing access to malicious parties to information stored on our networks or the networks of our customers, resulting in data being publicly disclosed, misused, altered, lost, or stolen, which could subject us to liability and adversely affect our financial condition. If compromised, our own systems or the systems of our third-party vendors and service providers could be used to facilitate or magnify an attack. Further, the trend towards remote and hybrid work by companies and individuals in has generally increased the attack surface available to bad actors for exploitation, and as such, the risk of a cybersecurity incident potentially occurring has increased. We have accordingly increased our investments in protective measures and risk mitigation strategies, but we cannot guarantee that our efforts, or the efforts of our third-party vendors and service providers or efforts of others upon whom we rely and partner with, will be successful in preventing any such information security incidents. Protecting our own assets has become more expensive from a dollar investment and time perspective and these costs may increase as the threat landscape increases,evolves, including as a result of the use of AI by bad actors.

Any actual, alleged, or perceived security breach in our systems or networks or those of our third-party vendors and service providers, or any other actual, alleged or perceived data security incident we suffer, could result in damage to our reputation, negative publicity, loss of customers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, fines and penalties, costly litigation, and other liability. We may also be required to publicly disclose material security breaches, which could exacerbate the adverse impact of such incidents. We would also be exposed to a risk of loss or litigation and potential liability under applicable laws, regulations, and contracts that protect the privacy and security of personal data. For example,additional information regarding these laws and regulations, see the CaliforniaRisk ConsumerFactor Privacytitled Act“We are subject to laws and regulations affecting our business, including those related to the privacy and data protection of 2018, as amended (CCPA), imposes a private right of action for security breaches ofthe personal data thator other information we collect, process or share. Our actual or perceived failure to comply with such laws or regulations could leadharm toour some form of remedy including regulatory scrutiny, fines, private right of action settlements, and other consequences. Where a security incident involves a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data from the European Economic Area (EEA) or the U.K. in respect of which we are a controller or processor under the E.U. or U.K. General Data Protection Regulation (collectively, the GDPR), this could result in fines of up to €20 million (£17.5 million) or 4% of annual global turnover, whichever is greater. We may also be required to provide notice of such breaches to regulators and/or individuals which may result in us incurring additional costs, penalties, fines or litigation.business.”

In addition, our customer agreements may require us to promptly report security breaches to our customers involving their data on our systems or those of third-party vendors or subcontractors processing such data on our behalf. This mandatory disclosure could be costly, result in litigation, harm our reputation, erode customer trust, and require significant resources to mitigate issues stemming from actual or perceived security breaches. Further, someSome of our customers may also be subject to sector specific regulations, such as the E.U. Digital Operational Resilience Act (DORA), for financial services entities, which requiresmay require them to imposecomply contractualwith provisions on us, including certain mandatoryenhanced third-party risk management provisions.and Ifcontractual weobligations. failIn addition, if a high-profile cybersecurity incident occurs with respect to materiallyanother complySaaS withprovider theseor contractualcybersecurity requirements,vendor, wecustomers may belose subjecttrust in the security of the SaaS business model generally or in cybersecurity companies generally, which could adversely affect our ability to litigation,retain investigations,existing auditscustomers or otherattract adversenew consequences.ones.

Defects, errors, or vulnerabilities in our platform, the failure of our platform to block malware or prevent a security breach, misuse of our platform, or risks of product liability claims would harm our reputation and adversely impact our business, operating results, and financial condition.

In addition, because the techniques used by computer hackers to access or sabotage target computing environments change frequently and generally are not recognized until launched against a target, there is a risk that an advanced attack could emerge that our platform is unable to detect or prevent. Furthermore, as a well-known provider of security solutions and because security solutions are highly privileged in customers environments, our networks, platform, products, including cloud-based technology, and customers could be targeted by attacks specifically designed to disrupt our business, harm our reputation or use our technology to gain unauthorized access. In addition, regional geopolitical conflicts around the world, may result in increased cyberattacks against our customers, resulting in an increased risk of a security breach of our customers’ systems. In addition, defects or errors in our platform could result in a failure to effectively update customers’ cloud-based products. Our data centers and networks may experience technical failures and downtime, may fail to distribute appropriate updates, or may fail to meet the increased requirements of a growing customer base, any of which could temporarily or permanently expose our customers’ computing environments, leaving their computing environments unprotected against cyber threats. Any of these situations could result in negative publicity to us, damage our reputation, and increase expenses and customer relations issues, which would adversely affect our business, financial condition, and operating results.

Advances in computer capabilities, discoveries of new weaknesses and other developments with software generally used online may increase the risk we will suffer a security breach. Furthermore, our platform may fail to detect or prevent malware, ransomware, viruses, worms or similar threats for any number of reasons, including our failure to enhance and expand our platform to reflect industry trends, new technologies and new operating environments, the complexity of the environment of our clients and the sophistication of malware, viruses and other threats. Our platform may fail to detect or prevent threats in any particular test for a number of reasons. Our platform may fail to interoperate or conflict with customer environments causing customer downtime. We or our service providers may also suffer security breaches or unauthorized access to personal data, financial account information, and other confidential information due to employee error, rogue employee activity, unauthorized access by third parties acting with malicious intent or who commit an inadvertent mistake or social engineering. If we experience, or our service providers experience, any breaches of security measures or sabotage or otherwise suffer unauthorized use or disclosure of, or access to, personal data, financial account information or other confidential information, we might be required to expend significant capital and resources to address these problems. We may not be able to remedy any problems caused by hackers or other similar actors in a timely manner, or at all. To the extent potential customers, industry analysts or testing firms believe that the failure to detect or prevent any particular threat is a flaw or indicates that our platform does not provide significant value, our reputation and business would be harmed. Any real or perceived defects, errors or vulnerabilities in our platform, or any other failure of our platform to detect an advanced threat, could result in:

In addition, we cannot assure that any limitationLimitation of liability provisions in our customer agreements, contracts withmay third-partynot vendors and service providers, or other contracts would be enforceable or adequate or would otherwisefully protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matterclaims, orparticularly asunder aapplicable resultdata ofprotection federal, state, or local laws or ordinances, or unfavorable judicial decisions in the U.S., or other countries.laws. We maintain insurance to protect against certain claims associated with the use of our platform, but our insurance coverage may not adequately cover any claim asserted against us. Furthermore, our insurance coverage may not extend to all risks we face, including all AI-related risks, and may not cover us for all losses for errors or omissions caused by AI. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation, divert management’s time and other resources, and harm our reputation. We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any future claim will not be excluded or otherwise be denied coverage by any insurer. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our business, operating results, and financial condition.

As part of our business strategy, we have in the past and expect to continue to make investments in and/or acquire complementary companies, services, products, technologies, or talent. For example, in February 2024 we acquired both PingSafe, a cloud security platform, and Stride, a security automation company, and in September 2025, we acquired Prompt, a private company focused on the generative and agentic AI security space, and Observo, an AI-ready data pipeline company. We have also invested in certain privately held companies through our S Ventures fund, and wewhich may not realizegenerate areturns return on these investments. All of our venture investmentsand are subject to a risk of partial or total loss of investment capital. Our ability as an organization to acquire and integrate other companies, services or technologies in a successful manner is not guaranteed.

In the future, weWe may not be able to find suitable acquisition candidates, and we may not be able toor complete such acquisitions on favorable terms, if at all. Our due diligence efforts may fail to identify all of the challenges,material problems,risks, liabilities or other shortcomingschallenges involved in an acquisition. IfEven weif docompleted, completeacquisitions acquisitions,or weinvestments may not ultimately strengthen our competitive positionposition, ormay ability tonot achieve ourexpected business objectives,benefits, and any acquisitions we announce or complete couldmay be viewed negatively by our customers or investors.

In addition, if we are unsuccessful at integrating existingacquired andbusiness, future acquisitions,technologies or the technologies and personnel associated with such acquisitions, into our company,personnel, the revenue and operating results of the combined company could be adversely affected. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, causing unanticipated write-offs or accounting charges. Additionally, integrations could take longer than expected, or if we move too quickly in trying to integrate an acquisition, strategic investment, partnership, or other alliance, we may fail to achieve the desired efficiencies.

We have,have in the past and may in the future have,finance toacquisitions paythrough cash, incur debt, or issue equity securities to pay for any such acquisition,securities, each of which could adversely affect our financial condition and the market price of our Class A common stock. The saleissuance of equity or issuance of debt to finance any such acquisitions could result in dilution to our stockholders, which depending on the size of the acquisition, may be significant. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

•the inability to integrate product andproducts, service offeringsofferings, technologies, operations, systems, controls or personnel;

•retentionfailure ofto retain key employeesemployees, fromcustomers theor acquired companypartners;

•financial reporting, revenue recognition or other financial or control deficiencies of the acquired company that we don’t adequately address and that cause our reported results to be incorrect; and

•liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;liabilities.

•continue to attract new customers and drive broader and deeper adoption of our platform and services;

•successfully compete with other companies in the cybersecurity industry.

Our customers have no obligation to renew their subscription for our platform after the expiration of their contractual subscription period, which is generally one to three years,years. and inIn the normal course of business, some customers have elected not to renew. In addition, our customers may renew for shorter contract subscription lengths or ceasehave usingreduced certainthe features.scope or duration of their subscriptions. Our customer retention and expansion may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our services, our pricing, customer security and networking issues and requirements, our customers’ spending levels, our channel partner strategy and pricing, decreases in the number of endpoints to which our customers deploy our solution, mergers and acquisitions involving our customers, industry developments, competition, general economic conditions, or the perceived decline in the incidence of cyberattacks. If our efforts to maintain and expand our relationships with our existing customers are not successful, our business, operating results, and financial condition will materially suffer.

Our platform must effectively interoperate with our customers’ existing IT infrastructure, which often has different specifications, utilizes multiple protocol standards, deploys products and services from multiple vendors, and contains multiple generations of products and services that have been added over time. As a result, our solutions can sometimes encounter interoperability issues on deployment or over time, which require additional support and problem solving with customers, in some cases, at a substantial cost to us. We may modify our software or introduce new capabilities so that our platform interoperates with a customer’s infrastructure. These issues could cause longer deployment and integration times for our platform, leading to customer churn, which would adversely affect our business, operating results, and financial condition. In addition, governmentGovernment and other customers may require our platform to comply with certain security or other certifications and standards.standards; If we are unablefailure to achieve,maintain or are delayed in achieving,such compliance withcould thesedisqualify certifications and standards, we may be disqualifiedus from selling our platform to suchthese customers,customers or may otherwise be atcreate a competitive disadvantage, either of which could adversely affect our business, operating results, and financial condition.disadvantage.

Our platform is hosted by third-party cloud hosting providers including AWS. Our software and systems are designed to use computing, storage capabilities, bandwidth, and other services provided by such cloud hosting providers, and currently our cloud service infrastructure is primarily run on AWS. We have experienced, and expect in the future that we may experience from time to time, interruptions, delays or outages in service and availability due to a variety of factors.factors, Capacityincluding as we continue to innovate, modernize and transition to new cloud infrastructure. Product, platform and service disruptions including capacity constraints could arise from a number of causes such as technical failures, natural disasters, fraud, or security attacks. Such risks may become more pronounced as we continue to scale our business. The level of service provided by our cloud hosting providers, or regular or prolonged interruptions in that service, could also impact the use of, and our customers’ satisfaction with, our platform and could harm our business and reputation. In addition, hosting costs are expected to increase as our customer base grows, whichand we may also experience component shortages and pricing increases from our cloud hosting providers as a result of increased demand for computing and storage resources. Any of these factors could adversely affect our business, operating results, and financial condition.

Any of these factorsplatform defects, interoperability issues, or service disruptions could reduce our revenue, subject us to liability, and cause our customers to decline to renew their subscriptions, any of which would harm our business and operating results.

We believe that maintaining and enhancing our brand and our reputation as a leading platform provider of endpointendpoint, cloud, identity, AI, and platformdata security solutions is critical to our relationship with our existing customers, channel partners, and alliance partners and our ability to attract new customers and partners. The successful promotion of our brand will depend on a number of factors, including our ability to continue to develop additional features for our platform, our ability to successfully differentiate our platform from competitive cloud-basedAI-powered or legacy security solutions, our marketing efforts, and, ultimately, our ability to detect and stop breaches. Although we believe it is important for our growth, our brand promotion activities may not be successful or yield increased revenue.

Under certain circumstances, our employees may have access to our customers’ platforms.platforms Anand employee may take advantagemisuse of such accessaccess, towhether conductactual maliciousor activities. Any such misuse of our platformperceived, could result in negative press coverage and negatively affect our reputation, which could result in harm to our business, reputation, and operating results.

In addition, independent industry and research firms often evaluate our solutions and provide reviews of our platform, as well as the productsthose of our competitors, and perception of our platform in the marketplace may be significantly influenced by these reviews. If these reviews are negative, or less positivefavorable as compared tothan those of our competitors’ products,competitors, our brand may be adversely affected. Our solutions may fail to detect or prevent threats in any particular test for a number of reasons that may or may not be related to the efficacy of our solutions in real world environments. To the extent potential customers, industry analysts or research firms believe that the occurrence of a failure to detect or prevent any particular threat is a flaw or indicates that our solutions or services do not provide significant value, we may lose customers, and our reputation, financial condition and business would be harmed.

Moreover, the performance of our channel partners and alliance partners may affect our brand and reputation, as it could negatively impact our reputation if customers do not have a positive experience with these partners. In addition, we have in the past worked, and continue to work, with high profile customers and have assisted in analyzing and remediating high profile cyberattacks. Our work with such customers has exposed us to publicity and media coverage. Negative publicity about us, including about our management, the efficacy and reliability of our platform, our product offerings, our professional services, and the customers we work with, even if inaccurate, could adversely affect our reputation and brand.

To the extentIf our partners are unsuccessful in selling our platform, or if we are unable to enter into arrangements withestablish and retainmaintain a sufficient number of high-quality partners in each of the regions in which we sellpartnerships, or plan to sell our platform, we are unable to keep them motivated to sell our platform, orif our partners shift focus to other vendors and/or our competitors, our ability to sell our platform and operating results will be harmed. To the extent our partners fail to meet their purchasing commitments, they may fail to pay us or attempt to renegotiate our agreements and we risk churn in forecast metrics. The termination of our relationship with any significant partner may adversely affect our sales and operating results. Our ability to achieve revenue growth in the future will depend in part on our ability to maintain successful relationships with our channel partners and in training our channel partners to independently sell and deploy our platform.

We are also exposed to credit and liquidity risks and our operating results will be harmed if our partners were to become unable or unwilling to pay us at all or in a timely manner, terminate their relationships with us or go out of business. Although we have programs in place that are designed to monitor and mitigate such risks, we cannot guarantee these programs will be effective in reducing our risks.effective. If we are unable to adequately control these risks, our business, operating results, and financial condition would be harmed. If partners fail to pay us under the terms of our agreements or we are otherwise unable to collect on our accounts receivable from these partners, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the terms of our contracts, including litigation. Our partners may seek bankruptcy protection or other similar relief and fail to pay amounts due to us, or pay those amounts more slowly, either of which would adversely affect our business, operating results, and financial condition. We may be further impacted by consolidation of our existing channel partners. In such instances, we may experience changes to our overall business and operational relationships due to dealing with a larger combined entity, and our ability to maintain such relationships on favorable contractual terms may be more limited. We may also become increasingly dependent on a more limited number of channel partners, as consolidation increases the relative proportion of our business for which each channel partner is responsible, which may magnify the risks described in the preceding paragraphs.

•government certification, software supply chain or source code transparency requirements applicable to us or our platform may change and, in doing so, restrict our ability to sell into the government sector until we have attained the revised certification or meet other new requirements. For example, although we are currently FedRAMP authorized, such authorization is costly to maintain and subject to rigorous compliance requirements, and if we lose our authorization, it will restrict our ability to sell to government customers;

Our Singularity Platform is used globally by organizations of all sizes across a broad range of industries. We had 1,667 customers with ARR of $100,000 or more as of January 31, 2026, up from 1,411 customers with ARR of $100,000 or more as of January 31, 2025, up from 1,133 customers with ARR of $100,000 or more as of January 31, 2024.2025. We define ARR as the annualized revenue run rate of our subscription andsubscription, consumption and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. As of January 31, 20252026 and 2024,2025, no single end customer accounted for more than 3% of our ARR. Our revenue outside of the U.S. represented 37%39% and 36%37% for fiscal 20252026 and 2024,2025, respectively, illustrating the global nature of our solutions.

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior. Worsening economic conditions, including inflation, interest rate volatility, slower growth, potential recession, significant political or regulatory developments including changes in tariffs and trade restrictions,policy, fluctuations in foreign exchange rates, actual or perceived instability in the global banking industry, potential uncertainty with respect to the federal debt ceiling and budget, government shutdowns, and other changes in economic conditions, and the impact of natural or man-made global events, including wars and other regional geopolitical armed conflict, such as the conflicts in the Middle East (including, but not limited to, the conflict in Iran) and Ukraine, and tensions between China and Taiwan, may result in decreased sales productivity and growth and adversely affect our results of operations and financial performance. As a result of the current macroeconomic environment, we have recently experienced certain impacts on our business, including a decline in usage and consumption patterns from certain customers, especially larger enterprise customers, longer sales cycles, and deal downsizing by new customers and of renewals by existing customers, especially larger enterprises.

Non-GAAP operating income (loss)

In addition to our results determined in accordance with GAAP, we use non-GAAP operating income (loss) as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that non-GAAP operating income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this measure excludes, among other expenses, expenses that we do not consider to be indicative of our overall operating performance. Non-GAAP operating income (loss) is calculated as GAAP operating loss adjusted to exclude amortization of acquired intangible assets, acquisition-related compensation, stock-based compensation expense, payroll tax on employee stock transactions, and restructuring charges.

Non-GAAP operating income (loss) has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP, including GAAP operating loss. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures, including non-GAAP operating loss,income (loss), differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP operating income (loss) is presented for supplemental informational purposes only.

A reconciliation of non-GAAP operating income (loss) to GAAP operating loss, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, is provided below:

We believe that ARR is a key operating metric to measure our business because it is driven by our ability to acquire new subscriptionsubscription, and consumptionconsumption, and usage-based customers, and to maintain and expand our relationship with existing customers. ARR represents the annualized revenue run rate of our subscription, consumption, and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. ARR is an operational metric and is not a non-GAAP metric. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates, usage, renewal rates, and other contractual terms. For more information on how we recognize revenue, see Note 3, Revenue and Contract Balances to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data.

We believe that our ability to retain and expand our revenue generated from our existing customers is an indicator of the long-term value of our customer relationships and our potential future business opportunities. NRR measures the percentage change in our ARR derived from our customer base at a point in time. ToOur calculateNRR NRR,remained wein firstexpansionary determine Prior Period ARR, which is ARR from the population of our customersterritory as of 12January months31, prior2026, todriven theby endexisting customers adoption of aadditional particularendpoint reportinglicenses period.and adjacent platform solutions. We thensee calculatesignificant Netlong-term Retentionexpansion ARR,potential whichbased representson thehigh totalcustomer ARRretention atrates, theexpanding endproduct ofcategories, aand particularearly-stage reporting periodadoption from theour sameinstalled set of customers that is used to determine Prior Period ARR. Net Retention ARR includes any expansion, and is net of contraction and attrition associated with that set of customers. NRR represents the quotient obtained by dividing Net Retention ARR by Prior Period ARR.base.

Research and development expenses consist primarily of employee salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include third-party cloud infrastructure and general services expenses, such as consulting fees, softwaresoftware, and subscription services, and third-party cloud infrastructure expenses incurred in developing our platform and modules.

We expect sales and marketing expenses to increase in absolute dollars as we continue to makemaking significant investments in our sales and marketing organization to drive additional revenue, further penetrate the market, and expand our global customer base, but to decrease as a percentage of our revenue over time.

General and administrative expenses consist primarily of salaries, benefits, bonuses, stock-based compensation, and other expenses for our executive, finance, legal, people team, IT, and facilities organizations. General and administrative expenses also include external legal, accounting, other consulting, and professional services fees, software and subscription services, and other corporate expenses.

We expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services. We expect that our general and administrative expenses will increase in absolute dollars as our business growsgrows, but willto decrease as a percentage of our revenue over time.

Restructuring charges,charges related to the Plan,restructuring plans executed in June 2023 (June 2023 Plan), March 2025 (March 2025 Plan), and July 2025 (July 2025 Plan) consist primarily of charges related to contract terminations, severance payments, employee benefits, stock-based compensation, and asset impairment charges related to excess facilities. The actionsJune associated2023 withPlan, theMarch 2025 Plan, and July 2025 Plan were completed or substantially completed as of theJanuary end31, of2025, fiscalJuly 2025.31, 2025, and January 31, 2026, respectively.

Interest Income, Interest Expense,Net, and Other Income (Expense), Net

Interest expenseincome, net consists primarily of interest earned on our cash equivalents and investments, offset by interest expense, which consists primarily of the amortization of the discount related to the acquisition-related liabilities.

Provision for (Benefit From) Income Taxes

We expect our provision for income taxes to increase in fiscal year 20262027 and beyond based upon increased foreign earningsearnings, interest expense under the Agreement, and federalcertain minimum taxes.

Additionally, as discussed in more detail in Part I, Item 1A, “Risk Factors” in this Annual Report,Report and Note 12,10, Income Taxes, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, sinceon 2022,January 8, 2026, we haveentered beeninto negotiating a bilateral Advance Pricingthe Agreement (APA) with the U.S. and the Israeli governments,ITA covering various transfer pricing matters for intercompany transactions relating to the intergroup ownership and utilization of our intellectual property. AsThis ofAgreement Januaryfully 31,and 2025,finally resolves all related Israeli disputed income tax matters between us and the APAITA negotiationsfor arefiscal ongoingyears with2021 nothrough finalized2025. resolution.Pursuant Ifto the Agreement, we agree to an APA, we may, as part of that agreement, beare required to make significantinstallment payments through 2030, which are subject to 7.0% interest per annum and certain acceleration clauses. The Agreement also resolved the Israelitax government.impact of aligning the intellectual property of Prompt into our structure.

Cost of revenue increased by $31.8$48.1 million from $179.3 million for fiscal 2024 to $211.1 million for fiscal 2025,2025 to $259.2 million for fiscal 2026, primarily due to an increase of $17.3 million in customer support costs which were primarily personnel-related expenses, a $9.6$23.5 million increase in cloud hosting usage charges to support our expanding business, anda $11.7 million increase in customer support costs which were mostly personnel-related expenses, a $5.2$6.9 million increase in amortization of capitalized internal-use software due to the continued investment in our platform.platform, and a $6.2 million increase in amortization of acquired intangible assets in connection with fiscal 2026 acquisitions. Gross margin increased from 71% for fiscal 2024 towas 74% for fiscal 2025,2025 primarilyflat duecompared to revenuefiscal growth from existing and new customers outpacing growth in cost of revenue.2026.

Research and development expenses increased from $218.2 million in fiscal 2024 to $267.0 million in fiscal 2025,2025 to $323.9 million in fiscal 2026, primarily due to an increase in personnel-related expenses of $36.7$37.7 million, including an increase of $22.9$10.6 million related to stock-based compensation expense as a result of increased headcount, a $9.2 million increase in allocated overhead costs, and an increase of $3.6$7.8 million in cloud hosting expenses driven by expanded research and development activities.activities, a $5.4 million increase in general services expenses, and a $5.1 million increase in allocated overhead costs.

Sales and marketing expenses increased from $397.2 million in fiscal 2024 to $487.2 million in fiscal 2025,2025 to $525.2 million in fiscal 2026, primarily due to an increase in personnel-related expenses of $62.6$42.3 million, including an increase of $24.7$13.1 million in stock-based compensation expenseexpense, primarily due to restricted shares awards granted in connection with acquisitions, as awell result of increased headcount and accelerated stock-based compensation expenses. In addition, there wasas an increase in marketing-related expenses of $17.9 million, and a $5.9 million increase in sales-related expenses of $2.0 million, primarily attributable to external commissions. The increase was partially offset by a decrease in $7.0 million in marketing-related expenses, largely due to overalllower business growthbranding and further investment in marketing activities.costs.

General and administrative expenses decreasedincreased from $198.2 million in fiscal 2024 to $185.5 million in fiscal 2025,2025 to $202.1 million in fiscal 2026, primarily due to aan $6.4 million decreaseincrease in overheadpersonnel-related expenses dueof to$13.3 highermillion, overheadincluding costan being allocated out, a decreaseincrease of $4.2$7.6 million in legalstock-based expensescompensation expense as a result of increased headcount, and aan decreaseincrease inof $2.7$5.0 million in litigation expenses due to lower legal consulting fees and lowerprofessional settlementservices charges during fiscal 2025.expense.

Restructuring charges decreasedincreased by $6.7$12.3 million due to activities undertaken pursuant to the March 2025 Plan announcedand inJuly June2025 2023.Plan Thefor decreasefiscal 2026. This primarily included severance and employee benefit charges of $5.4$6.7 million, $3.9 million in contract termination charges, and asset impairment charges related to excess facilities of $2.4$2.2 million incurred during fiscal 2024, partially offset by stock-based compensation savings of $1.1 million due to decreased headcount.million.

Interest Income, Interest Expense,Net, and Other Income (Expense), Net

Interest income increaseddecreased $4.2$7.2 million asprimarily adriven resultby of higherlower income earned from investments in marketable securities in fiscal 2025 primarily due to a higher investment balance and increased yield. Interest expense decreased primarily due to a reduction in the amortization of the discount related to acquisition-related liabilities.2026. The change in other income (expense), net is primarily due to a decrease in net gainsforeign oncurrency strategicexchange investments.fluctuations.

We have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers, and we have generated operating losses, as reflected in our accumulated deficit of $1.6$2.1 billion and $1.3$1.6 billion as of January 31, 20252026 and 2024,2025, respectively. We expect these and other operating losses to continue for the foreseeable future. We also expect to incur significant research and development, sales and marketing, and general and administrative expenses over the next several years in connection with the continued development and expansion of our business. Additionally,On ifJanuary 8, 2026, we agreeentered into an Assessment Agreement with the ITA that fully and finally resolves disputed tax matters regarding intercompany transfer pricing and intellectual property valuations for fiscal years 2021 through 2025. As more fully described in the section titled “Risk Factors—Our corporate structure and intercompany arrangements are subject to anthe APA,tax laws of various jurisdictions, and we may,could asbe partobligated to pay additional taxes, which would harm our operating results and financial condition,” we recorded a total tax expense of that$180.9 agreement,million, beinclusive of interest, in fiscal 2026 related to the Assessment Agreement with the ITA, which includes the sale of our acquired Prompt intangibles to the U.S. Pursuant to the Agreement, we are required to make significantinstallment payments in Israeli New Shekels through fiscal 2031, with unpaid amounts subject to a 7.0% annual interest rate, and an option to extend the Israelifinal governmentpayment whichthrough may2033. These payments will adversely affect our cash flows over the next several years. AsFurthermore, in the event of a change in control, all unpaid amounts plus interest that would have accrued through 2033—$255.1 million (or 792.7 million Israeli New Shekels) as of January 31, 20252026, less cumulative payments made—would accelerate and 2024,become ourimmediately principal source of liquidity was cash, cash equivalents, and investments of $1.1 billion and $1.1 billion, respectively.due.

In the short term, we believe that our existing cash, cash equivalents, and investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We believe our available liquidity, together with expected cash flows from operations, will be sufficient to fund these requirements in addition to our other operating needs over the next 12 months. In the long term beyond the next 12 months, our future capital requirements will depend on many factors, including macroeconomic conditions, our revenue growth rate, 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 research and development efforts, the price at which we are able to purchase third-party cloud infrastructure, expenses associated with our international expansion, the introduction of platform enhancements, and the continuing market adoption of our platform. We have, and in the future, we may 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, operating results, and financial condition.

Historically, we have generated negative operating cash flow, but insince fiscal 2025, we have achieved positive operating cash flow, primarily due to higher customer collections, partially offset by increased cash payments for cost of revenue and operating expenses.

Our operating cash flow is influenced by seasonal billing patterns, with a concentration of annual billings in our fiscal fourth quarter due to enterprise buying and renewal cycles. This makes our fiscal first quarter our strongest for collections and operating cash flow. Acquisitions can also impact cash flow due to transaction costs, financing expenses, and lower initialnear-term operating cash flow contributions from acquired entities.

Cash providedused byin financing activities during fiscal 20242026 was $47.5$160.8 million, consisting of $28.3$200.0 million ofin proceeds from the exerciserepurchases of employeecommon stockstock, optionspartially andoffset $19.1by $21.2 million of proceeds from the issuance of common stock under our 2021 Employee Stock Purchase Plan.Plan (ESPP), and $18.0 million of proceeds from the exercise of employee stock options.

•A security incident againstimpacting us or our third-party vendors and service providers, whether actual, alleged, or perceived, wouldcould harm our reputation, create liability, and regulatory exposure, and adversely affect our business, operating results, and financial condition.

We have incurred net losses in all periods since our inception, and we may not achieve or maintain profitability in the future. We experienced a net loss of $76.2$93.4 million and $208.2$72.0 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively. As of AprilJuly 30,31, 2026, we had an accumulated deficit of $2.2 billion. While we have historically experienced significant growth in revenue, we cannot predict when or whether we will reach or maintain profitability. We also expect our operating expenses to increase in the future as we continue to invest in our future growth, including expanding our research and development function to drive further development of our platform, expanding our sales and marketing activities, and expanding into adjacent markets and geographic locations, which could negatively affect our operating results if our total revenue does not increase. In addition to the anticipated costs to grow our business, we have incurred and expect to continue to incur significant legal, accounting, and other expenses as a public company. Our revenue growth is expected to slow down as we scale and our revenue may decline for a number of other reasons, including reduced demand for our platform, increased competition, a decrease in the growth or reduction in the size of our overall market, or if we cannot capitalize on growth opportunities, including acquisitions, new products, services, and feature releases. While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, including personnel restructuring plans, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities. If we fail to increase our revenue to offset increases in our operating expenses, or manage our costs as we invest in our business, we may not achieve or sustain profitability.

•any disruption in our relationship with ISVs, alliance partners, or channel partners, including MSPs, MSSPs, MDRs, OEMs, and IR firms;

Our business depends on the overall demand for information technology and on the economic health of our current and prospective customers. In addition, the purchase of our platform is often discretionary and may involve a significant commitment of capital and other resources. Weak global and regional economic conditions, including the changes in U.S. federal spending, significant political or regulatory developments including changes in trade policy (including actual or threatened changes in tariffs and trade restrictions), U.S. and global macroeconomic issues, actual or perceived global banking and finance related issues, labor shortages, supply chain disruptions, fluctuating interest rates and inflation, spending environments, geopolitical instability, warfare and uncertainty, weak economic conditions in certain regions or a reduction in information technology spending regardless of macroeconomic conditions, including the effects of the conflicts in the Middle East and Ukraine, and tensions between China and Taiwan, could adversely affect our business, operating results, and financial condition, including resulting in longer sales cycles, a negative impact on our ability to attract and retain new customers or expand our platform or sell additional products and services to our existing customers, lower prices for our platform, higher default rates among our channel partners, reduced sales to new or existing customers and slower or declining growth. For example, as a result of current uncertainty in macroeconomic conditions and related higher cost consciousness around IT budgets, we have continued to experience certain impacts on our business, including a decline in usage and consumption patterns from certain customers, especially larger enterprise customers, longer sales cycles, and deal downsizing by new customers and of renewals by existing customers, especially larger enterprises. We expect the global macroeconomic conditions impacting demand to persist in the near term. Deterioration in economic conditions in any of the countries in which we do business could also cause slower or impaired collections on accounts receivable, which may adversely impact our liquidity and financial condition.

A security incident againstimpacting us, or our third-party vendors and service providers, whether actual, alleged, or perceived, wouldcould harm our reputation, create liability and regulatory exposure, and adversely impact our business, operating results, and financial condition.

Although we have implemented security measures designed to prevent such attacks, our networks and systems, and those of our third-party vendors and service providers have in the past, and may bein the future be, breached due to the actions of outside parties, human error, insufficient cybersecurity controls, malfeasance, a combination of these, or otherwise, and as a result, an unauthorized party may obtain access to our and/or our customers’ systems, networks, or data. We and our third-party vendors and service providers may face difficulties or delays in identifying or otherwise responding to any attacks or actual or potential security breaches or threats. More capable general-purpose AI models released by major providers that are or may soon become widely accessible to developers and end users have amplified, and will continue to amplify, the capabilities of threat actors, enabling more targeted and convincing phishing and social engineering campaigns, automated identification and exploitation of software vulnerabilities, the generation of novel malware and attack vectors, prompt injection attacks, automated reconnaissance, and the ability to conduct attacks at greater speed and scale than previously possible. These AI-enhanced threats may be more difficult to detect using traditional security measures and may require us to research and invest in additional defensive capabilities. These risks are exacerbated by developments in generative AI. A breach in our or in our third-party vendors and service providers’ data security or an attack against our platform or our third-party vendors’ or service providers’ platform could impact our networks or the networks and data of our customers that are secured by our platform, creating system disruptions or slowdowns and providing access to malicious parties to information stored on our networks or the networks of our customers, resulting in data being publicly disclosed, misused, altered, lost, or stolen, which could subject us to liability and adversely affect our financial condition. If compromised, our own systems or the systems of our third-party vendors and service providers could be used to facilitate or magnify an attack. Further, the trend towards remote and hybrid work by companies and individuals has generally increased the attack surface available to bad actors for exploitation, and as such, the risk of a cybersecurity incident potentially occurring has increased. We have accordingly increased our investments in protective measures and risk mitigation strategies, but we cannot guarantee that our efforts, or the efforts of our third-party vendors and service providers or efforts of others upon whom we rely and partner with, will be successful in preventing any such information security incidents. Protecting our own assets has become more expensive from a dollar investment and time perspective and these costs may increase as the threat landscape evolves, including as a result of the use of AI by bad actors.

In addition, because the techniques used by computer hackers to access or sabotage target computing environments change frequently and generally are not recognized until launched against a target, there is a risk that an advanced attack could emerge that our platform is unable to detect or prevent. Furthermore, as a well-known provider of security solutions and because security solutions are highly privileged in customerscustomers’ environments, our networks, platform, products, including cloud-based technology, and customers could be targeted by attacks specifically designed to disrupt our business, harm our reputation or use our technology to gain unauthorized access. In addition, defects or errors in our platform could result in a failure to effectively update customers’ cloud-based products. Our data centers and networks may experience technical failures and downtime, may fail to distribute appropriate updates, or may fail to meet the increased requirements of a growing customer base, any of which could temporarily or permanently expose our customers’ computing environments, leaving their computing environments unprotected against cyber threats. Any of these situations could result in negative publicity to us, damage our reputation, and increase expenses and customer relations issues, which would adversely affect our business, financial condition, and operating results.

As part of our business strategy, we have in the past and expect to continue to make investments in and/or acquire complementary companies, services, products, technologies, or talent. For example, in February 2024 we acquired both PingSafe, a cloud security platform, and Stride, a security automation company, and in September 2025, we acquired Prompt, a private company focused on the generative and agentic AI security space, and Observo, an AI-ready data pipeline company, and in March 2026, we made a strategic investment in Knight JV, LLC. We have also invested in certain privately held companies through our S Ventures fund, which may not generate returns and are subject to a risk of partial or total loss of investment capital. Our ability as an organization to acquire and integrate other companies, services or technologies in a successful manner is not guaranteed.

We may not be able to find suitable acquisition candidates, or complete acquisitions on favorable terms, if at all. Our due diligence efforts may fail to identify all of the material risks, liabilities or other challenges involved in an acquisition.acquisition or strategic investment. Even if completed, acquisitions or investments may not strengthen our competitive position, may not achieve expected benefits, and may be viewed negatively by our customers or investors.

Substantially all of our sales are fulfilled through our channel partners, including resellers, distributors, MSPs, MSSPs, MDRs, OEMs, and IR firms, and we expect that we will continue to generate a significant portion of our revenue from channel partners for the foreseeable future. Our agreements with our channel partners generally are non-exclusive, do not last for set terms, and may be terminated by either party at any time. Further, the majority of channel partners fulfill our sales on a purchase order basis and do not impose minimum purchase requirements or related terms on sales. WeHowever, alsoin recent periods, we have with increasing frequency entered into, or expanded, relationships with several large MSSP, OEM and reseller partnerships withthat have multi-year purchasing commitments. Additionally, we have entered, and intend to continue to enter, into alliance partnerships with third parties to support our future growth plans. The loss of a substantial number of our channel partners or alliance partners, the failure to recruit additional partners, or failure of partners to meet their purchasing commitments would adversely affect our business, operating results, key financial metrics and financial condition.

We have experienced rapid growth in recent periods, and we expect to continue to invest broadly across our organization to support our growth. For example, our headcount grew from over 2,700 employees as of AprilJuly 30,31, 2025, to over 3,0002,800 employees as of AprilJuly 30,31, 2026. Although we have experienced rapid growth historically, we may not sustain our growth rates, nor can we assure you that our investments to support our growth will be successful. The growth and expansion of our business will require us to invest significant financial and operational resources and the continuous dedication of our management team.

In addition, as we have grown, our number of customers has also increased significantly, and we have increasingly managed more complex deployments of our platform in more complex computing environments. The rapid growth and expansion of our business places a significant strain on our management, operational, and financial resources. To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative systems and controls, and our ability to manage headcount, capital, and processes in an efficient manner. As a result of macroeconomic conditions, in JuneMarch 2023,2025, July 2025 and MarchMay and July 2025,2026, we approved restructuring plans designed to improve operational efficiencies and operating costs, and better align our workforce and operations with current business needs, priorities, and near term growth expectations.

In addition, job candidates and existing employees often consider the value of the equity awards and other compensation they receive in connection with their employment. If the perceived value of our compensatory package declines, it may adversely affect our ability to attract and retain highly skilled employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be severely harmed. Further, our competitors may be successful in recruiting and hiring members of our management team or other key employees, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all. In recent years, the increased availability of hybrid or remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates. Although we have entered into employment agreements with our key employees, these agreements are on an “at-will” basis, meaning they are able to terminate their employment with us at any time. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be severely harmed.

In the U.S., there are numerous federal and state consumer, privacy, and data security laws and regulations governing the collection, use, disclosure, and protection of personal data, including security breach notification laws and consumer protection laws. Each of these laws is subject to varying interpretations and constantly evolving. For example, in California, the California Consumer Privacy Act of 2018 (as amended, “CCPA”) imposes significant obligations on covered businesses, including providing privacy rights to California residents such as the right to opt out of certain disclosures of their personal information and receive detailed information about how their personal information is collected, used and shared. Regulations effective January 1, 2026 expanded these obligations to require covered businesses to conduct privacy risk assessments before initiating certain categories of processing that present significant risk to consumer privacy, including the use of automated decision-making technology for significant decisions and the processing of sensitive personal information. Those same regulations also established mandatory independent cybersecurity audits for businesses meeting specified revenue and data-volume thresholds. Following California’s lead, approximately 20 other U.S. states have enacted privacy laws with Indiana, Kentucky, and Rhode Island among those taking effect in 2026. These state laws impose varying requirements regarding consumer rights, data minimization, automated decision-making, and security obligations, and several existing laws were further amended in 2026 to expand their scope and strengthen enforcement. In addition, various comprehensive federal privacy bills have been proposed in Congress from time to time. Compliance with this expanding and increasingly complex patchwork of state and federal requirements is costly and creates operational complexity.

While we strive to publish and prominently display privacy policies that are accurate, comprehensive, and compliant with applicable laws, rulesrules, regulations and industry standards, we cannot ensure that our privacy policies and other statements regarding our practices will be sufficient. If such public statements are alleged to be deceptive, unfair or misrepresentative of our actual practices, we may be subject to potential government or legal investigation or action, including by the FTC or applicable state attorneys general.

Further, for our 2022 to 2024 tax years, the Tax Cuts and Jobs Act of 2017 required research and experimental (R&E) expenditures to be capitalized and amortized ratably over a five-year period for domestic expenditures. Any such expenditures attributable to research conducted outside the United States were required to be capitalized and amortized over a 15-year period. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (the OBBBA), restoring immediate deductibility of domestic R&E expenditures beginning with our 2025 tax year, while foreign R&E expenditures will continue to be capitalized and amortized over a 15-year period. The OBBBA introduced other provisions, such as the permanent extension and modification of certain provisions of the Tax Cuts and Jobs Act of 2017, changes to bonus depreciation rules, and adjustments to interest expense limitations. The OBBBA didhas not havehad a material effect on our condensed consolidated financial statements forthrough theJuly three months ended April 30,31, 2026.

In addition, the Organization for Economic Cooperation and Development (OECD) Inclusive Framework of over 140 jurisdictions have joined a two-pillar plan to reform international taxation rules. The first pillar is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence and is intended to apply to multinational enterprises with global turnover above €20 billion. The second pillar (Pillar Two) is focused on developing a global minimum tax rate of at least 15% applicable to in-scope multinational enterprises and is intended to apply to multinational enterprises with annual consolidated group revenue in excess of €750 million. The rules were effective for us beginning in fiscal 2025 but arehave not expectedhad toa bematerial applicableimpact untilon fiscalour 2027.condensed consolidated financial statements. Numerous countries have enacted or substantially enacted legislation to implement these rules. In January 2026, the OECD issued additional guidance regarding a side-by-side agreement, which is intended to provide relief for U.S.-parented multinational corporations from certain provisions of Pillar Two, but will require adoption by OECD member countries to implement. While Pillar Two did not have an impact on our tax provision or effective tax rate in the first quarterhalf of fiscal 2027, we continue to monitor Pillar Two and other evolving tax legislation in the jurisdictions in which we operate.

It is not uncommon for tax authorities in different countries to have conflicting views, for instance, with respect to, among other things, the manner in which the arm’s length standard is applied for transfer pricing purposes, the transfer pricing and charges for intercompany services and other intercompany transactions, or with respect to the valuation of our intellectual property for tax purposes and the manner in which our intellectual property is owned and utilized within our group. On January 8, 2026, we entered into the Agreement with the ITA covering various transfer pricing matters for intercompany transactions between us and our Israeli subsidiary, including the valuation and taxation of intellectual property. The Agreement fully and finally resolves all related Israeli disputed income tax matters between us, our affiliates, and the ITA for the fiscal years ended January 31, 2021 through January 31, 2025. This settlement with the ITA includes certain principles established in the bilateral Advanced Pricing Agreement (APA) process between us, the Internal Revenue Service, and the ITA, which we have been negotiating since fiscal year 2022, and provides a final tax determination on this matter for Israeli tax purposes. As a result of this final resolution and the related reassessment of our uncertain tax positions, through AprilJuly 30,31, 2026, we recorded a total tax expense of $183.5$186.3 million, inclusive of interest, related to this matter. Under the terms of the Agreement, we are required to make installment payments through fiscal 2031 and the unpaid balance is subject to a 7.0% annual interest rate. Additionally, in the event of a change in control, all unpaid amounts plus interest—$267.1$259.7 million (792.7 million Israeli New Shekels), less cumulative payments made—would accelerate and become immediately due. For more information, see Note 9, Income Taxes, to our condensed consolidated financial statements.

Our operating expenses incurred outside the U.S. and denominated in foreign currencies are increasing and are subject to fluctuations due to changes in foreign currency exchange rates. These expenses are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. Other than entering into foreign currency forward contracts to economically manage the foreign currency exchange rate risk associated with the ITA liability denominated in the Israeli New Shekel, we do not currently hedge against the risks associated with currency fluctuations, but may do so, or use other derivative instruments, in the future.

We may also issue our shares of our capital stock or securities convertible into shares of our capital stock from time to time in connection with a financing, an acquisition, an investment, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our Class A common stock to decline.

The dual class structure of our common stock has had the effect of concentrating voting control with the holders of our Class B common stock who held, in the aggregate, approximately 27%26% of the voting power of our capital stock as of AprilJuly 30,31, 2026, which makes it more difficult for you to influence corporate matters, including the election of directors and the approval of any change of control transaction.

Our Class B common stock has 20 votes per share, and our Class A common stock has one vote per share. As of AprilJuly 30,31, 2026, the holders of our outstanding Class B common stock held approximately 27%26% of the voting power of our outstanding capital stock. The outstanding Class B common stock automatically converts to Class A common stock on the earlier of (i) the date specified by a vote of the holders of 66 2/3% of the then outstanding shares of Class B common stock, (ii) seven years from the date of our prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act (the Final Prospectus), or June 29, 2028, (iii) the first date following the completion of our IPO on which the number of shares of outstanding Class B common stock (including shares of Class B common stock subject to outstanding stock options) held by Tomer Weingarten, including certain permitted entities that Mr. Weingarten controls, is less than 25% of the number of shares of outstanding Class B common stock (including shares of Class B common stock subject to outstanding stock options) that Mr. Weingarten originally held as of the date of our Final Prospectus, (iv) the date fixed by our board of directors, following the first date following the completion of our IPO when Mr. Weingarten is no longer providing services to us as an officer, employee, consultant or member of our board of directors, (v) the date fixed by our board of directors following the date on which, if applicable, Mr. Weingarten is terminated for cause, as defined in our restated certificate of incorporation, and (vi) the date that is 12 months after the death or disability, as defined in our restated certificate of incorporation, of Mr. Weingarten. The dual class structure of our common stock will make it difficult for you to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.

Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global economy, and thus could have an adverse effect on us. Our business operations are also subject to interruption by fire, power shortages, flooding, and other events beyond our control. In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause our operating results to suffer. Further, acts of war, armed conflict, terrorism and other geopolitical unrest, such as the conflicts in the Middle East and Ukraine, and tensions between China and Taiwan, could cause disruptions in our business or the businesses of our partners or the economy as a whole. We maintain an office in Tel Aviv, Israel and had approximately 11% of our personnel in Israel as of AprilJuly 30,31, 2026. We are closely monitoring the continued armed conflict in Israel. While this conflict is still evolving, to date, the conflict has not had an adverse impact on our businessbusiness, results of operations and we have implemented continuity measures to address the safety of our employees and continue our operations in the event of reduced employee availability in the conflict region. However, if our continuity measures fail or the conflict continues to worsen or intensify, any business interruptions or spillover effects could adversely affect our business and operations.

Provisions in our restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a merger, acquisition or other change of control of the company that the stockholders may consider favorable. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, our restated certificate of incorporation and amended and restated bylaws include provisions that:

Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. These provisions may limit a stockholders’ ability to bring a claim in a judicial forum of their choosing for disputes with us or our directors, officers, or employees, which may discourage lawsuits against us and our directors, officers, and employees. Alternatively, if a court were to find the choice of forum provision contained in our restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results.

Our Singularity Platform is used globally by organizations of all sizes across a broad range of industries. We had 1,7021,715 customers with annualized recurring revenue (ARR) of $100,000 or more as of AprilJuly 30,31, 2026, up from 1,4591,513 as of AprilJuly 30,31, 2025. We define ARR as the annualized revenue run rate of our subscription, consumption and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. As of AprilJuly 30,31, 2026, no single end customer accounted for more than 5%9% of our ARR. Our revenue outside of the U.S. represented 39% and 38% for the three months ended AprilJuly 30,31, 2026 and 2025, respectively, and 39% and 38% for the six months ended July 31, 2026 and 2025, respectively, illustrating the global nature of our solutions.

We have grown rapidly since our inception. Our revenue was $276.7$292.0 million and $229.0$242.2 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively, representing year-over-year growth of 21%. Our revenue was $568.6 million and $471.2 million for the six months ended July 31, 2026 and 2025, respectively, representing year-over-year growth of 21%. During this period, we continued to invest in growing our business to capitalize on our market opportunity. As a result, our net loss for the three months ended AprilJuly 30,31, 2026 and 2025 was $76.2$93.4 million and $208.2$72.0 million, respectively, and our net loss for the six months ended July 31, 2026 and 2025 was $169.6 million and $280.2 million, respectively.

Non-GAAP operating income (loss)

In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), we use non-GAAP operating income (loss) as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that non-GAAP operating income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this measure excludes, among other expenses, expenses that we do not consider to be indicative of our overall operating performance. Non-GAAP operating income (loss) is calculated as GAAP operating loss adjusted to exclude amortization of acquired intangible assets, acquisition-related compensation, stock-based compensation expense, payroll tax on employee stock transactions, and restructuring charges.

Non-GAAP operating income (loss) has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP, including GAAP operating loss. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures, including non-GAAP operating income (loss),income, differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP operating income (loss) is presented for supplemental informational purposes only.

A reconciliation of non-GAAP operating income (loss) to GAAP operating loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below:

ARR grew 23%22% year-over-year to $1,162.6$1,218.1 million as of AprilJuly 30,31, 2026, primarily driven by a combination of new customer additions and adoption of adjacent platform solutions by existing customers.

Customers with ARR of $100,000 or more grew 17%13% year-over-year to 1,7021,715 as of AprilJuly 30,31, 2026, primarily due to the growth in the ARR of existing customers from additional purchases and the growth in the average size of purchases by new customers.

Dollar-Based Net Retention Rate (NRR)

We believe that our ability to retain and expand our revenue generated from our existing customers is an indicator of the long-term value of our customer relationships and our potential future business opportunities. NRR measures the percentage change in our ARR derived from our customer base at a point in time. Our NRR remained in expansionary territory as of AprilJuly 30,31, 2026, driven by existing customerscustomers’ adoption of additional endpoint licenses and adjacent platform solutions. We see significant long-term expansion potential based on high customer retention rates, expanding product categories, and early-stage adoption from our installed base.

Our operating expenses consist of research and development, sales and marketing, general and administrativeadministrative, and restructuring expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and sales commissions. Operating expenses also include allocated facilities and IT overhead costs.

Research and development expenses consist primarily of employee salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include third-party cloud infrastructure and general services expenses, such as consulting fees, software,fees and software subscription services, incurred in developing our platform and modules.

Sales and marketing expenses consist primarily of employee salaries, commissions, benefits, bonuses, stock-based compensation, travel and entertainment relatedentertainment-related expenses, advertising, branding and marketing events, promotions, amortization of acquired customer relationships, and software and subscription services. Sales and marketing expenses also include sales commissions paid to our sales force and referral fees paid to independent third parties that are incremental to obtain a subscription contract. Such costs are capitalized and amortized over an estimated period of benefit of four years, and any such expenses paid for the renewal of a subscription are capitalized and amortized over the average contractual term of the renewal.

Restructuring charges related to the restructuring plans executed in May 2026 (May 2026 Plan), July 2025 (July 2025 Plan) and March 2025 (March 2025 Plan), consist primarily of charges related to severance payments, employee benefits, stock-based compensation, contract terminations, and asset impairment charges related to facilities. The actionsMarch associated2025 withPlan theand MarchJuly 2025 Plan were completed as of July 31, 2025.2025 and January 31, 2026, respectively. The actions associated with the May 2026 Plan are expected to be fully completed by the end of fiscal 2027.

Interest Income, Net, and Other Income,Income (Expense), Net

Other income,income (expense), net consists primarily of gains and losses on foreign currency remeasurements and transactions, derivative instruments, and strategic investments.

Provision for income taxes consists primarily of income taxes in foreign jurisdictions in which we conduct businessbusiness, and the tax effects (including the interest expense) of the fiscal 2026 Assessment Agreement (the Agreement) with the ITA.Israeli Tax Authority (ITA). The Agreement resulted in $180.0 million of tax expense, exclusive of interest, during fiscal 2026, payable over time to the ITA, with additional interest expense accruing on the tax liability over the installment period. In connection with our global consolidated losses, we maintain a full valuation allowance against our U.S. deferred tax assets, as we have concluded that it is more likely than not that the deferred tax assets will not be realized.

Exclusive of the fiscal 2026 assessment agreement (the Agreement) with the Israeli Tax Authority (ITA),ITA, we expect our provision for income taxes to increase in fiscal 2027 and beyond based upon increased foreign earnings and certain minimum taxes.

Comparison of the Three Months Ended AprilJuly 30,31, 2026 and 2025

Cost of revenue increased by $21.4$21.1 million primarily due to a $9.1 million increase in cloud hosting usage charges to support our expanding business, a $6.3$6.0 million increase in customer support costscosts, which were mostly personnel-related expenses,personnel-related, a $3.9$4.0 million increase in amortization of acquired intangible assets in connection with the fiscal 2026 acquisitions, and a $1.7$1.4 million increase in amortization of capitalized internal-use software due to the continued investment in our platform. Gross margin was 72% compared to 75% in the prior period, primarily due to higher costs of revenue associated with scaling operations to meet increased customer demand and sales volume.

Research and development expenses increased by $23.5$17.8 million primarily due to an increase in personnel-related expenses of $19.4$10.7 million as a result of increased headcount. This included ana $8.0$4.1 million increase in stock-based compensation expense, primarily driven by the new equity awards granted, including those issued in connection with the fiscal 2026 acquisitions. The remaining increase was attributable to ana $2.9 million increase of $1.9 million in cloud hosting expenses driven by expanded research and development activities, and a $1.6$2.2 million increase in general services expenses primarily driven by higher software subscription costs, and a $2.0 million increase in allocated overhead costs.

Sales and marketing expenses decreased by $1.8$4.3 million primarily due to a $4.3$5.4 million decrease in marketing-related expenses, reflecting lower corporate marketing, advertising,advertising and brandingpromotion costs. The decrease was partially offset by a $1.2$0.9 million increase in sales-relatedallocated expensesoverhead driven by higher sales conference and partner commission costs, and a $1.1 million increase in acquisition-related compensation expense.costs.

General and administrative expenses increased by $1.8$4.9 million primarily due to an increase in personnel-related expenses of $4.7 million as a $1.3result of increased headcount. This included a $2.4 million increase in acquisition-relatedstock-based transactioncompensation expensesexpense, andprimarily driven by the new equity awards granted. The remaining increase was attributable to a $1.0$3.2 million increase in salarieslegal and wages reflecting increased headcount,expenses, partially offset by a $0.9$1.9 million decrease in consulting expenses and a $1.2 million decrease in acquisition-related expenses.

Interest Income, Net, and Other Income,Income (Expense), Net

Interest income, net decreased $5.5by $6.0 million primarily driven by lower incomeaverage earnedinvestment frombalances investmentsand ina lower weighted-average book yield on our marketable securities during the three months ended AprilJuly 30,31, 2026. The change in other income,income (expense), net iswas primarily due to a gain on strategic investment, partially offset by net foreign currency exchange fluctuations.fluctuations and net losses on strategic investments.

The provision for income taxes decreasedincreased by $127.7$3.1 millionmillion, primarily due to the non-recurrence of a $136.0 million accrual for an unrecognized tax benefit recorded in the prior year in connection with our matter with the ITA. This decrease was partially offset by the non-recurrence of a $4.7 million discrete tax benefit from the release of a valuation allowance on Israeli deferred tax assets recorded in the prior year, as well as $2.6$2.8 million of interest expense recognized in the current period on the ITA liability pursuant to the final settlement agreement reached in fiscal 2026.

We compute our tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from recurringcontinuing operations and adjusting for discrete items arising in those periods.

We have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers, and we have generated operating losses, as reflected in our accumulated deficit of $2.2 billion and $2.1 billion as of AprilJuly 30,31, 2026 and January 31, 2026, respectively. We expect these and other operating losses to continue for the foreseeable future. We also expect to incur significant research and development, sales and marketing, and general and administrative expenses over the next several years in connection with the continued development and expansion of our business. On January 8, 2026, we entered into the Agreement with the ITA that fully and finally resolves disputed tax matters regarding intercompany transfer pricing and intellectual property valuations for fiscal years 2021 through 2025. As more fully described in the section titled “Risk Factors—Our corporate structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our operating results and financial condition,” through AprilJuly 30,31, 2026, we recorded a total tax expense of $183.5$186.3 million, inclusive of interest, related to the Agreement with the ITA. Pursuant to the Agreement, we are required to make installment payments in Israeli New Shekels through fiscal 2031, with unpaid amounts subject to a 7.0% annual interest rate, and an option to extend the final payment through 2033. These payments will adversely affect our cash flows over the next several years. Furthermore, in the event of a change in control, all unpaid amounts plus interest that would have accrued through 2033—$267.1$259.7 million (or 792.7 million Israeli New Shekels) as of AprilJuly 30,31, 2026, less cumulative payments made—would accelerate and become immediately due.

As of AprilJuly 30,31, 2026 and January 31, 2026, our principal source of liquidity was cash, cash equivalents, and investments of $812.5$813.2 million and $769.6 million, respectively.

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses, third-party cloud infrastructure expenses, and overhead expenses.costs.

Our operating cash flow is influenced by seasonal billing patterns, with a concentration of annual billings in our fiscal fourth quarter due to enterprise buying and renewal cycles. This makes our fiscal first quarter our strongest quarter for collections and operating cash flow. Acquisitions can also impact cash flow due to transaction costs, financing expenses, and lower near-term operating cash flow contributions from acquired entities.

Cash provided by operating activities during the threesix months ended AprilJuly 30,31, 2026 was $38.5$31.9 million, primarily consisting of $243.2 million of adjustments for non-cash items of $113.5 million, and $1.2 million provided by net changes to our operating assets and liabilities,items, partially offset by our net loss of $76.2$169.6 million.million and $41.6 million of cash used by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $108.2 million decrease in accounts receivable, partially offset by a $46.9$55.5 million decrease in deferred revenue, a $34.1$39.1 million increase in deferred contract acquisition costs, and a $16.9 million decrease in accrued expenses and other liabilities,liabilities. primarilyThese relatingamounts towere thepartially installmentoffset payment of the ITA liabilities,by a $15.6$68.8 million decrease in accounts receivable and a $6.4 million increase in deferred contract acquisition costs, a $4.3 million decrease in accrued payroll and benefits, a $2.6 million increase in prepaid expenses and other assets, a $2.3 million decrease in accounts payable due to timing of invoices received from vendors, and a $1.3 million decrease in operating lease liabilities.benefits.

Cash provided by operating activities during the threesix months ended AprilJuly 30,31, 2025 was $52.3$51.2 million, primarily consisting of $161.3adjustments for non-cash items of $202.9 million, and $128.6 million provided by net changes to our operating assets and liabilities and adjustments for non-cash items of $99.1 million,liabilities, partially offset by our net loss of $208.2$280.2 million. The main drivers of the changes in operating assets and liabilities were an increase ofin accrued liabilities and other liabilities of $130.7$144.0 million, of which $136.0 million is related to an accrual for an unrecognized tax benefit related to our ITA matter, a $80.6$56.4 million decrease in accounts receivable, a $3.2 million decrease in prepaid expenses and other assets, and a $13.4$1.5 million increase in accounts payable due to timing of invoices received from vendors. These amounts were partially offset by a $26.8$36.1 million increase in deferred contract acquisition costs, a $25.3 million decrease in deferred revenue, a $16.4$13.1 million decrease in accrued payroll and benefits, a $14.7 million increase in deferred contract acquisition costs, and a $4.2$2.1 million increasedecrease in prepaidoperating expenseslease and other assets.liabilities.

Cash used in investing activities during the threesix months ended AprilJuly 30,31, 2026 was $63.9$24.0 million, primarily consisting of $212.0$260.4 million of investment purchases, which included a $100.0 million strategic investment in Knight JV, LLC, $7.4$14.0 million of capitalized internal-use software costs, and $1.0 million of payments related to holdback releases in connection with our fiscal 2026 acquisitions. These amounts were partially offset by $156.9$252.0 million of proceeds from sales and maturities of investments.

Cash usedprovided inby investing activities during the threesix months ended AprilJuly 30,31, 2025 was $65.6 million, primarily consisting of $167.3$286.8 million of investmentproceeds purchases,from sales, maturities and $6.7 millionreturn of capitalizedcapital internal-useof software costs.investments. These amounts were partially offset by $108.5$208.1 million of investment salespurchases, and maturities.$12.5 million of capitalized internal-use software costs.

Cash provided by financing activities during the threesix months ended AprilJuly 30,31, 2026 was $0.9$10.7 million, entirelyprimarily consisting of $7.5 million of proceeds from the issuance of common stock under our Employee Stock Purchase Plan (ESPP), and $3.1 million of proceeds from the exercise of employee stock options.

Cash providedused byin financing activities during the threesix months ended AprilJuly 30,31, 2025 was $12.3$28.4 million, entirelyprimarily consisting of $52.7 million in repurchases of common stock, partially offset by $15.2 million of proceeds from the exercise of employee stock options.options and $9.1 million of proceeds from the issuance of common stock under our ESPP.

ThereExcept as discussed in Note 11, Commitments and Contingencies, to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes outside of the ordinary course of business in our contractual obligations and commitments from those disclosed in our Annual Report.