The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the year ended January 31, 2026 included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the U.S. Securities and Exchange Commission on March 31, 2026. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Our fiscal year ends on January 31, and our fiscal quarters end on April 30, July 31, October 31, and January 31. Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to "we", "us", "our", "our company", and "Netskope" refer to Netskope, Inc. and its subsidiaries. Unless otherwise indicated, references to our "common stock" include our Class A common stock and Class B common stock. Overview We are redefining security and networking for the era of cloud and AI. The cloud and AI have completely revolutionized work. We are more dispersed, more productive, and more automated than ever before, and the rate of change is only accelerating. Not since the internet has there been such a transformative tectonic shift. But, with it has come collateral damage—traditional security and networking are now broken. We founded Netskope to address this revolution. We built Netskope One, our unified, cloud-native platform from the ground up to solve the challenge of securing and accelerating the digital interactions of enterprises in this new era. Organizations rely on our Netskope One platform to provide profound contextual intelligence into their data and digital interactions, securing them with precision, without sacrificing the digital experience. We leverage our patented technologies to enable dynamic, granular context-aware policies that allow us to protect sensitive data, stop threats, support regulatory compliance, and elevate the digital experience. Organizations today operate in a digital landscape that is heterogeneous and highly connected. It is comprised of globally dispersed users and non-human entities such as devices, applications, automated systems, and AI agents that interact with each other and a plethora of managed and unmanaged Software-as-a-Service applications, websites, AI, private applications, and other ecosystem applications across data centers and private and public clouds. With this new digital landscape, enterprises need a security and networking platform that can handle these far more complex, distributed, and dynamic sets of connections—all with more advanced security measures—to keep the organization, its people, and its data safe. Legacy appliance-based and first-generation cloud security solutions were designed for a legacy internet and data footprint, where simple rules-based threat detection and block-or-allow policies were sufficient. Moreover, traditional corporate networks were not designed to support the scale, flexibility, performance, and advanced security that is essential in the cloud and AI era. Architecture is critical when addressing these challenges. Our Netskope One platform uses a unique architecture built from the ground up as a unified platform with a converged security, network, and analytics technology stack that runs on our NewEdge global private cloud network ("NewEdge network") to deliver highly secure and performant digital interactions. 21 Table of Contents Key Factors Affecting Our Performance Pace of Modernization of Security and Networking for Organizations. The rapid evolution of enterprise IT is driving organizations to replace legacy systems with cloud-based and hybrid solutions, fundamentally altering the way security and networking solutions are deployed and operated. We believe that as enterprises undergo digital transformation, they increasingly rely on advanced technologies such as AI to gain granular visibility and control over information flows. This trend is compounded by the growing imperative to understand and secure data in an environment where hybrid and remote work models are common. Moreover, organizations' expanding global operations and the relentless push for improved user experience has driven the convergence of security and networking that is reshaping industry standards. While we are in the early stages of this transformation, we believe that the pace of modernization will continue to accelerate, reinforcing the demand for our platform. Our Ability to Add New Customers. Our ability to grow our customer base is a key indicator of both our market penetration and the future opportunities available to us. Our Ability to Retain and Expand Within Our Existing Customers. We believe that our ability to retain and expand within our existing customers is a testament to the technological strength and extensibility of our Netskope One platform and our customer relationships. As our customers realize tangible value from the products that they deploy, they often purchase more subscriptions, increase the number of users in more departments and geographies, and extend the number of applications covered. Investments in Sales and Marketing. We plan to continue investing in the expansion of our salesforce and channel partners to pursue attractive growth opportunities both domestically and internationally. In the Americas (which we define as the United States, Canada, and Latin America), this includes continuing the growth of our sales team, selling into the U.S. federal government market now that we have achieved U.S. Federal Risk and Authorization Management Program ("FedRAMP") High Authorization, and growing our channel partners, including managed service providers, to expand within the mid-market. Investment in Innovation. We plan to continue investing in research and development to drive rapid innovation, leveraging our core platform to serve our customers' needs and further strengthen our technology leadership. We believe this will lead to continued increased customer acquisition, expansion, and retention. We also intend to continue evaluating strategic acquisitions and investments in businesses and technologies that enhance our product capabilities, allow us to enter adjacent markets, and accelerate time to market. Key Business Metric We monitor the following key metric to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Dollar-Based Net Retention Rate ("NRR") Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue generated from our existing customers. We believe that we will achieve this objective by continuing to focus on customer success and loyalty and by continuously innovating our platform. Our NRR may fluctuate from period to period as we continue to expand our business. As of April 30, 2026 2025 Dollar-based net retention rate(1) 113 % 117 % (1) Our NRR reflects the percentage of our annual recurring revenue ("ARR") from existing customers, inclusive of the effects of upsell, cross-sell, contraction, and churn. We calculate this by first determining the ARR of the cohort of customers established on the same date of the prior fiscal year (the "Prior Period ARR"). We then calculate the ARR from these same subscription customers as of the current period end (the "Current Period ARR"). Current Period ARR includes any expansion and is net of contraction and churn over the trailing 12 months, but excludes ARR from new customers. We then divide the Current Period ARR by the Prior Period ARR to arrive at our NRR. In addition, we define ARR as the annualized value of our cloud subscription contracts that are active as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. Provided that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract's annualized value in ARR until the customer notifies us of their decision not to renew. ARR excludes non-recurring components of revenue such as professional services, training, sales of hardware, and other non-recurring revenue. 22 Table of Contents Components of Results of Operations Revenue We generate revenue primarily from subscriptions to the more than 25 products within our Netskope One platform, along with related support services. During the three months ended April 30, 2026 and 2025, subscription revenue accounted for approximately 99% of our total revenue. Customers do not take possession of cloud-based software; instead, our commitment is to provide our security, networking, and analytics platform throughout the contractual term. As a result, we recognize subscription revenue ratably over the contract term, which typically ranges from one to three years. Professional services and hardware account for an immaterial portion of our total revenue. Cost of Revenue Our cost of revenue consists of direct costs associated with providing our platform and products and our related professional services, including colocation and network transit expenses to operate our global data centers, depreciation of our data center equipment, cloud infrastructure and software expenses, and amortization of capitalized internal-use software. It also includes employee-related compensation expenses, such as salaries, bonuses, stock-based compensation expense, and employee benefits for teams supporting cloud operations and customer support and service organizations, and allocated overhead costs. We continuously work on optimizing these costs through strategic partnerships, improved operational efficiencies, and technological advancements. Additionally, we have made significant strategic investments to expand the global coverage of our NewEdge network to serve enterprises worldwide, which has historically increased our cost of revenue. As we have built our NewEdge network to include data centers in more than 80 unique regions with more than 200 localization zones globally, we do not anticipate future expansion requirements at the same rate. We expect the level of investment as a percentage of revenue to decrease over the long term as we realize the benefits of scale and operating leverage from previous investments we have made. Gross Profit and Gross Margin Gross profit is revenue less cost of revenue and gross margin is gross profit expressed as a percentage of revenue. Both gross profit and gross margin have been and will continue to be affected by various factors, including the costs associated with infrastructure and services. Operating Expenses Operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Employee-related compensation expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation expense, and in the case of sales and marketing expenses, sales commissions. Operating expenses also include other non-employee costs such as cloud infrastructure expenses, office space costs, fees for third-party professional services, and costs associated with software and subscription services. Sales and Marketing Sales and marketing expenses consist primarily of employee-related compensation expenses, sales commissions, marketing campaigns, marketing events, brand-building activities, promotions, and travel and entertainment expenses. Our sales and marketing strategies are comprehensive, involving direct sales efforts, channel partnerships, and digital marketing initiatives. We expect to expand our market presence both domestically and internationally, educate potential customers about the benefits of our platform and products, and drive both customer acquisition and retention. We expect our sales and marketing expenses will increase in dollar amount as we continue to invest meaningfully in expanding our sales force, increasing our marketing efforts, and expanding into new markets, but over the long term, we expect our sales and marketing expenses as a percentage of revenue to decrease. 23 Table of Contents Research and Development Research and development expenses consist primarily of employee-related compensation expenses, cloud infrastructure expenses related to the development of our platform and products, consulting fees, and software and subscription services. We prioritize research and development expenses to continuously enhance our product features, security protocols, and user experience, ensuring that we can respond swiftly to new cyber threats and customer needs. We expect our research and development expenses to increase in dollar amount as we continue to increase investments in our technology architecture and platform. However, we anticipate research and development expenses to decrease as a percentage of our total revenue over the long term although our research and development expenses may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses. General and Administrative General and administrative expenses consist primarily of employee-related compensation expenses, and other expenses for our executive, finance, legal, and human resources organizations. General and administrative expenses also include external legal, accounting, consulting, professional services fees, software and subscription services, facilities expenses, and other corporate expenses. We expect 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. As our business expands, we expect our general and administrative expenses will increase in dollar amount to support our growth, but over the long term, we expect our general and administrative expenses as a percentage of revenue to decrease. Loss on Changes in Fair Value of Convertible Notes We issued Convertible Notes in December 2022 and September 2024. We have elected to account for the Convertible Notes using the fair value option under Accounting Standards Codification ("ASC") 825, Financial Instruments. As a result, we are required to determine the fair value of the Convertible Notes on a quarterly basis using a complex valuation model. If the fair value of the Convertible Notes increases during a given period, we recognize a loss on the change in fair value of Convertible Notes in our statement of operations for that period. Conversely, if the fair value of the Convertible Notes decreases, we recognize a gain on the change in fair value of Convertible Notes in that period. Other Income, net Other income, net consists primarily of interest income, amortization of premiums and accretion of discounts on investment, convertible note issuance cost, and gains and losses from foreign currency transactions. Provision for Income Taxes Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance against net U.S. federal and state deferred tax assets as it is more likely than not that they will not be realized based on our history of losses. On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic U.S. research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. Because we have a valuation allowance on our U.S. deferred tax assets, the tax law did not impact tax expense or cash paid for taxes for the three months ended April 30, 2026. 24 Table of Contents Results of Operations The following table sets forth our results of operations for the periods presented: Three Months Ended April 30, 2026 2025 (in thousands) Revenue $ 201,592 $ 157,736 Cost of revenue(1) 53,337 48,223 Gross profit 148,255 109,513 Operating expenses: Sales and marketing(1) 105,682 69,376 Research and development(1) 105,714 67,881 General and administrative(1) 45,596 17,614 Total operating expenses 256,992 154,871 Loss from operations (108,737 ) (45,358 ) Loss on changes in fair value of convertible notes (12,225 ) (33,429 ) Other income, net 7,522 1,999 Loss before provision for income taxes (113,440 ) (76,788 ) Provision for income taxes 3,056 2,454 Net loss $ (116,496 ) $ (79,242 ) (1) Includes stock-based compensation as follows: Three Months Ended April 30, 2026 2025 (in thousands) Cost of revenue $ 3,997 $ 506 Sales and marketing 14,364 3,373 Research and development 31,235 5,308 General and administrative 26,432 904 Total stock-based compensation expense $ 76,028 $ 10,091 The following table sets forth the components of our condensed consolidated statements of operations as a percentage of revenue for each of the periods presented: Three Months Ended April 30, 2026 2025 Revenue 100 % 100 % Cost of revenue 26 31 Gross profit 74 69 Operating expenses: Sales and marketing 52 44 Research and development 52 43 General and administrative 23 11 Total operating expenses 127 98 Loss from operations (53 ) (29 ) Loss on changes in fair value of convertible notes (6 ) (21 ) Other income, net 4 1 Loss before provision for income taxes (55 ) (49 ) Provision for income taxes 1 2 Net loss (56 )% (50 )% Note: Certain figures may not sum up due to rounding. 25 Table of Contents Comparison of the Three Months Ended April 30, 2026 and 2025 Revenue Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Revenue $ 201,592 $ 157,736 $ 43,856 28 % Revenue increased by $43.9 million, or 28%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. The increase in revenue was driven by an increase in customers and the growing demand for our products from existing customers. Approximately 48% of the increase was driven by the addition of new customers and approximately 52% of the increase was driven by expansion within our existing customers. Cost of Revenue, Gross Profit, and Gross Margin Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Cost of revenue $ 53,337 $ 48,223 $ 5,114 11 % Gross profit 148,255 109,513 38,742 35 % Gross margin 74 % 69 % Cost of revenue increased by $5.1 million, or 11%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Employee-related compensation expense increased by $4.9 million due to the $3.5 million stock-based compensation expense and related payroll taxes we recognized as the liquidity-based vesting condition for certain stock-based awards was met upon our initial public offering ("IPO"). In addition, colocation and network transit expenses increased by $4.3 million which was partially offset by a $3.7 million decrease in amortization of intangible assets and $0.8 million decrease in cloud infrastructure and software expenses. Gross profit increased by $38.7 million, or 35%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025, and gross margin increased to 74% from 69%. The gross margin expansion was primarily due to the revenue growth driven by new customer acquisition and expansion within our existing customer base, which outpaced the growth in cost of revenue. The lower relative growth in cost of revenue reflects improved operating efficiencies in the management of our global data centers and cloud infrastructure operations. Sales and Marketing Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Sales and marketing 105,682 69,376 $ 36,306 52 % Sales and marketing expenses increased by $36.3 million, or 52%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Employee-related compensation expense increased by $23.9 million due to the $11.0 million stock-based compensation expense and related payroll taxes we recognized as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. In addition, marketing-related expenses and amortization of capitalized sales commissions increased by $7.3 million and $3.8 million, respectively. 26 Table of Contents Research and Development Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Research and development $ 105,714 $ 67,881 $ 37,833 56 % Research and development expenses increased by $37.8 million, or 56%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Employee-related compensation expense increased by $36.0 million due to the $26.5 million stock-based compensation expense and related payroll taxes we recognized as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. General and Administrative Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) General and administrative $ 45,596 $ 17,614 $ 27,982 159 % General and administrative expenses increased by $28.0 million, or 159%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Employee-related compensation expense increased by $27.9 million due to the $26.2 million stock-based compensation expense and related payroll taxes we recognized as the liquidity-based vesting condition for certain stock-based awards was met upon our IPO. Loss on Changes in Fair Value of Convertible Notes Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Loss on changes in fair value of convertible notes $ (12,225 ) $ (33,429 ) $ 21,204 (63 )% Loss on changes in fair value of Convertible Notes decreased by $21.2 million, or 63%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. We continued to recognize fair value losses driven by accrued interest associated with the payment-in-kind ("PIK") nature of the convertible notes; however, these losses were partially offset by the decline in our stock price and the increase in risk-free interest rates. The decline in stock price reduced the fair value of the embedded conversion features within the convertible notes, while the increase in risk-free interest rates reduced the present value of the convertible notes. As such, the loss on changes in fair value of convertible notes during the three months ended April 30, 2026 was lower compared to the same period last fiscal year. Other Income, net Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Other income, net $ 7,522 $ 1,999 $ 5,523 276 % Other income, net increased by $5.5 million, or 276%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. The increase was mainly due to a $4.2 million increase in interest income. 27 Table of Contents Provision for Income Taxes Three Months Ended April 30, Change 2026 2025 $ % (in thousands, except percentages) Provision for income taxes $ 3,056 $ 2,454 $ 602 25 % Provision for income taxes increased by $0.6 million, or 25%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025, primarily due to higher foreign tax liabilities in fiscal 2027 in our foreign jurisdictions due to increased expansion internationally. Non-GAAP Financial Measures We believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, 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. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures 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. Non-GAAP Gross Profit and Non-GAAP Gross Margin Non-GAAP gross profit and non-GAAP gross margin are defined as GAAP gross profit and GAAP gross margin, respectively, excluding stock-based compensation and related tax expense and amortization of acquired intangible assets. We believe these non-GAAP measures offer additional consistency and comparability with our historical financial performance, providing management and investors with more meaningful period-to-period comparisons. These metrics are designed to remove the impact of certain variables that can fluctuate for reasons unrelated to our underlying operating performance. The following table provides a reconciliation of our non-GAAP gross profit to our gross profit and of our non-GAAP gross margin to our gross margin, for each of the periods presented: Three Months Ended April 30, 2026 2025 (in thousands, except percentages) Revenue $ 201,592 $ 157,736 Gross profit $ 148,255 $ 109,513 Add: Stock-based compensation expense and related taxes 4,067 520 Add: Amortization of acquired intangible assets 2,309 6,082 Non-GAAP gross profit $ 154,631 $ 116,115 Gross margin 74 % 69 % Non-GAAP gross margin 77 % 74 % We expect non-GAAP gross margin will increase over the long term through improved operational efficiencies, scale benefits, and technological advancements. Non-GAAP Loss from Operations and Non-GAAP Operating Margin Non-GAAP loss from operations and non-GAAP operating margin are defined as GAAP loss from operations and GAAP operating margin, respectively, excluding stock-based compensation expense and related taxes and amortization of acquired intangible assets. We believe these non-GAAP measures offer our management and investors additional consistency and comparability with our historical financial performance, enabling more meaningful period-to-period comparisons. These metrics are designed to remove the impact of certain variables that can fluctuate for reasons unrelated to our underlying operating performance. 28 Table of Contents The following table provides a reconciliation of our non-GAAP loss from operations to our loss from operations and of our non-GAAP operating margin to our operating margin, for each of the periods presented: Three Months Ended April 30, 2026 2025 (in thousands, except percentages) Revenue $ 201,592 $ 157,736 Loss from operations $ (108,737 ) $ (45,358 ) Add: Stock-based compensation expense and related taxes 77,080 10,173 Add: Amortization of acquired intangible assets 2,455 6,598 Non-GAAP loss from operations $ (29,202 ) $ (28,587 ) Operating margin (54 )% (29 )% Non-GAAP operating margin (14 )% (18 )% We expect non-GAAP operating margin to improve over the long term through continued operational efficiencies, scale benefits, and technological advancements. Free Cash Flow and Free Cash Flow Margin Free cash flow is defined as net cash used in operating activities less purchases of property and equipment and intangible assets and capitalized internal-use software. Free cash flow margin is determined by dividing free cash flow by revenue. We believe that free cash flow and free cash flow margin serve as valuable indicators of liquidity, providing management and investors with insights into the cash generated from our operations. After accounting for investments in property and equipment and internal-use software, this cash is available for strategic initiatives, such as investing in our business and strengthening our financial position. Free cash flow does not represent the total change in our cash balance in any given period. The following table summarizes our cash flows and provides a reconciliation of free cash flow to net cash provided by (used in) operating activities and of our free cash flow margin to our net cash provided by (used in) operating activities as a percentage of revenue for each of the periods presented: Three Months Ended April 30, 2026 2025 (in thousands, except percentages) Net cash (used in) provided by operating activities $ (53,913 ) $ 25,592 Less: Purchases of property and equipment (2,159 ) (7,410 ) Less: Capitalization of internal-use software costs (1,094 ) (726 ) Free cash flow $ (57,166 ) $ 17,456 Net cash (used in) provided by operating activities as a percentage of revenue (27 )% 16 % Free cash flow margin (28 )% 11 % We expect free cash flow and free cash flow margin to improve over the long term through continued operational efficiencies, scale benefits, and technological advancements, however, the improvement is not expected to be linear. 29 Table of Contents Liquidity and Capital Resources Prior to our IPO, we financed operations primarily through private placements of our equity securities, issuance of convertible notes, and payments received from our customers. In September 2025, we closed our IPO of our Class A common stock. We received aggregate proceeds of approximately $992.2 million after deducting underwriting discounts and commissions. As of April 30, 2026, our principal source of liquidity was available cash, cash equivalents, and marketable securities aggregating to $1.1 billion. Since our inception, we have generated operating losses, as reflected in our accumulated deficit of $2.7 billion as of April 30, 2026. While we generated negative cash flows from operating activities in the first quarter of fiscal 2027, we generated positive operating cash flows in the fourth quarter of fiscal 2025, and the first quarter, third quarter, and fourth quarter of fiscal 2026. We anticipate continued improvement over the long term. Notwithstanding the foregoing, we may continue to incur operating losses and generate negative cash flows from operations in the future due to the investments we intend to continue to make in our business. As a result, we may require additional capital resources to execute strategic initiatives to grow our business. We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to support our working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including but not limited to our obligation to repay any balance under our Convertible Notes, our revenue growth rate, timing of cash receipt and payments, and the timing and extent of spending to support strategic initiatives. 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. Cash Flows The following table shows a summary of our cash flows for the periods presented: Three Months Ended April 30, 2026 2025 (in thousands) Net cash (used in) provided by operating activities $ (53,913 ) $ 25,592 Net cash (used in) provided by investing activities (177,179 ) 21,515 Net cash provided by financing activities 3,469 4,741 Operating Activities Our primary source of cash provided by operations is revenue. Our primary use of cash in our operating activities include payments for employee-related compensation expenses, contract acquisition costs, outside services, and other corporate expenditures. Net cash used in operating activities was $53.9 million for the three months ended April 30, 2026 as compared to the $25.6 million of net cash provided by operating activities for the three months ended April 30, 2025. The change in operating cash flows was primarily driven by lower customer collections due to the timing of billings and collections as we transitioned from upfront collections for multi-year contracts to annual billing arrangements, increased compensation and benefits-related payments, and a decrease in deferred revenue due to lower upfront billings.These were partially offset by increases in accounts payable and other non-current liabilities. Investing Activities Our primary use of cash for investing activities include purchases of property and equipment, intangible assets, and marketable securities. Our primary source of cash provided by investing activities include sale and maturities of marketable securities. Net cash used in investing activities was approximately $177.2 million for the three months ended April 30, 2026 as compared to the $21.5 million of net cash provided by investing activities for the three months ended April 30, 2025. The change was primarily 30 Table of Contents due to higher purchases of marketable securities, intangible assets, and property and equipment. These were partially offset by proceeds from the maturities of marketable securities. Financing Activities Our primary source of cash provided by financing activities include proceeds from the issuance of common stock. Our primary use of cash for financing activities include payments for withholding taxes related to the settlement of equity awards, stock issuance costs, and holdback payment related to business combination. Net cash provided by financing activities was $3.5 million for the three months ended April 30, 2026 as compared to the $4.7 million for the three months ended April 30, 2025. The decrease was primarily driven by the payments for tax withholding obligations upon settlement of equity awards. These were partially offset by proceeds from the issuance of common stock under our employee stock purchase plan and upon exercise of stock options. Convertible Notes In December 2022, we issued $401.0 million in aggregate principal amount of our 3.75% Convertible Senior PIK Toggle Notes due 2027 (as amended to extend the maturity date to 2028, the "2028 Notes") pursuant to an indenture, dated as of December 22, 2022, as supplemented by that certain First Supplemental Indenture, dated April 25, 2025, and Second Supplemental Indenture, dated September 19, 2025 (as supplemented, the "2028 Notes Indenture"), between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). In September 2024, we issued $75.0 million in aggregate principal amount of our 3.00% Convertible Senior PIK Toggle Notes due 2029 (the "2029 Notes" and, together with the 2028 Notes, the "Convertible Notes"), pursuant to an indenture, dated as of September 30, 2024, as supplemented by that certain First Supplemental Indenture, dated as of September 19, 2025 (the "2029 Notes Indenture" and, together with the 2028 Notes Indenture, the "Indentures"), between us and the Trustee. The 2028 Notes accrue interest at a rate of 3.75% per annum and pursuant to the terms of the 2028 Notes Indenture, will mature on December 15, 2028 (the "2028 Note Maturity Date"), unless earlier repurchased, redeemed, or converted. The 2029 Notes accrue interest at a rate of 3.00% per annum and will mature on August 1, 2029 (the "2029 Note Maturity Date" and, together with the 2028 Note Maturity Date, each a "Maturity Date"), unless earlier repurchased, redeemed, or converted. Interest on the Convertible Notes is payable quarterly in arrears in cash or by increasing the principal amount thereof, at our election. Our obligations under the Convertible Notes are guaranteed by each of our subsidiaries other than certain excluded subsidiaries. The Convertible Notes are senior, unsecured obligations and the guarantees are senior, unsecured obligations of our subsidiary guarantors. The Convertible Notes are convertible at the option of the holders following the date that is nine calendar months after the IPO until the relevant Maturity Date, at a conversion price equal to 42.1046 shares of Class B common stock per $1,000 principal amount of the 2028 Notes (equal to a conversion price of approximately $23.75 per share), or 40.4858 shares of Class B common stock per $1,000 principal amount of 2029 Notes (equal to a conversion price of approximately $24.70 per share). The number of shares of Class B common stock that would be issuable upon conversion of the Convertible Notes are as follows (in thousands, except share amounts): As of April 30, 2026 As of Maturity Date Aggregate Principal and Accrued and Unpaid Interest Shares of Class B Common Stock Issuable Upon Conversion Aggregate Principal and Accrued and Unpaid Interest Shares of Class B Common Stock Issuable Upon Conversion 2028 Notes $ 454,511 19,137,012 $ 501,293 21,106,738 2029 Notes 78,943 3,196,071 87,003 3,522,396 Total $ 533,454 22,333,083 $ 588,296 24,629,134 Holders of the Convertible Notes are also entitled to convert such Convertible Notes upon certain corporate transactions or if we call Convertible Notes for redemption following a change in tax law. 31 Table of Contents Pursuant to the terms of the Convertible Notes, we are required to offer to redeem the Convertible Notes upon the occurrence of certain change of control events, our liquidation or dissolution or the delisting of our Class A common stock. We would be required to repurchase the Convertible Notes at a price equal to the greater of (i) a specified premium, which shall be in an amount equal to the excess of (x) 140% of the principal amount of such Convertible Notes on or before the second anniversary of the issue date of the Convertible Notes, (y) 155% of the principal amount of such Convertible Notes after the second anniversary but on or before the third anniversary of the issue date of the Convertible Notes, or (z) 170% of the principal amount of such Convertible Notes after the third anniversary of the issue date of the Convertible Notes and (ii) the principal amount thereof and all accrued and unpaid interest thereon. So long as the holders of the 2028 Notes have made no prior repurchase demand, holders of the 2028 Notes can, during the period beginning 120 days prior to the 2028 Note Maturity Date (or earlier, if we so choose) and ending 91 days prior to the 2028 Note Maturity Date, submit a repurchase demand requiring us to offer to repurchase their 2028 Notes at a repurchase price equal to the principal amount of such 2028 Notes and an amount equal to a rate of return of 14.0% per annum, compounded quarterly. Holders of the 2029 Notes can require us to repurchase their 2029 Notes following the date that is the earlier of (i) September 30, 2028, and (ii) the third anniversary of the IPO, at a repurchase price equal to the principal amount of such 2029 Notes and an amount equal to a rate of return of 13.5% per annum, compounded quarterly. The table below reflects the maximum amount potentially owed under the Convertible Notes, assuming that the Convertible Notes are held until the Maturity Date. Rate of Return (1) Maturity Date Amount (dollars in millions) 2028 Notes 14.0 % December 2028 $ 913.2 2029 Notes 13.5 % August 2029 $ 145.1 (1) Compounded quarterly. On or after the one year anniversary of the completion of the IPO, we may redeem all or any portion of the Convertible Notes for cash at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if the price of our Class A common stock is at least 200% (or in the case of the 2028 Notes, beginning on December 15, 2027, at least 230%) of the then-applicable conversion price for each of at least twenty (20) trading days (whether or not consecutive) during the thirty (30) consecutive trading days prior to providing notice of such redemption. No sinking fund is provided for the Convertible Notes. So long as 10% of each series of Convertible Notes remain outstanding, we are restricted in the amount of indebtedness we may incur without the consent of holders of at least 55% of the then-outstanding aggregate principal amount of the relevant series of Convertible Notes. The Convertible Notes contain customary anti-dilution adjustments. Each indenture contains customary events of default, the occurrence of which would enable the Trustee or the holders of at least 25% in aggregate principal amount of such series of Convertible Notes to accelerate our obligations under such Convertible Notes. Contractual Obligations and Commitments As of April 30, 2026, our commitments consisted of (i) obligations under operating leases for offices and data centers on an undiscounted basis, of which $11.9 million is due within 12 months and $30.2 million is due thereafter, (ii) Convertible Note obligations, with an aggregate principal amount of $401 million, due in fiscal 2029 and an aggregate principal amount of $75 million due in fiscal 2030, and (iii) purchase obligations with various parties for products and services entered into in the normal course of business, of which $54.4 million is due within the next 12 months and $300.6 million is due thereafter. Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements and the related notes thereto, which have been prepared in accordance with GAAP. In preparing the condensed consolidated financial statements, we apply accounting estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect our underlying business and economic conditions. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the condensed consolidated financial statements based on our latest assessment of the current and projected business and economic 32 Table of Contents environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates. There have been no material changes to our critical accounting estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026. Recent Accounting Pronouncements For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see Note 2 "Basis of Presentation and Summary of Significant Accounting Policies" in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for more information. JOBS Act Accounting Election We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.