You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q. Overview Box is the leading Intelligent Content Management (ICM) provider. The Box ICM platform serves as a centralized, secure, and compliant platform that connects AI models and agents directly to an organization's most valuable asset – its content, including contracts, documents, and unstructured business data. Box enables our customers to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it is shared, edited, published, approved, signed, classified, and retained. With Box AI built within the Box ICM platform, customers can leverage the organization-specific context that AI needs to deliver accurate, governed, and impactful results. With our Software-as-a-Service (SaaS) platform, customers can work with their content as they need – from secure external collaboration and workspaces to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration. Administrators have a wide range of security, data protection, and compliance features they can activate for both end users and AI agents accessing content in Box to help meet legal and regulatory requirements, internal policies, and industry standards. The Box ICM platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications. With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it. We continue to innovate by expanding our core services and offerings. In June 2026, we announced the expansion of Box Zones to 10 regions worldwide, adding Israel, Singapore, and Switzerland as new regions and enhancing Canada and France with in-region compute, enabling global enterprises to better meet data residency requirements. In July 2026, we announced the launch of Box agent security and governance, a suite of security capabilities that protect enterprise content from the risks introduced by AI agents that connect from third-party platforms like Claude, ChatGPT, Microsoft Copilot, and Gemini through the Box Model Context Protocol (MCP) Server or APIs. In addition, we recently announced the general availability of the new Box Agent that leverages the latest advanced reasoning models to securely search company files, analyze and synthesize critical data, and generate new content – all while respecting Box’s enterprise-grade security, governance, and permissions controls. We also recently announced the general availability of Box Automate, our content-focused agentic workflow automation solution built natively in Box to orchestrate work across agents and teams. We offer our solution to our customers as a subscription-based service, with subscription fees based on the requirements of our customers, including the number of users, application programming interface (API) and AI unit entitlements, and functionality deployed. The duration of our contracts with customers ranges from one to three years or more, and we typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract. Current Period Highlights For the three months ended July 31, 2026 and 2025, our revenue was $321.1 million and $294.0 million, respectively, representing year-over-year growth of 9%, or 11% growth on a constant currency basis. As of July 31, 2026, our remaining performance obligations were $1.7 billion, an increase of 15% from our remaining performance obligations of $1.5 billion as of July 31, 2025, or 17% growth on a constant currency basis. For the three months ended July 31, 2026, our gross profit was $254.0 million and our gross margin was 79.1%, compared to our gross profit of $232.5 million and our gross margin of 79.1% for the three months ended July 31, 2025. For the three months ended July 31, 2026, our operating income was $32.6 million and our operating margin was 10.2%, compared to our operating income of $20.6 million and our operating margin of 7.0% for the three months ended July 31, 2025. For the three months ended July 31, 2026, our net cash provided by operating activities was $70.8 million, an increase of 54% from our net cash provided by operating activities of $46.0 million for the three months ended July 31, 2025. For the three months ended July 31, 2026, our non-GAAP free cash flow was $59.7 million, an increase of 67% from our non-GAAP free cash flow of $35.7 million for the three months ended July 31, 2025. 22 To supplement our current period highlights, we present growth on a constant currency basis for revenue and remaining performance obligations. Growth on a constant currency basis is determined by comparing current period reported results with the current results calculated using the equivalent rates in the prior period, excluding the effect of hedging. Impact of Macroeconomic Factors on Our Business Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior. Economic conditions, including impacts from inflation, changes in interest rates, tariffs, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, government shutdowns, reductions in U.S. federal spending, the ongoing Russia-Ukraine conflict and conflicts in the Middle East, and other changes in economic conditions, may adversely affect our results of operations and financial performance. As a result, we may continue to experience customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets for services that we offer. Key Business Metrics We use the key metrics below for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these key metrics provide meaningful supplemental information regarding our performance. We believe that both management and investors benefit from referring to these key metrics in assessing our performance and when planning, forecasting, and analyzing future periods. These key metrics also facilitate management’s internal comparisons to our historical performance as well as comparisons to certain competitors’ operating results. We believe these key metrics are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by institutional investors and the analyst community to help analyze the health of our business. Remaining Performance Obligations Remaining performance obligations (RPO) represent, at a point in time, contracted revenue that has not yet been recognized. RPO consists of deferred revenue and backlog. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation. Short-term RPO consists of the portion that is expected to be recognized within the next 12 months. While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance. RPO as of July 31, 2026 was $1.7 billion, an increase of 15% from July 31, 2025. As of July 31, 2026, short-term RPO was $904.7 million, an increase of 11% from July 31, 2025, and long-term RPO was $787.0 million, an increase of 18% from July 31, 2025. The increase in RPO was driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the timing of customer-driven renewals, longer average contract terms, and the addition of new customers. RPO growth was unfavorably impacted by approximately 290 basis points due to fluctuations in foreign currency exchange rates. Billings Billings represent our revenue plus the changes in deferred revenue and contract assets in the period. Billings we record in any particular period primarily reflect subscription renewals and expansion within existing customers plus sales to new customers, and represent amounts invoiced for all of our products and professional services. We typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings. If the customer negotiates to be invoiced annually or more frequently, only the amount billed for such period will be included in billings. Billings help investors better understand our sales activity for a particular period, which is not necessarily reflected in our revenue given that we recognize subscription revenue ratably over the contract term. We consider billings a significant performance measure. We monitor billings to manage our business, make planning decisions, evaluate our performance and allocate resources. We believe that billings offer valuable supplemental information regarding the performance of our business and will help investors better understand the sales volumes and performance of our business. We do not consider billings to be a non-GAAP financial measure because it is calculated using exclusively revenue, deferred revenue, and contract assets, all of which are financial measures calculated in accordance with GAAP. 23 Billings for the three and six months ended July 31, 2026 were $309.5 million and $564.9 million, respectively, representing an increase of 17% from the three months ended July 31, 2025 and an increase of 11% from the six months ended July 31, 2025. The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was also impacted by fluctuations in foreign currency exchange rates. For the three months ended July 31, 2026, billings growth was favorably impacted by approximately 100 basis points and for the six months ended July 31, 2026, billings growth was unfavorably impacted by approximately 320 basis points. Our use of billings has certain limitations as an analytical tool and should not be considered in isolation or as a substitute for revenue or an analysis of our results as reported under GAAP. Billings are recognized when invoiced, while the related subscription and premier services revenue is recognized ratably over the contract term as we satisfy a performance obligation. Also, other companies, including companies in our industry, may not use billings, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of billings as a comparative measure. Over time, we expect to continue to normalize payment durations. In addition, as we have gained and expect to continue to gain more traction with large enterprise customers, we also anticipate our quarterly billings to increasingly concentrate in the back half of our fiscal year, especially in the fourth quarter. A calculation of billings starting with revenue, the most directly comparable GAAP financial measure, is presented below (in thousands): Three Months Ended Six Months Ended July 31, July 31, 2026 2025 2026 2025 GAAP revenue $ 321,147 $ 293,999 $ 627,088 $ 570,271 Deferred revenue, end of period 595,814 547,263 595,814 547,263 Less: deferred revenue, beginning of period (605,944 ) (574,119 ) (656,697 ) (608,600 ) Contract assets, beginning of period 6,255 3,662 6,479 4,160 Less: contract assets, end of period (7,766 ) (5,931 ) (7,766 ) (5,931 ) Billings $ 309,506 $ 264,874 $ 564,918 $ 507,163 Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), capitalized software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business. Non-GAAP free cash flow for the three and six months ended July 31, 2026 was $59.7 million and $187.5 million, respectively, representing an increase of 67% from the three months ended July 31, 2025 and an increase of 22% from the six months ended July 31, 2025. The increase in non-GAAP free cash flow for the three months ended July 31, 2026 was primarily driven by an increase in cash flows from operating activities and a decrease in purchases of property and equipment, partially offset by an increase in capitalized software costs. The increase in non-GAAP free cash flow for the six months ended July 31, 2026 was primarily driven by an increase in cash flows from operating activities, partially offset by an increase in capitalized software costs. The year-over-year changes in cash flows from operating activities for the three and six months ended July 31, 2026 are described in more detail under Liquidity and Capital Resources below. 24 A calculation of non-GAAP free cash flow starting with net cash provided by operating activities, the most directly comparable GAAP financial measure, is presented below (in thousands): Three Months Ended Six Months Ended July 31, July 31, 2026 2025 2026 2025 GAAP net cash provided by operating activities $ 70,845 $ 45,964 $ 211,036 $ 173,023 Purchases of property and equipment, net of sale proceeds (121 ) (1,863 ) (1,394 ) (2,174 ) Capitalized software costs (10,985 ) (8,381 ) (22,155 ) (16,792 ) Non-GAAP free cash flow $ 59,739 $ 35,720 $ 187,487 $ 154,057 Net Retention Rate Net retention rate is defined as the net percentage of Total Annual Recurring Revenue (Total ARR) retained from existing customers, including expansion. We define Total ARR as the annualized recurring revenue from all active customer contracts at the end of a reporting period. We calculate our net retention rate as of a period end by starting with the Total ARR from customers as of 12 months prior to such period end (Prior Period Total ARR). We then calculate Total ARR from these same customers as of the current period end (Current Period Total ARR). Finally, we divide the Current Period Total ARR by the Prior Period Total ARR to arrive at our net retention rate. In calculating our net retention rate, we include only Total ARR associated with those customers who have subscribed to Box for at least 12 months. We believe our net retention rate is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and grow revenue from our customer base. Net retention rate is an operational metric and there is no comparable GAAP financial measure to which we can reconcile this particular key metric. Our net retention rate was 106% and 103% as of July 31, 2026 and 2025, respectively. Our net retention rate has improved due to continued customer adoption of our products, particularly our multi-product Suites and AI-enabled products. As our customers purchase add-on products or our bundled plans, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product. We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, are significant factors in our customer retention results. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future. Components of Results of Operations Revenue We derive our revenue primarily from three sources: (1) subscription revenue, which is comprised of subscription fees from customers who have access to our ICM platform including routine customer support; (2) revenue from customers purchasing our premier services package; and (3) revenue from professional services such as implementing best practice use cases, project management and implementation consulting services. To date, practically all of our revenue has been derived from subscription and premier services. Subscription and premier services revenue are driven primarily by the number of customers, the number of seats sold to each customer and the price of our services. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription and premier services ratably over the contract term. The duration of our contracts with customers ranges from one to three years or more, and we typically invoice our customers at the beginning of the term, in annual, multi-year, quarterly or monthly installments. Our subscription and premier services contracts are typically non-cancellable and do not contain refund-type provisions. Professional services are generally billed on a fixed price basis, for which revenue is recognized over time based on the proportion performed. Professional services revenue was not material as a percentage of total revenue for all periods presented. Revenue is presented net of sales and other taxes we collect on behalf of governmental authorities. 25 Cost of Revenue Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation, customer support and professional services personnel, public cloud hosting costs, security services and other tools, as well as amortization expense associated with acquired technology and capitalized software development. We allocate overhead such as facilities, information technology costs and employee benefit costs to all departments based on headcount. As such, general overhead expenses are reflected in cost of revenue and each of the operating expense categories set forth below. Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of each category of operating expenses. Operating expenses also include allocated overhead costs for facilities, information technology costs and employee benefit costs. Research and Development. Research and development expense consists primarily of employee compensation and related expenses, as well as allocated overhead. Our research and development efforts are focused on scaling our platform, building an ecosystem of best-of-breed applications and platforms, infrastructure, adding enterprise grade features, functionality and enhancements such as workflow automation, intelligent content management capabilities, advanced security, e-signature capability, native visual collaboration and whiteboarding, and artificial intelligence to enhance the ease of use of our intelligent content management platform. We capitalize certain qualifying costs to develop software for internal use incurred during the application development stage. Sales and Marketing. Sales and marketing expense consists primarily of employee compensation and related expenses, sales commissions, marketing programs, travel-related expenses, as well as allocated overhead. Marketing programs include but are not limited to advertising, events, corporate communications, brand building, and product marketing. Sales and marketing expense also consists of public cloud hosting, customer support costs related to providing our cloud-based services to our free users. We market and sell our intelligent content management services worldwide through our direct sales organization and through indirect distribution channels such as strategic resellers. Our sales and marketing expenses are generally higher for acquiring new or expanding existing customers than for renewals of existing customer subscriptions. General and Administrative. General and administrative expense consists primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, recruiting, information systems, enterprise security, compliance, fees for external professional services and cloud-based enterprise systems, as well as allocated overhead. External professional services fees are primarily comprised of outside legal, accounting, audit and outsourcing services. Interest Income Interest income consists primarily of interest earned on our cash and cash equivalents and short-term investments. We have historically invested our cash and cash equivalents in overnight deposits, certificates of deposit, money market funds, corporate debt securities, U.S. treasury securities and non-U.S. government issued securities. Interest Expense Interest expense consists primarily of interest charges and the amortization of issuance costs for the 2029 Convertible Notes. Other (Expense) Income, Net Other (expense) income, net consists primarily of gains and losses from foreign currency transactions and foreign currency forward contracts not designated as cash flow hedges. Provision for Income Taxes Provision for income taxes consists primarily of U.S. and foreign income taxes and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions. 26 Comparison of the Three and Six Months Ended July 31, 2026 and 2025 Revenue Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Revenue $ 321,147 $ 293,999 $ 27,148 9 % $ 627,088 $ 570,271 $ 56,817 10 % The $27.1 million, or 9%, and $56.8 million, or 10%, increases in revenue for the three and six months ended July 31, 2026, respectively, were primarily driven by seat growth, net of churn in existing customers and continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus and Enterprise Advanced. The increases were partially offset by the weakening of foreign currency exchange rates, which negatively impacted our revenue growth rates by approximately 170 basis points and 60 basis points for the three and six months ended July 31, 2026, respectively. Cost of Revenue Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Cost of revenue $ 67,182 $ 61,522 $ 5,660 9 % $ 129,917 $ 122,195 $ 7,722 6 % Percentage of revenue 20.9 % 20.9 % 20.7 % 21.4 % Gross margin 79.1 % 79.1 % 79.3 % 78.6 % The $5.7 million, or 9%, increase in cost of revenue for the three months ended July 31, 2026 was primarily due to increases of $3.7 million in amortization of capitalized software and $3.2 million in public cloud infrastructure costs. This increase was partially offset by decreases of $0.7 million in acquired intangible assets amortization, $0.3 million in contractors and consulting services, and $0.2 million in stock-based compensation expense. Cost of revenue as a percentage of revenue remained flat year-over-year. The $7.7 million, or 6%, increase in cost of revenue for the six months ended July 31, 2026 was primarily due to increases of $7.7 million in amortization of capitalized software and $2.0 million in public cloud infrastructure costs. This increase was partially offset by decreases of $1.4 million in acquired intangible assets amortization and $0.8 million in workforce reorganization expenses. Cost of revenue as a percentage of revenue decreased by approximately 70 basis points year-over-year. With strong and growing adoption of our platform and Box AI, as well as the capacity dynamics of our public cloud providers, we expect that over time, our cost of revenue in absolute dollars will increase but may fluctuate as a percentage of revenue. Research and Development Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Research and development $ 78,403 $ 71,717 $ 6,686 9 % $ 154,316 $ 144,018 $ 10,298 7 % Percentage of revenue 24 % 24 % 25 % 25 % The $6.7 million, or 9%, increase in research and development expense for the three months ended July 31, 2026 was primarily due to increases of $5.5 million and $1.4 million in employee related costs and stock-based compensation expense, respectively, driven by a 6% increase in headcount. The increased employee headcount and related costs are primarily driven by the growth in lower cost regions. Additionally, we had increases of $2.0 million in enterprise software expenses, $1.5 million in public cloud infrastructure costs, and $1.4 million in office related costs. The increase was partially offset by higher capitalized internally 27 developed software costs of $4.0 million and decreases of $0.6 million in contractors and consulting services and $0.4 million in workforce reorganization expenses. Research and development expenses as a percentage of revenue remained flat year-over-year. The $10.3 million, or 7%, increase in research and development expense for the six months ended July 31, 2026 was primarily due to increases of $10.2 million and $3.2 million in employee related costs and stock-based compensation expense, respectively, driven by a 6% increase in headcount. The increased employee headcount and related costs are primarily driven by the growth in lower cost regions. Additionally, we had increases of $3.6 million in enterprise software expenses, $2.9 million in office related costs, and $2.8 million in public cloud infrastructure costs. The increase was partially offset by higher capitalized internally developed software costs of $6.9 million and decreases of $4.1 million in workforce reorganization expenses and $1.3 million in contractors and consulting services. Research and development expenses as a percentage of revenue decreased by approximately 60 basis points year-over-year. We expect our research and development expenses to increase in absolute dollars but decrease as a percentage of revenue over time as we continue to make significant improvements to our product offerings and services and increase headcount in lower cost regions. Sales and Marketing Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Sales and marketing $ 106,719 $ 102,198 $ 4,521 4 % $ 208,589 $ 201,297 $ 7,292 4 % Percentage of revenue 33 % 35 % 33 % 35 % The $4.5 million, or 4%, increase in sales and marketing expense for the three months ended July 31, 2026 was primarily due to increases of $4.0 million and $0.6 million in employee related costs and stock-based compensation expense, respectively, driven by a 5% increase in headcount. Sales and marketing expenses as a percentage of revenue decreased by approximately 150 basis points year-over-year. The $7.3 million, or 4%, increase in sales and marketing expense for the six months ended July 31, 2026 was primarily due to increases of $8.4 million and $1.5 million in employee related costs and stock-based compensation expense, respectively, driven by a 5% increase in headcount. Additionally, we had an increase of $0.6 million in enterprise software expenses. The increase was partially offset by decreases of $2.1 million in workforce reorganization expenses and $1.0 million in contractors and consulting services. Sales and marketing expenses as a percentage of revenue decreased by approximately 200 basis points year-over-year. We expect to continue to invest in capturing our large market opportunity globally and capitalize on our competitive position with a continued focus on our profitability objectives. We expect our sales and marketing expenses to increase in absolute dollars but decrease as a percentage of revenue over time as our existing customer base grows and a relatively higher percentage of our revenue is attributable to renewals versus new or expanding Box deployments and as we continue to focus on improving sales productivity. General and Administrative Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % General and administrative $ 36,208 $ 37,984 $ (1,776 ) -5 % $ 74,189 $ 75,845 $ (1,656 ) -2 % Percentage of revenue 11 % 13 % 12 % 13 % The $1.8 million, or 5%, decrease in general and administrative expense for the three months ended July 31, 2026 was primarily due to decreases of $1.5 million in stock-based compensation expense and $0.6 million in workforce reorganization expenses. This decrease was partially offset by an increase of $0.6 million in contractors and consulting services. General and administrative expense as a percentage of revenue decreased by approximately 160 basis points year-over-year. 28 The $1.7 million, or 2%, decrease in general and administrative expense for the six months ended July 31, 2026 was primarily due to decreases of $2.7 million in stock-based compensation expense and $0.5 million in workforce reorganization expenses. This decrease was partially offset by increases of $0.7 million in employee related costs, $0.6 million in contractors and consulting services, and $0.3 million in office related costs. General and administrative expense as a percentage of revenue decreased by approximately 150 basis points year-over-year. We expect our general and administrative expenses to increase in absolute dollars but decrease as a percentage of revenue over time as we benefit from greater operational scale and efficiency. Interest Income Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Interest income $ 2,814 $ 6,715 $ (3,901 ) -58 % $ 5,800 $ 13,413 $ (7,613 ) -57 % The $3.9 million and $7.6 million decreases for the three and six months ended July 31, 2026, respectively, were primarily due to decreases in interest income on cash and cash equivalents and short-term investments. These decreases were driven by lower average cash and short-term investment balances, primarily resulting from the settlement of convertible notes in January 2026 and repurchases of common stock, along with lower interest rates on our investments. Interest Expense Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Interest expense $ 2,404 $ 2,680 $ (276 ) -10 % $ 4,805 $ 5,376 $ (571 ) -11 % The $0.3 million and $0.6 million decreases for the three and six months ended July 31, 2026, respectively, were primarily due to decreases in amortization of convertible debt issuance costs due to the maturity of convertible notes in January 2026. Other (Expense) Income, Net Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Other (expense) income, net $ (1,189 ) $ (872 ) $ (317 ) 36 % $ (1,707 ) $ 1,932 $ (3,639 ) -188 % The $0.3 million and $3.6 million decreases for the three and six months ended July 31, 2026, respectively, were primarily due to increases of $0.3 million and $3.7 million, respectively, in net foreign currency losses. Provision for Income Taxes Three Months Ended Six Months Ended July 31, Change July 31, Change (dollars in thousands) 2026 2025 $ % 2026 2025 $ % Provision for income taxes $ 12,635 $ 10,296 $ 2,339 23 % $ 22,418 $ 15,246 $ 7,172 47 % 29 The $2.3 million and $7.2 million increases for the three and six months ended July 31, 2026, respectively, were primarily due to increased profitability and a change from tax windfalls to tax shortfalls on stock-based compensation, partially offset by lower U.S. tax on foreign earnings. Liquidity and Capital Resources As of July 31, 2026, we had cash and cash equivalents, restricted cash, and short-term investments of $445.6 million. During the six months ended July 31, 2026, we generated operating cash flow of $211.0 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing. We believe our existing cash, cash equivalents, and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond. Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, settlement of our convertible senior notes and convertible preferred stock, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Cash Flows For the six months ended July 31, 2026 and 2025, our cash flows were as follows (in thousands): Six Months Ended July 31, 2026 2025 $ Change Net cash provided by operating activities $ 211,036 $ 173,023 $ 38,013 Net cash used in investing activities (20,177 ) (18,901 ) (1,276 ) Net cash used in financing activities (216,416 ) (127,052 ) (89,364 ) Operating Activities The $38.0 million increase in net cash provided by operating activities for the six months ended July 31, 2026 compared to the six months ended July 31, 2025 was primarily due to an increase of $22.8 million in non-cash items and an increase of $15.3 million in net income. The $22.8 million increase in non-cash items was primarily due to a $7.9 million increase in unrealized loss from foreign currency remeasurement, a $4.6 million increase in deferred income tax expense, a $4.6 million increase in depreciation and amortization expense driven by an increase in amortization of capitalized software, a $2.5 million increase in losses from foreign currency forward contracts not designated as cash flow hedges, and a $2.0 million increase in stock-based compensation expense driven by an increase in headcount. The increase in net cash provided by operating activities was further adjusted by a $0.1 million increase in net cash outflows due to changes in our operating assets and liabilities, which was primarily due to an $8.5 million change in other assets due to the timing of prepayments, a $5.4 million change in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, and a $1.9 million change in operating lease liabilities due to recurring lease payments. These changes were partially offset by an $11.6 million change in deferred revenue due to the timing of revenue recognition and a $3.9 million change in accounts receivable due to timing of our cash collections. Investing Activities The $1.3 million increase in net cash used in investing activities for the six months ended July 31, 2026 compared to the six months ended July 31, 2025 was primarily due to a $4.3 million increase in capitalized software costs driven by increased projects, partially offset by a $1.5 million decrease in purchases of short-term investments driven by the timing, a $0.8 million decrease in purchases of property and equipment, net of sale proceeds driven by reduced office space build out expenses, and a $0.7 million increase in maturities of short-term investments. 30 Financing Activities The $89.4 million increase in net cash used in financing activities for the six months ended July 31, 2026 compared to the six months ended July 31, 2025 was primarily due to a $96.1 million increase in repurchases of our common stock, partially offset by a $10.5 million decrease in employee payroll taxes paid related to net share settlement of stock awards driven by our stock price on the date of vest. Debt In September 2024, we issued $460.0 million aggregate principal amount of 1.50% convertible senior notes due September 15, 2029. The 2029 Convertible Notes are senior unsecured obligations and bear interest at a rate of 1.50% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025. Each $1,000 principal amount of the 2029 Convertible Notes will be convertible into 23.0102 shares of our Class A common stock, which is equivalent to a conversion price of approximately $43.46 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, we will satisfy our conversion obligation by paying cash up to the aggregate principal amount of the 2029 Convertible Notes to be converted and we will pay or deliver, as the case may be, the conversion premium in cash, shares of common stock or a combination of cash and shares of common stock, at our election. In June 2023, we entered into an amended and restated secured credit agreement and in December 2024, we entered into Amendment No. 1 to the June 2023 Facility to provide for a $75.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit. As of July 31, 2026, we had no debt outstanding on the June 2023 Facility. Series A Convertible Preferred Stock On April 7, 2021 we entered into an Investment Agreement with KKR and certain other investors relating to the issuance and sale of 500,000 shares of our Series A Convertible Preferred Stock, par value of $0.0001 per share, for an aggregate purchase price of $500 million, or $1,000 per share. Share Repurchase Plan Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions. On March 19, 2026, we announced that our Board of Directors authorized a $500 million expansion of the share repurchase plan. During the three months ended July 31, 2026, we repurchased 2.6 million shares at a weighted average price of $25.84 per share for a total amount of $66.4 million. During the six months ended July 31, 2026, we repurchased 7.4 million shares at a weighted average price of $24.47 per share for a total amount of $180.7 million. As of July 31, 2026, approximately $378 million remained authorized and available for additional repurchases. Off-Balance Sheet Arrangements Through July 31, 2026, we did not have any relationships with unconsolidated entities that have, or are reasonably likely to have, a material effect on our financial statements. Contractual Obligations and Commitments Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the condensed consolidated balance sheet as of July 31, 2026, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under our June 2023 Facility and 2029 Convertible Notes. For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 5, 6, and 7, respectively, in Part I, Item 1. Financial Statements. Critical Accounting Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions. 31 There have been no material changes to our critical accounting estimates during the six months ended July 31, 2026 from those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended January 31, 2026. Recent Accounting Pronouncements Refer to Part I, Item 1. Financial Statements—Note 1 regarding the effect of recently adopted and issued accounting pronouncements on our financial statements. Non-GAAP Financial Measures Regulation S-K Item 10(e), “Use of Non-GAAP Financial Measures in Commission Filings,” defines and prescribes the conditions for use of non-GAAP financial information. Our measure of non-GAAP free cash flow (as defined above) meets the definition of a non-GAAP financial measure. We use non-GAAP financial measures and our key metrics for financial and operational decision-making (including for purposes of determining variable compensation of members of management and other employees) and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures and key metrics provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures and key metrics in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures and key metrics also facilitate management’s internal comparisons to our historical performance as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures and key metrics are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), capitalized software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business. We specifically identify adjusting items in our reconciliation of GAAP to non-GAAP financial measures. We consider non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening the balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity. Limitations on the use of non-GAAP financial measures A limitation of our non-GAAP financial measures is that they do not have uniform definitions. Our definitions will likely differ from the definitions used by other companies, including peer companies, and therefore comparability may be limited. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP. We compensate for these limitations by reconciling non-GAAP financial measures to the most comparable GAAP financial measures. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP financial measures in conjunction with the most comparable GAAP financial measures.