Revenue Recognition |
12 Months Ended |
|---|---|
Jan. 31, 2026 | |
| Revenue from Contract with Customer [Abstract] | |
| Revenue Recognition |
Revenue Recognition The Company generates revenue primarily from (i) subscription fees, which consist primarily of fees for accessing its proprietary Unified-CXM platform and related stand-ready services; and (ii) professional services fees, which include fixed-fee arrangements for implementation and managed services associated with the Unified-CXM Platform. For managed services, the Company’s consultants work alongside customers’ teams to support their CXM goals and include platform configuration, ongoing education and ad-hoc support.
Revenue is recognized when control of promised products and services is transferred to customers in an amount that reflects the consideration the Company expects to receive.
Subscription revenue. Includes fees to access the Company’s cloud‑based platform and customer support services. The access and services represent stand‑ready performance obligations that are satisfied over time. Revenue is recognized ratably over the contract term, beginning on the date the platform is made available to the customer.
The Company typically invoices customers annually in advance. Amounts billed for future periods are recorded as deferred revenue, while accounts receivable represents unconditional rights to consideration.
The Company evaluates whether a significant financing component exists when payment timing differs from performance. Under a practical expedient, the Company does not adjust the transaction price for a financing component when the period between customer payment and the transfer of services is one year or less.
Certain customer agreements include service level agreements for platform uptime and performance. Customers may be entitled to credits if service levels are not met. The Company has not incurred any material obligations under these commitments, and no liability was recorded as of January 31, 2026 or 2025. The potential impact of the current conflicts in the Middle East on our business, operations, or financial results cannot be reasonably estimated at this time.
Professional services revenue. Includes implementation and managed services fees that are either fixed-fee or time-and materials arrangements. For fixed‑fee arrangements, revenue is recognized over time, generally based on progress toward completion. For time‑and‑materials arrangements, revenue is recognized as services are performed. The majority of the Company’s professional services arrangements are fixed-fee.
In certain managed services arrangements, the Company assists the customer with publishing advertisements on social media channels. As part of these arrangements, the Company is occasionally required to purchase advertising space from social media channels on behalf of its customers and invoice these amounts to the customer. Because the Company does not control the advertising inventory before it is transferred to the customer, the Company acts as an agent and recognizes revenue on a net basis, equal to its fee for services performed.
When a contract is modified, the Company evaluates the change to determine whether it should be accounted for as a separate contract, prospectively as part of the existing contract, or through a cumulative catch-up adjustment, depending on the nature of the modification.
Taxes collected from customers and remitted to governmental authorities, such as sales or value-added taxes, are excluded from revenue.
Contracts with Multiple Performance Obligations
The Company enters into arrangements that include multiple performance obligations, typically a combination of subscription and professional services. Additionally, the Company is often party to multiple concurrent contracts with a customer, or contracts through which a customer purchases a combination of services. These situations require judgment to determine whether the multiple promises are distinct performance obligations.
Once the Company has identified the performance obligations, it determines the transaction price and allocates it to each performance obligation on a relative standalone selling price (“SSP”) basis. SSP represents the price at which the Company would sell the subscription or professional services separately to a customer. Determining SSP requires judgment and may consider factors such as contractually stated prices, the size of the arrangement, list prices and other observable inputs.
Costs to Obtain Customer Contracts
Incremental and recoverable costs to obtain customer contracts, including sales commissions and referral fees paid to third parties, are capitalized when they are expected to be recovered. These costs are amortized on a straight-line basis over the estimated period of benefit, which is determined based on factors such as contract duration, customer relationship trends, the technology lifecycle and other relevant factors. For new customers and upsells, the period of benefit is currently estimated to be five years, while for contract renewals, the period is based on the renewal contract’s duration. Sales commissions paid for renewals are not commensurate with commissions paid on initial contracts given the substantive difference in commission rates relative to contract values. Amortization expense is recorded in sales and marketing expense within the consolidated statements of operations.
Capitalized costs to obtain customer contracts as of January 31, 2026 were $173.0 million, of which $63.1 million was included in prepaid expenses and other current assets and $109.9 million in other non-current assets. As of January 31, 2025, capitalized costs were $141.6 million, of which $39.4 million was included in prepaid expenses and other current assets and $102.2 million in other non-current assets.
During the years ended January 31, 2026, 2025 and 2024, the Company amortized costs to obtain customer contracts of $58.6 million, $47.7 million and $48.3 million, respectively.
Deferred Revenue
The Company invoices customers for subscriptions to its products in varying billing cycles, with the majority invoiced annually in advance of performance. Accounts receivable are recorded when the right to consideration becomes unconditional. Deferred revenue consists primarily of customer billings made in advance of the related performance obligations being satisfied.
The time between invoicing and when payment is due is not significant, and the Company generally does not provide financing arrangements to customers. Deferred revenue expected to be recognized as revenue within the succeeding 12-month period is classified as current, and the remaining amount is classified as non-current.
The Company recognized revenue of $401.9 million, $364.6 million and $322.1 million during the years ended January 31, 2026, 2025 and 2024, respectively, that was included in the deferred revenue balances at the beginning of the respective periods.
The Company receives payments from customers based on contractually established billing schedules. Contract assets represent revenue recognized in excess of amounts billed. As of January 31, 2026 and 2025, contract assets were $10.6 million and $1.9 million, respectively, and were included in prepaid expenses and other current assets.
Remaining Performance Obligation
Remaining performance obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes both deferred revenue and amounts that will be invoiced and recognized in future periods. As of January 31, 2026, the Company’s RPO was $986.5 million, of which $618.8 million is expected to be recognized as revenue over the next 12 months, with the remaining balance to be recognized thereafter. As of January 31, 2025, RPO was $987.7 million, of which $612.5 million was expected to be recognized as revenue over the next 12 months.
Disaggregation of Revenues
The Company disaggregates revenue by geographic region, as it believes this presentation best reflects how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. Refer to Note 15, Segment and Geographic Information, for revenue by geographic location.
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