Stockholders' Equity |
3 Months Ended |
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Apr. 30, 2026 | |
| Equity [Abstract] | |
| Stockholders' Equity | Stockholders’ Equity Cancellation of Treasury Shares
On April 29, 2026, the Company’s board of directors (the “Board”) approved the cancellation of all shares of its stock previously held in treasury. As a result, a total of 14,130,784 treasury shares with a carrying value of $23.8 million were cancelled, reducing the Company’s treasury stock balance to zero. The carrying value of the cancelled shares was reclassified from treasury stock and recorded as a decrease to additional paid-in capital.
Share Repurchase Program
On March 11, 2026, the Company announced that the Board had authorized and approved a share repurchase plan (the “2026 Share Repurchase Program”), which authorized the Company to periodically repurchase up to $200 million of its Class A common stock through March 15, 2027. Under the 2026 Share Repurchase Program, on March 13, 2026, the Company entered into a variable tenor accelerated share repurchase agreement (“ASR Agreement”) with Citibank, N.A. (“Citibank”) to repurchase an aggregate of $125 million of the Company’s Class A common stock. Upon the completion of the ASR Agreement, the Company will have a remaining authorization to purchase up to an additional $75 million of the Company’s Class A common stock at the Company’s discretion through March 15, 2027, subject to market conditions and other factors. Repurchases under the 2026 Share Repurchase Program are expected to be funded using cash on hand, cash equivalents, and marketable securities.
Pursuant to the terms of the ASR Agreement, the Company paid Citibank $125 million in cash on March 16, 2026 and received an initial delivery of 17,123,288 shares of the Company’s Class A common stock. These shares were returned to the Company’s authorized but unissued share reserve and recorded as a reduction to the Company’s additional paid-in-capital. The initial delivery represented 80% of the $125 million aggregate amount divided by the Company’s Class A common stock price of $5.84 at the time of execution.
The final number of shares to be delivered for the full $125 million repurchase will be based on the volume-weighted average price (“VWAP”) of the Company’s Class A common stock during the pricing period, subject to a reference price adjustment. Upon final settlement, the Company will receive or deliver the additional number of shares. The scheduled termination date is September 1, 2026, but the ASR Agreement can potentially terminate early at the discretion of the financial institution or under certain conditions. As of April 30, 2026, the ASR Agreement remained unsettled, and the Company is expected to receive or deliver the difference between the 125 million prepayment divided by the settlement VWAP, minus the 17,123,288 initial shares.
The forward contract of the ASR Agreement meets the criteria for equity classification in accordance with Accounting Standards Codification 815, Derivatives and Hedging, at inception, and the Company expects equity classification to remain appropriate through final settlement. As such, the full $125 million was recorded as a reduction of stockholders’ equity at inception. The initial delivery of shares resulted in an immediate reduction of 17,123,288 shares from the outstanding shares used to calculate the weighted-average common shares outstanding for both basic and diluted earnings per share. The remaining shares expected to be delivered under the forward contract were excluded from the computation of diluted earnings per share because their effect would be anti-dilutive. The ASR Agreement contains provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the ASR Agreement may be accelerated, extended, or terminated early by Citibank, and various acknowledgments, representations, and warranties made by the parties to one another.
The Company’s share repurchases are subject to the one percent excise tax enacted by the Inflation Reduction Act of 2022 (the “IRA”). The excise tax is calculated based on the net number of shares repurchased during the year, which is equal to shares repurchased less any shares issued as a result of option exercises, restricted stock unit (“RSU”) vesting, or employee stock purchase plan (“ESPP”) purchases. Excise taxes are recorded as an adjustment to additional paid-in-capital. The Company recorded excise taxes of $0.9 million during the three months ended April 30, 2026. There were no share repurchases or associated excise taxes recorded during the three months ended April 30, 2025.
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