Commitments and Contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | Commitments and Contingencies Leases
The Company leases certain office facilities under operating lease arrangements that expire on various dates through 2024. Under the terms of the leases, the Company is responsible for certain operating expenses, such as insurance, property taxes, and maintenance expenses. Rent expense for non-cancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the terms of the leases.
Deferred rent as of October 31, 2021 was $2.4 million, $1.3 million of which was recorded in Accrued expenses and other current liabilities and $1.1 million of which was recorded in Other liabilities, long-term in the condensed consolidated balance sheets.
Deferred rent as of January 31, 2021 was $2.2 million, $1.3 million of which was recorded in Accrued expenses and other current liabilities and $0.9 million of which was recorded in Other liabilities, long-term in the condensed consolidated balance sheets.
Rent expense under these operating leases was $2.2 million and $1.7 million in the three months ended October 31, 2021 and 2020, respectively, and $5.5 million and $5.2 million in the nine months ended October 31, 2021 and 2020, respectively.
At October 31, 2021 and January 31, 2021, the Company had no capital leases. As of October 31, 2021, future minimum lease payments under non-cancelable operating leases were as follows (in thousands):
Letters of Credit
As of October 31, 2021, the Company has an aggregate availability of $1.3 million under letters of credit primarily related to one of its leases. The Company has not drawn down on these letters of credit as of October 31, 2021. No material letters of credit were outstanding as of January 31, 2021.
Contractual Obligations and Commitments
The Company has non-cancelable minimum guaranteed purchase commitments for data and hosting services as of January 31, 2021 as follows (in thousands):
There were no material contractual obligations or commitments that were entered into during the nine months ended October 31, 2021 that were outside the ordinary course of business.
Legal Matters
From time to time, the Company, various subsidiaries, and certain current and former officers may be named as defendants in various lawsuits, claims, investigations and proceedings arising from the normal course of business. The Company also may become involved with contract issues and disputes with customers. With respect to litigation in general, based on the Company’s experience, management believes that the amount of damages claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases. The Company believes that it has valid defenses with respect to the legal matters pending against the Company and intends to vigorously contest each of them.
The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position. However, if an unfavorable ruling were to occur in any specific period, there exists the possibility of a material adverse impact on the results of operations for that period. On September 7, 2017, a complaint was filed by Opal Labs Inc. (“Opal”) against the Company in the Circuit Court of the State of Oregon, alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims. Opal is claiming an amount of approximately $22 million in damages, additional punitive damages, and attorneys’ fees, as well as injunctive relief and specific performance. Opal’s allegations focus on the Company’s content planning module, one component of the Company’s Modern Marketing & Advertising product, not the Company’s broad software platform. On September 5, 2018, the case was moved from state court to federal court on the Company’s motion. On November 2, 2021, after a three-week trial, the jury returned an advisory verdict in which they answered five of the 15 verdict questions, hung on four questions, and did not answer the remaining questions, including questions related to damages. As for the specific claims, the jury indicated as follows: (i) fraudulent misrepresentation (hung), (ii) misappropriation of trade secrets (proven), (iii) breach of contract regarding a teaming agreement (proven), (iv) breach of contract regarding terms of use (hung), (v) breach of contract of a non-disclosure agreement (proven), (vi) breach of the implied covenant of good faith and fair dealing regarding the teaming agreement (hung), (vii) breach of the implied covenant of good faith and fair dealing regarding the terms of use (not proven), and (viii) breach of the implied covenant of good faith and fair dealing regarding the non-disclosure agreement (not proven). The jury did not award any economic or punitive damages. The Court has received the jury’s advisory responses from the verdict form. Further proceedings are scheduled in the case, which may include another trial or additional findings by the judge. The Company continues to vigorously defend this lawsuit, denies the allegations against it, and believes that it has a meritorious defense to the matter. At this time the Company cannot predict the probability of outcome or estimate a range of possible loss.
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