On October 11, 2024, we acquired the assets of Cogito Corporation (“Cogito”), a leading provider of AI solutions, including approximately 50 employees in technology functions. Cogito is based in Boston, Massachusetts. The transaction was accounted for as a business combination, after determining that the acquired set of assets, the fair value of which was not concentrated in a single asset, or group of similar assets, and included (a) an assembled workforce and (b) intangible assets, met the definition of a business.

The purchase price consisted of (i) $38.2 million of cash paid at closing, funded from cash on hand, (ii) the fair value of the contingent consideration arrangements estimated at $11.8 million as of the acquisition date, and (iii) $0.3 million of other purchase price adjustments. These contingent consideration arrangements provide for potential additional cash payments to the sellers aggregating up to approximately $19.0 million, contingent upon the achievement of certain performance targets extending through October 2026. We also established a key employee incentive plan for certain former non-owner key employees of Cogito that provides for contingent payments of up to $4.2 million based on achievement of certain performance targets through October 2026. These payments are not contingent upon continued employment and are accounted for separately from the business combination purchase consideration. As of April 30, 2025, we concluded that the payment of the contingent amount was no longer probable, leading to a reversal of the $3.5 million accrual we recorded during the year ended January 31, 2025. This reversal was recognized as a reduction of $1.8 million in selling, general and administrative expenses and a reduction of $1.7 million in research and development expenses on our condensed consolidated statement of operations during the three months ended April 30, 2025.

The purchase price for Cogito was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the remaining unallocated purchase price recorded as goodwill. The fair values assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts the expected future cash flows to present value using estimates and assumptions determined by management.

Among the factors contributing to the recognition of goodwill as a component of the Cogito purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. The acquisition resulted in the recognition of $27.1 million of goodwill. This transaction is accounted for as an asset acquisition for tax purposes, and therefore both the goodwill and acquired intangible assets are deductible for tax purposes. Tax impacts were not material.

Transaction and related costs directly related to the acquisition of Cogito, consisting primarily of professional fees and integration expenses, were $1.5 million for the three months ended April 30, 2025, of which $0.7 million is included in selling, general and administrative expenses, $0.6 million is included in research and development expenses, and $0.2 million is included in cost of recurring revenue.

The purchase price allocation for Cogito has been prepared on a preliminary basis and changes to the allocation may occur as additional information becomes available during the measurement period (up to one year from the acquisition date). Fair values still under review include values assigned to identifiable intangible assets.


(in thousands)	Amount
Components of Purchase Price:
Cash	$	38,186
Fair value of contingent consideration	11,786
Other purchase price adjustments	299
Total purchase price	$	50,271

Allocation of Purchase Price:
Net tangible assets (liabilities):
Accounts receivable	6,236
Other current assets, including cash acquired	2,402
Current and other liabilities	(3,177)
Contract liabilities — current and long-term	(8,047)
Net tangible liabilities	(2,586)
Identifiable intangible assets:
Customer relationships	14,300
Developed technology	11,500
Total identifiable intangible assets	25,800
Goodwill	27,057
Total purchase price allocation	$	50,271

The acquired customer relationships and developed technology were assigned estimated useful lives of seven and five years, respectively, the weighted average of which is approximately 6.1 years. The acquired identifiable intangible assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized over their estimated useful lives.

•In April 2024, we completed the acquisition of an AI-powered analytics company, including 14 employees. Pursuant to the terms of the purchase agreement, the purchase price consisted of $8.8 million of cash paid at closing, contingent consideration with an estimated fair value of $3.4 million, and the acquisition date fair value of our previously held investment via a simple agreement for future equity (“SAFE”), which was approximately $1.7 million. Further discussion regarding this SAFE investment appears in Note 12, “Fair Value Measurements”. We recognized intangible assets of $5.2 million for developed technology, $0.2 million for the acquired customer relationships, and goodwill of $8.2 million. The acquisition qualified as a stock transaction for tax purposes. This transaction was not material to our condensed consolidated financial statements, and as a result, additional business combination disclosures for this acquisition have been omitted.

•In May 2024, we completed the acquisition of a provider of cloud-based call-back solutions, including nine employees. This transaction resulted in the recognition of $3.2 million of goodwill, $0.3 million of acquired customer relationships, and $1.0 million of developed technology intangible assets, but was not material to our condensed consolidated financial statements, and as a result, additional business combination disclosures for this acquisition have been omitted.

•In October 2024, we completed the acquisition of a provider of data analytics solutions, including approximately 25 employees in technology functions. This transaction resulted in the recognition of $5.9 million of goodwill, $5.1 million of developed technology intangible assets, and $0.5 million of acquired customer relationships, but was not material to our condensed consolidated financial statements and, as a result, additional business combination disclosures for this acquisition have been omitted.

For the three months ended April 30, 2025 and 2024, we recorded a benefit of $7.7 million and $0.4 million, respectively, within selling, general and administrative expenses for changes in the fair values of contingent consideration obligations associated with business combinations, which was based on the probability of our historical business combinations achieving certain objectives and milestones. The current period benefit is primarily a result of revised outlooks related to a recent acquisition. The aggregate fair values of the remaining contingent consideration obligations associated with business combinations was $8.2 million at April 30, 2025, of which $5.6 million was recorded within accrued expenses and other current liabilities, and $2.6 million was recorded within other liabilities.

In November 2024, we entered into an agreement to acquire source code that qualified as an asset acquisition for an initial cash purchase price of $2.2 million, plus up to a maximum of $0.4 million in additional cash payments based on the achievement of certain integration milestones. Direct transaction costs related to such asset acquisition were immaterial.

In July 2023, we entered into an agreement to acquire source code that qualified as an asset acquisition and made an initial deposit payment of $1.0 million upon the execution of the contract and incurred direct transaction costs related to such asset acquisition of $0.2 million. The agreement also stipulated the establishment of additional milestone payments totaling $3.0 million, of which $2.0 million was deposited into a third-party escrow account in connection with the closing of the transaction. These milestone payments were contingent upon the successful delivery of the source code and the attainment of specific developmental objectives. During the year ended January 31, 2024, we made $1.8 million in milestone payments to the seller. During the year ended January 31, 2025, we made the final $1.0 million of development milestone payments to the seller, and closed the escrow account.