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FAIR VALUE MEASUREMENTS
 3 Months Ended
Apr. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of April 30, 2025 and January 31, 2025:

 April 30, 2025
 Fair Value Hierarchy Category
(in thousands)Level 1Level 2Level 3
Assets:   
Money market funds$28,483 $— $— 
U.S. Treasury bills, classified as cash and cash equivalents249 — — 
Foreign currency forward contracts— 57 — 
Contingent consideration receivable— — 2,215 
Total assets$28,732 $57 $2,215 
Liabilities:   
Foreign currency forward contracts$— $32 $— 
Contingent consideration — business combinations— — 8,159 
Total liabilities$— $32 $8,159 
 
 January 31, 2025
 Fair Value Hierarchy Category
(in thousands)Level 1Level 2Level 3
Assets:   
Money market funds$56,019 $— $— 
Foreign currency forward contracts— 141 — 
Contingent consideration receivable — — 2,951 
Total assets$56,019 $141 $2,951 
Liabilities:   
Contingent consideration — business combinations— — 22,046 
Total liabilities$— $— $22,046 

On January 31, 2024, we completed the sale of a service business for manual quality managed services for no upfront cash consideration, with an estimated valuation of $6.0 million based on (i) the estimated fair value of our share of the future adjusted operating income (as defined in the agreement) of the business, to be paid annually over a minimum of six years following the transaction closing date, (ii) the amount by which the closing working capital of the business exceeds the working capital target, and (iii) the estimated amount of future collections of outstanding receivables as of the closing date from a certain customer, net of certain expenses. We engaged a third-party to assist in valuing the contingent consideration, which was valued at $2.2 million as of April 30, 2025, and is included within other assets on our condensed consolidated balance sheets. During the three months ended April 30, 2025 and 2024, we received no contingent consideration payments and recorded charges of $0.7 million and 0.3 million, respectively, for changes in the estimated fair value of this contingent receivable.
The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 30, 2025 and 2024:

 Three Months Ended
April 30,
(in thousands)20252024
Fair value measurement at beginning of period$22,046 $3,511 
Contingent consideration liabilities recorded for business combinations— 3,397 
Changes in fair values, recorded in operating expenses(7,696)(433)
Payments of contingent consideration(6,388)(277)
Foreign currency translation and other197 (16)
Fair value measurement at end of period$8,159 $6,182 
 
Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses.

There were no transfers between levels of the fair value measurement hierarchy during the three months ended April 30, 2025 and 2024.

Fair Value Measurements
 
Money Market Funds and U.S. Treasury Bills — We value our money market funds and U.S. treasury bills using quoted active market prices for such instruments.

Short-term Investments, Corporate Debt Securities, and Commercial Paper — The fair values of short-term investments, as well as corporate debt securities and commercial paper classified as cash equivalents, are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model.

Foreign Currency Forward Contracts — The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market foreign currency exchange rates using readily observable market prices for similar contracts.

Contingent Consideration Assets and Liabilities — Business Combinations and Divestitures — The fair value of the contingent consideration related to business combinations and divestitures is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. As of April 30, 2025, we utilized discount rates ranging from 4.2% to 7.8%, with a weighted average discount rate of 5.9% for our contingent consideration liabilities and 6.9% to 11.0%, with a weighted average discount rate of 8.7% for our contingent consideration asset. As of January 31, 2025, we utilized discount rates ranging from 4.5% to 6.2%, with a weighted average discount rate of 5.8% for our contingent consideration liabilities and 6.7% to 8.6%, with a weighted average discount rate of 7.4% for our contingent consideration asset.

Other Financial Instruments

The carrying amounts of accounts receivable, contract assets, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities.
The estimated fair value of our Revolving Credit Facility borrowing was approximately $99.0 million at April 30, 2025 and the estimated fair value of our Prior Revolving Facility borrowing was approximately $99.0 million at January 31, 2025. The estimated fair value of borrowings under our Revolving Credit Facility and Prior Revolving Credit Facility, as applicable, is based upon indicative market values provided by one of our lenders. The indicative prices provided to us at April 30, 2025 and January 31, 2025 did not significantly differ from par value.

The estimated fair values of our 2021 Notes were approximately $300.0 million and $298.0 million at April 30, 2025 and January 31, 2025, respectively. The estimated fair values of the 2021 Notes were determined based on quoted bid and ask prices in the over-the-counter market in which the 2021 Notes traded. We consider these inputs to be within Level 2 of the fair value hierarchy.

Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.

Investments

During the three months ended April 30, 2024, we completed the acquisition of a privately-held company in which we previously held a SAFE investment of approximately $1.7 million. The SAFE agreement entitled us to receive shares upon the company’s qualified equity financing, calculated by dividing the SAFE purchase amount by the Discount Price (as such term is defined in the SAFE), or in a liquidity event, a cash payment equal to the greater of (a) the SAFE purchase amount or (b) the amount payable on the number of shares valued at the Liquidity Price (as such term is defined in the SAFE). The investment was carried at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer and was included within other assets on the consolidated balance sheets as of January 31, 2024. The approximately $1.7 million acquisition date fair value of the SAFE was included in the measurement of the consideration transferred. The company and its results of operations are now consolidated in our condensed consolidated financial statements, and the SAFE investment was removed from our condensed consolidated balance sheet as of April 30, 2024. Please refer to Note 5, “Business Combinations and Asset Acquisitions” for further discussion related to this acquisition.

The carrying amount of our noncontrolling equity investments in privately-held companies without readily determinable fair values was $4.7 million as of April 30, 2025 and January 31, 2025. These investments are included within other assets on the condensed consolidated balance sheets. There were no observable price changes in our investments in privately-held companies during the three months ended April 30, 2025 and 2024. We did not recognize any impairments during the three months ended April 30, 2025 and 2024.