Financial Analysis

Commitments and Contingencies Purchase Commitments Purchase commitments primarily consist of contractual arrangements for cellular, cloud hosting, and other subscription services. In July 2026, the Company entered into a new agreement with its third-party cloud infrastructure provider, replacing its prior arrangement. Under the terms of this agreement, the Company has committed to purchase an aggregate of $900 million of cloud hosting services through July 2031. There were no material contractual obligations outside the ordinary course of business that were entered into by the Company during the six months ended August 1, 2026. Letters of Credit As of August 1, 2026 and January 31, 2026 , the Company had $15.0 million and $15.8 million in letters of credit primarily issued to landlords for office spaces. These letters of credit renew annually and expire on various dates through 2031 . Litigation From time to time, the Company has been and may become involved in various legal proceedings in the ordinary course of its business, including in proceedings initiated by the Company, and has been and may be subject to third-party intellectual property infringement claims. Such proceedings require significant financial and operational resources, including the diversion of managements attention from the Companys business objectives. The Company continually evaluates uncertainties associated with litigation and records a charge equal to at least the minimum estimated liability for a los …

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Revenue comprises the following (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Subscription revenue $ 499,764 $ 383,890 $ 970,741 $ 743,494 Other revenue 8,673 7,590 16,540 14,870 Total revenue $ 508,437 $ 391,480 $ 987,281 $ 758,364

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Fair Value Measurements The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis, using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Inputs that are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. The follo …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The Company had an effective tax rate of 7.3% and (10.6%) for the three months ended August 1, 2026 and August 2, 2025, respectively, and 8.6% and (8.9%) for the six months ended August 1, 2026 and August 2, 2025, respectively. The Companys provision for income taxes was $1.3 million and $1.6 million for the three months ended August 1, 2026 and August 2, 2025, respectively, and $5.7 million and $3.2 million for the six months ended August 1, 2026 and August 2, 2025, respectively. The Company has incurred U.S. pretax losses in prior periods with most of the tax expense resulting from profit in the foreign entities. For the three and six months ended August 1, 2026 , the U.S. incurred pretax income with most of the tax expense resulting from profit in the foreign entities. The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date pretax income from recurring operations and adjusting for discrete tax items arising in that quarter. As of August 1, 2026 and January 31, 2026, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable for U.S. federal and state tax purposes. Accordingly, the Company established a full valuation allowance against its deferred tax assets for U.S. federal and state tax purposes. The Company intends to maintain a full valuation a …

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Leases The Company leases office space under operating lease agreements that are non-cancelable and have remaining lease terms ranging from one year to approximately five years. The Company is required to pay property taxes, insurance, and normal maintenance costs for certain of these facilities. Operating lease costs comprise the following (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Operating lease cost $ 4,082 $ 4,672 $ 8,139 $ 9,413 Short-term lease cost 330 357 673 710 Sublease income (140) (358) (357) (716) Total lease cost $ 4,272 $ 4,671 $ 8,455 $ 9,407 Supplemental information related to operating leases was as follows (in thousands, except for weighted-average data): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Cash paid for operating leases $ 4,635 $ 6,412 $ 9,366 $ 12,631 Right-of-use assets obtained under new or modified operating leases $ 4,107 $ $ 4,107 $ 6,768 As of August 1, 2026 January 31, 2026 Weighted-average remaining lease term (in years) 4.2 4.5 Weighted-average discount rate 6.68% 5.48% Future minimum lease payments included in the measurement of operating lease liabilities as of August 1, 2026 were as follows (in thousands): Fiscal Years Ending Amount Remainder of 2027 $ 7,438 2028 18,098 2029 17,722 2030 17,253 2031 14,884 2032 and thereafter 3,645 Total future minimum lease payments (1) 79,040 Less: imputed interest (9,548) Total op …

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Recently Adopted Accounting Pronouncement In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This standard provides a practical expedient for calculating current expected credit losses for current accounts receivable and current contract assets by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. The Company adopted ASU 2025-05, effective February 1, 2026, on a prospective basis and elected the practical expedient. The adoption did not have a material impact on the Companys condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . This standard requires disclosure of specified information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and amortization. As clarified on the subsequent amendment, ASU No. 2025-01, issued by the FASB in January 2025, this guidan ce is effective for the Companys Annual Report on Form 10-K for the fiscal year ending January 29, 2028, and subsequent interim periods . Early adoption is permitted and may be applied …

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Costs to Obtain and Fulfill a Contract Deferred Commissions Total deferred commissions as of August 1, 2026 and January 31, 2026 were $294.3 million and $261.9 million, respectively. The following table provides the amounts capitalized and amortized for commission costs for the periods presented (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Capitalized commission costs $ 44,883 $ 28,816 $ 79,346 $ 52,511 Amortization expense $ 24,075 $ 18,387 $ 46,970 $ 35,637 Connected Devices Total connected device costs, current and non-current, as of August 1, 2026 and January 31, 2026 were $489.5 million and $440.1 million, respectively. Amounts include deployed long-lived device assets that transfer ownership to the customer at the end of the contract, net of amortization, of $7.1 million and $8.1 million as of August 1, 2026 and January 31, 2026, respectively. The following table provides the amounts capitalized and amortized for connected device costs for the periods presented (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Capitalized connected device costs $ 71,508 $ 40,482 $ 129,224 $ 79,055 Amortization expense $ 40,355 $ 34,141 $ 79,825 $ 66,723 Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations Revenue Recognition Subscription revenue is generated from subscriptions to access the Connected Operations Platform. Subscr …

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Segment Information The Company has a single operating and reportable segment. The chief operating decision maker (CODM) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM makes operating decisions, assesses financial performance, and allocates resources based on consolidated operating income (loss) and consolidated net income (loss) as reported on the condensed consolidated statements of operations and comprehensive income (loss) . These financial metrics are used by the CODM to monitor budget versus actual results. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets. The table below presents selected financial information for the single operating segment (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Revenue $ 508,437 $ 391,480 $ 987,281 $ 758,364 Cost of revenue (1) (2) 33,074 26,201 68,137 50,644 Research and development (1) 66,346 55,753 133,902 111,975 Sales and marketing (1) (3) 164,029 130,921 320,274 254,368 General and administrative (1) 39,359 44,083 71,411 89,147 Stock-based compensation expense 96,385 81,135 173,856 158,214 Connected device costs 41,762 35,143 82,638 68,523 Cloud and cellular costs 37,219 25,537 75,419 47,636 Sales commissions 25,388 19,326 49,574 37,731 Segment operating income (loss) $ 4,875 $ (26,619) $ 12,070 $ (59,874) Interest income and other income, net (4) 12,654 11 …

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Equity The Company had reserved shares of common stock for future issuance as of August 1, 2026 and January 31, 2026, as follows: As of August 1, 2026 January 31, 2026 2015 Equity Incentive Plan: Options outstanding 5,392,622 5,406,188 2021 Equity Incentive Plan: Restricted stock units ( RSUs ) outstanding 21,421,172 17,331,045 Shares available for future grants 130,917,369 109,926,401 2021 Employee Stock Purchase Plan: Shares available for future issuance 31,230,281 26,034,934 Total shares of common stock reserved for future issuance 188,961,444 158,698,568 Employee Compensation Plans The Company currently has two equity incentive plans, the 2015 Equity Incentive Plan (the 2015 Plan) and the 2021 Equity Incentive Plan (the 2021 Plan). The 2015 Plan was terminated in connection with the adoption of the 2021 Plan in December 2021 but continues to govern the terms of outstanding stock options and RSUs that were granted prior to the termination of the 2015 Plan. The Company no longer grants equity awards pursuant to the 2015 Plan. 2021 Equity Incentive Plan In December 2021, the Board of Directors adopted and stockholders approved the 2021 Plan, which became effective in December 2021 in connection with the Companys initial public offering ( IPO) . The total number of shares of the Companys Class A common stock reserved for future grants as of August 1, 2026 includes 29,035,779 shares added on the first day of fiscal year 2027 pursuant to the annual automatic evergreen increase …

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