v3.25.1
Fair Value Measurements
 3 Months Ended
Apr. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.
Level 3. Significant unobservable inputs which are supported by little or no market activity.
The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of January 31, 2025 and April 30, 2025 because of the relatively short duration of these instruments.
The carrying amount of any outstanding borrowings on the Company's revolving credit facility approximates fair value due to the variable interest rates of the borrowings.
The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2025 and April 30, 2025 and indicates the fair value hierarchy of the valuation:
Fair value measurements on a recurring basis as of January 31, 2025
Level 1Level 2Level 3
Assets:
Money market accounts (included in cash and cash equivalents)$38,841 $— $— 
Time deposits (included in long-term prepaid expenses and other assets)339 — — 
Total assets$39,180 $— $— 
Fair value measurements on a recurring basis as of April 30, 2025
Level 1Level 2Level 3
Assets:
Money market accounts (included in cash and cash equivalents)$49,979 $— $— 
Time deposits (included in long-term prepaid expenses and other assets)350 — — 
Total assets$50,329 $— $— 
Liabilities:
Contingent consideration (included in accrued expenses and other current liabilities)$— $— $8,300 
Total liabilities$— $— $8,300 
All of the Company’s money market accounts are classified within Level 1 because the Company’s money market accounts are valued using quoted market prices in active exchange markets including identical assets.
The following table summarizes the change in fair value of the contingent consideration with significant unobservable inputs:
Three Months Ended April 30,
20242025
Balance, beginning of period$— $— 
Contingent consideration in connection with business acquisition— 8,100 
Changes in fair value — 200 
Balance, end of period$— $8,300 
The contingent consideration consists of the potential earn-out payment related to the Company's acquisition of Alphapack, Co. dba Sandbox Banking ("Sandbox Banking") on February 7, 2025 and has a maximum potential payment of up to $10.0 million. The fair value of the contingent consideration was determined using a probability weighted discounted cash flow model. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the estimated or actual achievement of the defined milestones. This contingent liability was classified as Level 3 within the fair value hierarchy. Changes in fair values of contingent consideration are recognized in general and administrative expenses on the Company's unaudited condensed consolidated statement of operations.
The unobservable inputs used in the valuation as of April 30, 2025 included expected payment in fiscal 2026, a weighted average expected achievement percentage of 86.7%, and a discount rate of 6.7%.
There were no transfers between levels of the fair value hierarchy during the three months ended April 30, 2024 and 2025.
Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company's assets measured at fair value on a non-recurring basis include the investments accounted for under the measurement alternative. Unrealized gains as a result of an observable price change were $0.0 million and $0.5 million for the three months ended April 30, 2024 and 2025, respectively. Cumulative unrealized gains were $0.7 million for investments accounted for under the measurement alternative as of April 30, 2025. There was no impairment recognized for the three months ended April 30, 2024 and 2025. Realized gains from the sale of an investment reflects the difference between the sales proceeds and the carrying value of the investment at the beginning of the period or the purchase date, if later. Realized gains were $0.0 million and $1.2 million for the three months ended April 30, 2024 and 2025, respectively. See Note 12 "Related-Party Transactions" for additional information on the sale of an investment.