Business Combinations

3 Months Ended

Apr. 30, 2025

DocFox, Inc. (“DocFox”)

On March 20, 2024 (the "DocFox Acquisition Date"), the Company acquired the outstanding equity interests of DocFox, which provides a solution to automate onboarding experiences for commercial and business banking. The Company acquired DocFox for its complementary product set, which helps simplify and automate the onboarding and account opening process. The Company has included the financial results of DocFox in the unaudited condensed consolidated statements of operations from the DocFox Acquisition Date. Including the $2.0 million in post combination expense referenced below, transaction costs associated with the DocFox acquisition were approximately $3.9 million and were recorded in general and administrative expenses.

The Company paid a total of $74.3 million in cash as of the DocFox Acquisition Date. Included in the total cash paid was $6.2 million for DocFox common stock options that were cash settled on the DocFox Acquisition Date. The $6.2 million fair value of the DocFox common stock options was allocated between consideration transferred and post combination expense in the amounts of $4.2 million and $2.0 million, respectively. As there was no future service requirement due to accelerated vesting of these options, the entire $2.0 million was recorded as transaction cost immediately following the acquisition and not in consideration transferred. The $2.0 million is included within general and administrative expenses. The estimated fair value of the consideration transferred was $72.4 million on the DocFox Acquisition Date.

In addition, the Company issued 198,505 RSUs with an approximate fair value of $6.1 million to certain employees of DocFox, which will vest over four years subject to such employees' continued employment. The RSUs will be recorded as stock-based compensation expense post-acquisition as the RSUs vest and has been excluded from the purchase consideration.

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values at the DocFox Acquisition Date. Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

The following table summarizes the final fair values of assets acquired and liabilities assumed as of the DocFox Acquisition Date:


	Fair Value
Cash and cash equivalents	$	1,400
Accounts receivable	1,898
Operating lease right-of-use assets, net	405
Other current and noncurrent assets	444
Intangible assets	24,600
Goodwill	56,302
Accounts payable, accrued expenses, and other liabilities, current and noncurrent	(3,495)
Deferred revenue, current and noncurrent	(3,505)
Operating lease liabilities, current and noncurrent	(405)
Deferred income taxes	(5,279)
Net assets acquired	$	72,365

During the three months ended April 30, 2025, within the one year measurement period, we finalized the fair value of the assets acquired and liabilities assumed in the acquisition, and the amounts presented above are now final. The Company recorded measurement period adjustments that included a $1.0 million adjustment to decrease goodwill for a $1.0 million deferred income tax adjustment.

The following table sets forth the components of the fair value of identifiable intangible assets and their estimated useful lives over which the acquired intangible assets will be amortized on a straight-line basis, as this approximates the pattern in which economic benefits of the assets are consumed as of the DocFox Acquisition Date:


	Fair Value		Useful Life
Trade name	$	200	1 year
Customer relationships	16,400		10 years
Developed technology	8,000		5 years
Total intangible assets subject to amortization	$	24,600

Developed technology represents the fair value of DocFox's technology. Customer relationships represent the fair value of the underlying relationships with DocFox's customers. Trade names represents the fair value of DocFox’s company name.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce. The goodwill is not deductible for tax.

The Company has not disclosed pro-forma revenue and earnings attributable to DocFox as they did not have a material effect on the Company’s consolidated financial statements.

Integrated Lending Technologies, LLC (“ILT”)

On April 1, 2024 (the "ILT Acquisition Date”), the Company acquired all outstanding membership interests of ILT, which provides consumer loan origination software that streamlines direct and indirect lending operations. The Company acquired ILT for its complementary products. The Company has included the financial results of ILT in the unaudited condensed consolidated statements of operations from the ILT Acquisition Date. Transaction costs associated with the ILT acquisition were approximately $0.9 million and were recorded in general and administrative expenses.

The Company paid a total of $19.9 million in cash on the ILT Acquisition Date, subject to a net working capital adjustment. The net working capital adjustment was finalized in July 2024, resulting in an increase to the purchase price of $0.1 million which was recorded to goodwill.

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired, and liabilities assumed were recorded at their estimated fair values at the ILT Acquisition Date. Any excess

consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

The following table summarizes the final fair values of assets acquired and liabilities assumed as of the ILT Acquisition Date:


	Fair Value
Cash and cash equivalents	$	164
Accounts receivable	343
Intangible assets	8,660
Goodwill	11,111
Accounts payable, accrued expenses, and other liabilities, current and noncurrent	(240)
Net assets acquired	$	20,038

During the fiscal year ended January 31, 2025, within the one year measurement period, we finalized the fair value of the assets acquired and liabilities assumed in the acquisition, and the amounts presented above are final.


	Fair Value		Useful Life
Trade name	$	210	1 year
Customer relationships	5,870		10 years
Developed technology	2,580		5 years
Total intangible assets subject to amortization	$	8,660

Developed technology represents the fair value of ILT’s technology. Customer relationships represent the fair value of the underlying relationships with ILT’s customers. Trade name represents the fair value of ILT’s company name.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $11.1 million is deductible for tax purposes.

The Company has not disclosed pro-forma revenue and earnings attributable to ILT as they did not have a material effect on the Company’s consolidated financial statements.

Artesian Solutions Limited ("FullCircl")

On November 5, 2024 (the "FullCircl Acquisition Date"), the Company acquired the outstanding equity interests of FullCircl, which provides an onboarding and customer lifecycle intelligence platform. The Company acquired FullCircl for its complementary products and believes this will provide greater value for new and existing customers. The Company has included the financial results of FullCircl in the unaudited condensed consolidated statements of operations from the FullCircl Acquisition Date. Transaction costs associated with the FullCircl acquisition were approximately $3.6 million and were recorded in general and administrative expenses.

The purchase consideration was $142.4 million, of which the Company paid a total of $129.2 million in cash at the FullCircl Acquisition Date. The purchase consideration includes a deferred payment of $15.0 million, with a present value of $13.2 million at the FullCircl Acquisition Date, relating to an indemnity holdback amount to be paid in 24 months following the FullCircl Acquisition Date which is included in other long-term liabilities on the unaudited condensed consolidated balance sheets.

In addition, the Company issued 52,877 RSUs with an approximate fair value of $2.0 million to certain employees of FullCircl, which will vest over four years subject to such employees' continued employment. The RSUs will be recorded as stock-based compensation expense post-acquisition as the RSUs vest and has been excluded from the purchase consideration.

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values at the FullCircl Acquisition Date. Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is complete. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the FullCircl Acquisition Date:


	Fair Value
Cash and cash equivalents	$	3,182
Accounts receivable	1,814
Property and equipment, net	66
Operating lease right-of-use assets, net	198
Other current and noncurrent assets	211
Intangible assets	37,000
Goodwill	117,610
Accounts payable, accrued expenses, and other liabilities, current and noncurrent	(3,776)
Deferred revenue, current and noncurrent	(4,773)
Operating lease liabilities, current and noncurrent	(198)
Deferred income taxes	(8,925)
Net assets acquired	$	142,409

During the three months ended April 30, 2025, the Company recorded measurement period adjustments that included a $0.3 million adjustment to decrease goodwill for a $0.3 million deferred income tax adjustment.

Due to the timing of the transaction, initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2026, but no later than one year from the FullCircl Acquisition Date. The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available, valuations are finalized and the tax returns for the pre-acquisition period are completed. The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the review and valuation of intangible assets (including key assumptions, inputs and estimates), (ii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, and (iii) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities, including uncertain tax positions. As the initial acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available. The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. The Company will continue to evaluate these items until they are satisfactorily resolved and make necessary adjustments, within the allowable measurement period.

The following table sets forth the components of the preliminary fair value of identifiable intangible assets and their estimated useful lives over which the acquired intangible assets will be amortized on a straight-line basis, as this approximates the pattern in which economic benefits of the assets are consumed as of the FullCircl Acquisition Date:


	Fair Value		Useful Life
Trade name	$	1,100	1 year
Customer relationships	26,500		10 years
Developed technology	9,400		5 years
Total intangible assets subject to amortization	$	37,000

Developed technology represents the preliminary fair value of FullCircl's technology. Customer relationships represent the preliminary fair value of the underlying relationships with FullCircl's customers. Trade names represents the preliminary fair value of FullCircl’s company name. The Company continues to assess the rates used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce. The goodwill is not expected to be deductible for tax.

The Company has not disclosed pro-forma revenue and earnings attributable to FullCircl as they did not have a material effect on the Company’s consolidated financial statements.

Sandbox Banking

On February 7, 2025 (the "Sandbox Acquisition Date"), the Company acquired the outstanding equity interests of Sandbox Banking, a digital transformation leader serving the financial services industry. The Company acquired Sandbox Banking to strengthen the Company's ability to enhance data connectivity. The Company has included the financial results of Sandbox Banking in the consolidated statements of operations from the Sandbox Acquisition Date. Transaction costs associated with the Sandbox Banking acquisition were approximately $1.4 million and were recorded in general and administrative expenses.

The Sandbox Acquisition Date estimated fair value of the consideration transferred is as follows:


	Fair Value
Cash consideration (net of working capital adjustments)	$	53,488
Noncash consideration for settlement of preexisting contract	1,354
Contingent consideration	8,100
	$	62,942

As of April 30, 2025, the cash consideration and working capital adjustments were finalized, resulting in final net cash consideration of $53.5 million after working capital adjustments of $0.5 million.

The preliminary purchase price also includes $8.1 million of contingent consideration whereby the Company may be required to pay up to $10.0 million subject to the achievement of certain targets over 18 months, subject to revision. Three earn-outs are payable based on achieving a certain increase in annual contract value, achieving connectivity between defined systems for certain customers and achieving defined development work. See Note 3 "Fair Value Measurements" for additional information on the fair value of the contingent consideration.

In addition, the Company issued 91,160 RSUs, in May 2025, with an approximate fair value of $2.1 million to certain employees of Sandbox Banking, which will vest over four years subject to such employees' continued employment. The RSUs will be recorded as stock-based compensation expense post-acquisition as the RSUs vest and has been excluded from the purchase consideration.

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values at the Sandbox Acquisition Date. Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is complete. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the Sandbox Acquisition Date:


	Fair Value
Cash and cash equivalents	$	3,330
Accounts receivable	1,020


Other current and noncurrent assets	106
Intangible assets	13,400
Goodwill	53,830
Accounts payable, accrued expenses, and other liabilities, current and noncurrent	(774)
Deferred revenue, current and noncurrent	(4,950)

Deferred income taxes	(3,020)
Net assets acquired	$	62,942

Due to the timing of the transaction, initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2026, but no later than one year from the Sandbox Acquisition Date. The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available, valuations are finalized and the tax returns for the pre-acquisition period are completed. The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the review and valuation of intangible assets (including key assumptions, inputs and estimates), (ii) finalizing the Company's review of certain assets acquired and liabilities assumed, (iii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, (iv) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities, including uncertain tax positions, and (v) finalizing the Company's review of the acquired contracts and related contract assets and liabilities. As the initial acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available. The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. The Company will continue to evaluate these items until they are satisfactorily resolved and make necessary adjustments, within the allowable measurement period.


	Fair Value		Useful Life
Trade name	$	400	1 year
Customer relationships	8,500		10 years
Developed technology	4,500		5 years
Total intangible assets subject to amortization	$	13,400

Developed technology represents the preliminary fair value of Sandbox Banking's technology. Customer relationships represent the preliminary fair value of the underlying relationships with Sandbox Banking's customers. Trade names represent the preliminary fair value of Sandbox Banking’s company name. The Company continues to assess the rates

used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce. The goodwill is not expected to be deductible for tax.

The financial results of Sandbox Banking since the Sandbox Acquisition Date are included in the Company's unaudited condensed consolidated financial statements and are not material to the Company. The Company has not disclosed pro-forma revenue and earnings attributable to Sandbox Banking as they did not have a material effect on the Company’s consolidated financial statements.