FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jul. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of July 31, 2021 and January 31, 2021:

	July 31, 2021
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	112,027	$	—	$	—
Foreign currency forward contracts	—		37		—
Contingent consideration receivable	—		—		398
Total assets	$	112,027	$	37	$	398
Liabilities:
Foreign currency forward contracts	$	—	$	2	$	—
Contingent consideration - business combinations	—		—		7,632
Option to acquire noncontrolling interests of consolidated subsidiaries	—		—		3,500
Total liabilities	$	—	$	2	$	11,132

 

	January 31, 2021
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	342,090	$	—	$	—
Foreign currency forward contracts	—		136		—
Contingent consideration receivable	—		—		565
Total assets	$	342,090	$	136	$	565
Liabilities:
Foreign currency forward contracts	$	—	$	48	$	—
Interest rate swap agreements	—		17,881		—
Future tranche right	—		—		52,772
Contingent consideration - business combinations	—		—		15,704
Option to acquire noncontrolling interests of consolidated subsidiaries	—		—		3,250
Total liabilities	$	—	$	17,929	$	71,726

Schedule of Changes in the Estimated Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents the changes in the estimated fair value of the Future Tranche Right measured using significant unobservable inputs (Level 3) for the six months ended July 31, 2021 and 2020.

	Six Months Ended July 31,
(in thousands)	2021		2020
Fair value measurement at beginning of period	$	(52,772)	$	—
Fair value of future tranche right upon issuance of the Series A Preferred Stock	—		3,374
Change in fair value, recorded in other income (expense), net	15,810		(13,610)
Reclassification of future tranche right liability upon settlement	36,962		—
Fair value measurement at end of period	$	—	$	(10,236)

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 six months ended July 31, 2021 and 2020:

	Six Months Ended July 31,
(in thousands)	2021		2020
Fair value measurement at beginning of period	$	15,704	$	31,367
Contingent consideration liabilities recorded for business combinations	900		—
Changes in fair values, recorded in operating expenses	636		(2,449)
Payments of contingent consideration	(9,560)		(13,980)
Foreign currency translation and other	(48)		226
Fair value measurement at end of period	$	7,632	$	15,164

The following table presents the change in the estimated fair value of this liability, which is measured using Level 3 inputs, for the six months ended July 31, 2021 and 2020:

	Six Months Ended July 31,
(in thousands)	2021		2020
Fair value measurement at beginning of period	$	3,250	$	2,900
Change in fair value, recorded in operating expenses	250		150
Fair value measurement at end of period	$	3,500	$	3,050

Fair Value Measurement Inputs and Valuation Techniques

Significant inputs and assumptions used in the valuation model as of the issuance date, May 7, 2020, and immediately prior to the settlement date, April 6, 2021, are as follows:

	April 6,			May 7,
	2021			2020
Risk-free interest rate for preferred stock	2.35		%	1.31		%
Implied credit spread	6.78		%	10.78		%
Expected volatility	30.00		%	30.00		%
Verint common stock price	$	45.91		$	45.44