Equity Method Investments

12 Months Ended

Jan. 31, 2026

Equity Method Investments and Joint Ventures [Abstract]

The Company accounts for its investments in unconsolidated investees using the equity method of accounting when it has the ability to exercise significant influence over the operating and financial policies of these entities. The Company did not have any equity method investments as of January 31, 2026. Midwestern and Sermons Tech were accounted for as equity method investments until June 11, 2025 and August 1, 2025, respectively, at which point the Company obtained a controlling financial interest and consolidated the entity pursuant to ASC 810. Refer to Note 4, Business Combinations for additional information.

The summarized financial information below presents the results of operations of Midwestern, from February 1, 2025, through June 11, 2025, when the Company obtained a controlling financial interest:


	Year Ended
Statement of Operations	January 31, 2026
	(in thousands)
Total Revenues	$	5,755
Gross Profit		2,014
Income from operations		1,259
Net Income	$	1,133

Midwestern Interactive, LLC

On January 3, 2025, the Company acquired 8,000 common units of Midwestern, representing an 80.0% membership interest in the company, for a total purchase price of approximately $31.7 million, paid for with a combination of cash, Series A preferred units, and note issuances. The investment was determined to be an equity method investment due to the Company’s ability to exercise significant influence over Midwestern through its equity investment and representation on Midwestern’s board of directors. The Company did not consolidate Midwestern under ASC 810 because the participating rights held by Midwestern’s minority interest holder limited the Company’s ability to unilaterally control the company.

In connection with the investment, the Company entered into a freestanding call option agreement (the “MW Call Option”) with the minority interest holder of Midwestern, Flourish. The MW Call Option originally granted the minority interest holder the right to repurchase all of the Company-owned Midwestern units during a 12-month exercise period which begins on the third anniversary of the Company’s acquisition of its interest. In June 2025, certain terms of the MW Call Option were modified, which, among other things, resulted in the Company obtaining a controlling financial interest in Midwestern. The option becomes exercisable on the third anniversary of the effective date of the investment and expires twelve months thereafter and is subject to earlier exercise if the Company (1) enters insolvency proceedings or (2) completes a qualified IPO that raises at least $50.0 million, and its shares trade above $36.00 per share for 90 consecutive days. The MW Call Option was recorded as a non-current liability on the Company’s consolidated balance sheets and is re-measured at fair value on a recurring basis with changes in fair value recorded in loss (gain) from change in fair value of financial instruments in the consolidated statements of operations. Refer to Note 7, Fair Value Measurements for more information regarding the value of the call option and Note 4, Business Combinations for additional information regarding the modification of the call option, which resulted in the Company’s consolidation of Midwestern.

The initial value of the Company’s investment in Midwestern was $31.7 million. Included in the initial carrying amount was a basis difference between the equity method investment recorded on the books of Gloo and the standalone books of Midwestern of approximately $5.4 million. This difference was primarily related to the recognition of intangible assets associated with Midwestern’s customer relationships and trademarks. Basis differences are amortized on a straight-line basis over the remaining life of the assets or liabilities to which they relate and are recognized as an adjustment to the Company’s share in the income or losses of Midwestern.

Sermons Tech LLC

On October 25, 2023, the Company entered into a purchase agreement to acquire 40,000 Class A units of Sermons Tech, representing a 43.2% equity interest, for total consideration of $2.0 million payable in multiple installments throughout 2023, 2024 and 2025. Sermons Tech is a limited liability company formed in July 2023 through a planned strategic relationship with the Company to commercialize the Sermons Tech software platform, an AI-driven tool designed to support church leaders and staff in developing and enhancing sermons and related media. Based on the size and nature of its investment, including its representation on Sermons Tech’s board of directors, the Company determined that it could exercise significant influence over Sermons Tech and therefore accounted for its investment under the equity method in accordance with ASC Topic 323, Investments – Equity Method and Joint Ventures (“ASC 323”).

On August 1, 2025, the Company entered into the UPA to acquire the remaining 56.8% equity interest in Sermons Tech from Flourish. The Company determined that the transaction represents a business combination under ASC 805 in which the Company is the accounting acquirer. Prior to the business combination, the Company held a noncontrolling equity interest in Sermons Tech, which was initially recorded at cost and subsequently adjusted each period for the Company’s share of Sermons Tech’s income or loss and any dividends paid in accordance with ASC 323. At the acquisition date, the Company remeasured its previously held equity interest and recognized a $2.6 million gain associated with the remeasurement of its previously held equity interest included in income (loss) from equity method investments, net in the consolidated statements of operations for the year ended January 31, 2026. Refer to Note 4, Business Combinations, for additional information regarding the Company’s acquisition of the remaining equity interest in Sermons Tech and subsequent consolidation.

Gloo Holdings, Inc. 10-K