Company: NAVN
Filing Date: 2025-07-28
Form Type: DRS/A
Source: 0001628279-25-000476
Chunk: 158

Company: Navan, Inc.
Filing Date: 2025-07-28
Form: DRS/A
Chunk 158
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 is recognized at the time we are entitled to these fees.

Our primary obligation to our payment partners is to connect them with user transaction volume on our physical and virtual corporate cards. We earn fees and other incentives from our payment partners based on the transaction dollar volume of each physical or virtual corporate card payment transaction processed, and we recognize revenue in the period each transaction occurs. We provide rebates to certain platform customers based on the dollar volume of payment transactions processed on our platform. Rebates paid to customers are recognized as a reduction to revenue.

#### Contract Acquisition Costs
We capitalize incremental costs of obtaining a contract with a customer if the costs are recoverable. These costs, which primarily consist of sales commissions, are deferred and amortized on a straight-line basis over the period of benefit, which we have estimated to be five years. We estimate the period of benefit by primarily taking into consideration the average customer life, among other factors. During fiscal 2025, we capitalized $23.7 million of contract acquisition costs and recognized related amortization expense of $5.6 million. Amortization expense is included in sales and marketing expense in the consolidated statements of operations.

#### Valuation of Embedded Derivative Liability
The embedded derivative liability is bifurcated from the convertible notes issued in June 2020. Refer to the section titled “—Debt Obligations” and in Note 8, “Debt” to the consolidated financial statements included elsewhere in this prospectus for further information regarding the convertible notes. The embedded derivative liability was measured at fair value on the date of issuance, and is remeasured to fair value each reporting period until conversion, with changes in the fair value recognized as a component of gain (loss) on fair value adjustments in the accompanying consolidated statements of operations. The fair value of the embedded derivative liability was computed using a combination of the income approach, the Black-Scholes option pricing model, a probability-weighted estimate of the time to conversion, and other Level 3 inputs. Significant management assumptions and estimates were involved in this determination. Refer to Note 3, “Fair Value Measurements” to the consolidated financial statements included elsewhere in this prospectus for further information regarding the significant inputs used in measuring the fair value of the embedded derivative liability.

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#### Stock-Based Compensation
Stock-based compensation expense is recognized over the requisite service period, which is generally over the vesting term of four years, on a straight-line basis for all stock-based payments that are granted to employees, non