v3.26.1
INCOME TAXES
 12 Months Ended
Jan. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Loss before income tax expense is as follows (in thousands):
Year Ended January 31,
202620252024
United States$(389,326)$(206,209)$(345,485)
Foreign(6,596)34,701 19,361 
Loss before income tax expense$(395,922)$(171,508)$(326,124)
The components of income tax expense are as follows (in thousands):
Year Ended January 31,
202620252024
Current:
Federal$— $(259)$(135)
State259 128 36 
Foreign13,155 9,700 8,751 
Total current tax expense13,414 9,569 8,652 
Deferred:
Federal— — — 
State11 2 (52)
Foreign(11,317)(1)(3,172)
Total deferred tax expense (benefit)(11,306)1 (3,224)
Total income tax expense$2,108 $9,570 $5,428 
During the years ended January 31, 2026 and 2025, certain non-US earnings that could be distributed tax efficiently have not been permanently reinvested where earned. As of January 31, 2026 and 2025, the Company’s deferred tax liability for additional taxes that would be incurred upon repatriation of the earnings that are no longer permanently reinvested was not material.
The income tax expense differs from the amount computed by applying the federal statutory income tax rate to income before taxes as follows (in thousands):
Year Ended January 31,
202620252024
Loss before income tax expense$(395,922)$(171,508)$(326,124)
Expected tax benefit at Federal Rate of 21%(83,144)(36,017)(68,486)
State taxes273 130 (16)
Taxes on foreign earnings3,224 2,412 1,513 
Stock-based compensation2,833 4,943 4,811 
Disallowed interest on debt31,749 3,229 11,082 
Research and development credits(2,771)(3,912)(4,102)
Effects of cross-border tax laws1,482 3,476 343 
Non-deductible expenses26,488 1,484 (147)
Change in valuation allowance21,974 33,825 60,430 
Total income tax expense$2,108 $9,570 $5,428 
The components of net deferred tax assets and liabilities consisted of the following (in thousands):
Year Ended January 31,
20262025
Deferred tax assets:
Net operating loss carryforwards$222,333 $211,217 
Research and development credits20,508 18,156 
Reserves and accruals45,349 23,841 
Depreciation and amortization140 611 
Capitalized research and development costs57,838 52,012 
Operating lease liabilities9,817 12,100 
Stock-based compensation36,764 41,834 
Total deferred tax assets392,749 359,771 
Less: Valuation allowance(369,044)(336,627)
Net deferred tax assets23,705 23,144 
Deferred tax liabilities:
Operating lease right-of-use asset(8,527)(10,499)
Reserves and accruals(164)(45)
Depreciation and amortization(4,455)(13,164)
Stock-based compensation(341)(621)
Total deferred tax liabilities(13,487)(24,329)
Total net deferred tax assets (liabilities)$10,218 $(1,185)
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, the Company believes it is more likely than not that a portion of its net deferred tax assets may not be realized in the future. Accordingly, the Company established a full valuation allowance against its U.S. federal, certain states, and certain foreign deferred tax assets. The gross change in the total valuation allowance for the years ended January 31, 2026, 2025, and 2024 was an increase of approximately $32.4 million, $39.1 million, and $69.9 million respectively.
On July 4, 2025, the U.S. government enacted the H.R.1 Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”). OBBBA includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The provisions enacted by OBBBA did not result in a material impact to our provision for income taxes for the year ended January 31, 2026.
As of January 31, 2026, the Company had approximately $841.5 million of federal, $702.2 million of state, and $19.8 million of foreign net operating loss carryforwards as reported on our tax returns available to reduce future taxable income. Of the $841.5 million federal net operating loss carryforwards, $826.4 million may be carried forward indefinitely with utilization limited to 80% of taxable income, and the remaining $15.1 million will begin to expire in 2036. State NOL carryforwards will begin to expire in 2027, unless utilized. The foreign net operating loss carryforwards will carryforward indefinitely. As of January 31, 2026, the Company also had federal and state research and development tax credit carryforwards as reported on our tax returns of approximately $17.0 million and $13.2 million, respectively. The federal tax credits will expire at various dates beginning in 2036, unless utilized. The state tax credits do not expire and will carry forward indefinitely until utilized.
As of January 31, 2025, the Company had approximately $805.0 million of federal, $628.6 million of state, and $20.0 million of foreign net operating loss carryforwards as reported on our tax returns available to reduce future taxable income. Of the $805.0 million federal net operating loss carryforwards, $789.9 million may be carried forward indefinitely with utilization limited to 80% of taxable income, and the remaining $15.1 million will begin to expire in 2036. State NOL carryforwards will begin to expire in 2027, unless utilized. The foreign net operating loss carryforwards will carryforward indefinitely. As of January 31, 2025, the Company also had federal and state research and development tax credit carryforwards as reported on our tax returns of approximately $15.5 million and $11.1 million, respectively. The federal tax credits will expire at various dates beginning in 2036, unless utilized. The state tax credits do not expire and will carry forward indefinitely until utilized.
Federal and state tax laws impose substantial restrictions on the utilization of the net operating loss and credit carryforwards in the event of an ownership change as defined in Section 382 of the Internal Revenue Code. Accordingly, the Company’s ability to utilize these carryforwards may be limited as a result of such ownership change. The Company has determined that it has experienced multiple ownership changes and, as a result, the annual utilization of its net operating loss carryforwards and other pre-change attributes will be subject to limitation. However, the Company does not expect that the annual limitations will significantly impact its ability to utilize its net operating loss or tax credit carryforwards prior to expiration. Subsequent ownership changes in respect to these tax attributes may further affect the limitation in future years.
The Company recognizes uncertain tax positions in the consolidated financial statements if that position is more likely than not of being sustained upon audit, based on the technical merits of the position. In the preparation of income tax returns in federal, foreign, and state jurisdictions, the Company asserts certain tax positions based on its understanding and interpretation of income tax laws. The taxing authorities may challenge such positions, and the resolution of such matters could result in recognition of income tax expense in the Company’s consolidated financial statements. As of January 31, 2026, 2025 and 2024, the Company had unrecognized tax benefits of $10.9 million, $9.5 million, and $8.8 million, respectively, of which $2.3 million, $1.9 million, and $2.4 million, respectively, if recognized, would favorably impact the effective tax rate.
The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):
Year Ended January 31,
202620252024
Beginning balance$9,457 $8,783 $7,477 
Additions based on tax position related to the current year1,398 1,641 1,521 
Additions for tax positions for the prior year307 68 361 
Decrease related to prior year tax positions(159)(241)(386)
Decrease related to expiration of statute of limitations
(99)(794)(190)
Ending balance$10,904 $9,457 $8,783 
The Company includes interest and penalties related to unrecognized tax benefits through income tax expense. As of January 31, 2026 and 2025, the amount of accrued interest and penalties related to uncertain tax positions was $0.6 million and $0.4 million.
Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next 12 months due to tax examination changes, settlement activities, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months.
The Company files federal, state, and foreign tax returns with varying statutes of limitations. The tax years since inception of the Company in 2015 remain open to examination due to the carryover of unused net operating losses and tax credits.