v3.26.1
Fair Value Measurements
 3 Months Ended
May 02, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
Level 2 — Other inputs that are directly or indirectly observable in the marketplace.
Level 3 — Unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The tables below set forth, by level, the Company’s assets that are measured at fair value on a recurring basis. The tables do not include assets that are measured at historical cost or any basis other than fair value (in millions):

 Fair Value Measurements at May 2, 2026
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits$— $667.2 $— $667.2 
Prepaid expenses and other current assets:
Forward stock purchase contract— — 81.1 81.1 
Other non-current assets:
Marketable equity investments40.3 — — 40.3 
Securities under the NQDC plan
7.0 — — 7.0 
Severance pay fund— 0.8 — 0.8 
Total assets$47.3 $668.0 $81.1 $796.4 
Liabilities
Other non-current liabilities:
Contingent consideration liability
$— $— $647.6 $647.6 
Total liabilities$— $— $647.6 $647.6 

 Fair Value Measurements at January 31, 2026
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits$— $72.7 $— $72.7 
Other non-current assets:
Marketable equity investments21.7 — — 21.7 
Securities under the NQDC plan3.9 — — 3.9 
Severance pay fund— 0.7 — 0.7 
Total assets$25.6 $73.4 $— $99.0 
The Company’s Level 1 assets include marketable equity investments and securities under the Company’s non-qualified deferred compensation (“NQDC”) plan, which are classified as other non-current assets and valued primarily using quoted market prices. The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, the severance pay fund is classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The contingent consideration liability associated with the Celestial acquisition is classified as Level 3 in the fair value hierarchy as the Company uses unobservable inputs in estimating the fair value using the Monte Carlo simulation valuation model. Critical estimates and inputs used for the valuation of contingent consideration include forecasted revenue, probability of achievement, stock price volatility, the Company’s stock price and other relevant assumptions and inputs. A significant change in any of these assumptions or relevant inputs could have a material impact to the fair value of the contingent consideration liability. Under the contingent consideration arrangement, the maximum potential settlement is approximately $233.0 million of undiscounted cash consideration and approximately 22.4 million shares of the Company’s common stock. See “Note 4 – Business Combinations” for further information.

The following table presents the changes in contingent consideration liability (in millions):

Balance at January 31, 2026$— 
Initial measurement on acquisition date 315.8 
Change in fair value331.8 
Balance at May 2, 2026$647.6 

In April 2026, the Company entered into a cash‑settled forward stock purchase contract to manage its exposure to changes in the Company’s stock price related to the contingent consideration arrangement associated with the Celestial acquisition. The contract has a notional amount of $300.0 million and a term of twelve months. The forward stock purchase contract is classified within Level 3 of the fair value hierarchy because the Monte Carlo simulation valuation model uses historical stock price volatility and the Company’s credit spread, both of which are unobservable inputs. The use of observable inputs in place of the unobservable inputs in the Company’s valuation model would not materially change the fair value. During the three months ended May 2, 2026, the Company recognized an unrealized gain of $81.1 million related to the forward stock purchase contract, which was recorded in Other expense, net in the Company’s unaudited condensed consolidated statements of operations.

The carrying value of investments in non-marketable equity securities recorded to fair value on a non-recurring basis is adjusted for observable transactions for identical or similar investments of the same issuer or for impairment. These securities relate to equity investments in privately-held companies. These items measured at fair value on a non-recurring basis are classified as Level 3 in the fair value hierarchy because the value is estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights and obligations of the securities held. As of May 2, 2026 and January 31, 2026, non-marketable equity investments had a carrying value of $140.1 million and $129.6 million, respectively, and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets. Unrealized net gain including observable price changes for the three months ended May 2, 2026 and May 3, 2025 were not material.

Fair Value of Debt

The Company classified its senior notes as Level 2 in the fair value hierarchy as there are quoted prices from less active markets for the notes. The estimated aggregate fair value of the unsecured senior notes was $5.0 billion at May 2, 2026 and $4.5 billion at January 31, 2026. See “Note 7 – Debt” for additional information.