Income Taxes |
3 Months Ended |
|---|---|
Apr. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income (or loss) relates, changes in how the Company does business, and tax law developments. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to non-deductible stock-based compensation expense, state income taxes, and the income tax benefit from research and development credits. The Company recorded a provision for income taxes of $5.8 million and $0.8 million for the three months ended April 30, 2026 and 2025, respectively. The income tax provision during the three months ended April 30, 2026 was primarily due to an increase in pre-tax income, as well as tax deficiencies on stock-based compensation arising during the period. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence in the various jurisdictions in which it operates related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. During the year ended January 31, 2026, the Company achieved cumulative U.S. income, measured as pre-tax income adjusted for permanent book-tax differences. Based on all available positive and negative evidence, including the amount of the Company’s taxable income in recent years which is objective and verifiable, and taking into account anticipated future taxable earnings, the Company concluded that it was more likely than not that its U.S. federal and certain state deferred tax assets will be realizable which resulted in a release in its U.S. valuation allowance, with the exception of certain state deferred tax assets that will not be realized in the future. Furthermore, based on available evidence, the Company believes it is more likely than not that certain non-U.S. deferred tax assets will not be fully realizable in the future. The Company continues to maintain a valuation allowance against such deferred tax assets. The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.
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