Income taxes |
3 Months Ended |
|---|---|
Apr. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes The Company follows Accounting Standards Codification ("ASC") 740-270, Income Taxes - Interim Reporting, for the computation and presentation of its interim period tax provision. Accordingly, management estimated the effective annual tax rate and applied this rate to pre-tax income through the end of the latest fiscal quarter to determine the interim income tax provision. For the three months ended April 30, 2026 and 2025, the Company recorded an income tax provision of $23.0 million and $17.0 million, respectively. This resulted in an effective income tax rate of 24.9% for the three months ended April 30, 2026, compared with an effective income tax rate of 24.0% for the three months ended April 30, 2025. For the three months ended April 30, 2026, discrete tax items impacting the effective tax rate were primarily due to tax benefit from stock-based compensation expense. For the three months ended April 30, 2025, discrete tax items impacting the effective tax rate were primarily due to tax benefit from stock-based compensation expense and changes to net state deferred tax liabilities due to state apportionment changes. As of April 30, 2026 and January 31, 2026, the Company’s total gross unrecognized tax benefit was $28.4 million and $27.4 million, respectively. If recognized, $25.0 million of the total gross unrecognized tax benefit would affect the Company's effective tax rate as of April 30, 2026. As of April 30, 2026, $17.2 million of federal income tax payable is included within accrued liabilities on the Company's condensed consolidated balance sheets. The Company files income tax returns with U.S. federal and state taxing jurisdictions and is currently under examination by the state of California. This tax examination may lead to ordinary course adjustments or proposed adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards. As a result of the Company's net operating loss carryforwards and tax credit carryforwards, the Company remains subject to examination by one or more jurisdictions for tax years after 2006.
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