Income Taxes |
3 Months Ended |
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Apr. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our provision for income taxes for interim periods is determined using an estimate of our annual effective tax rate as prescribed under ASC 740, “Income Taxes”, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment, which results in a provision for or benefit from income taxes in the current quarter. We recorded an income tax provision of $39.6 million and $1.7 million for the three months ended April 30, 2026 and 2025. In the three months ended April 30, 2026, the tax provision was driven by U.S. and foreign earnings and expense related to stock-based compensation. In the three months ended April 30, 2025, the tax provision was driven by U.S. and foreign earnings, partially offset by excess tax benefits from stock-based compensation. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The legislation included significant tax law changes, including the restoration of immediate expensing for domestic research and development costs. The impact of these changes are included in our tax provision and have resulted in additional tax expense in the three months ended April 30, 2026 compared to the same period in 2025. We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment, we consider both positive and negative evidence 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 the deferred tax assets will not be realized. As of April 30, 2026, we continue to maintain a valuation allowance against our California deferred tax assets. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis. As of April 30, 2026, our gross unrecognized tax benefits totaled $105.3 million, excluding related accrued interest and penalties, of which $84.8 million would impact the effective tax rate if recognized. Our policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect material changes to our gross unrecognized tax benefits within the next 12 months.
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