Taxes on Earnings |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxes on Earnings | Taxes on Earnings (Provision) Benefit for Taxes For the three months ended July 31, 2026 and 2025, the Company recorded income tax expense of $222 million and income tax benefit of $17 million, respectively, which reflects an effective tax rate of 12.6% and (6.5)%, respectively. For the nine months ended July 31, 2026 and 2025, the Company recorded income tax expense of $278 million and $94 million, respectively, which reflects an effective tax rate of 9.6% and (359.9)%, respectively. The effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but is also impacted by discrete tax adjustments during each fiscal period. For the nine months ended July 31, 2025, the effective tax rate also included the effects of the non-deductible goodwill impairment. For the three and nine months ended July 31, 2026, the Company recorded $84 million and $41 million of net income tax charges, respectively, related to various items discrete to the period. For the three months ended July 31, 2026, this amount primarily included $118 million of net income tax charges resulting from the gain on the H3C divestiture, partially offset by $44 million of net excess tax benefits related to stock-based compensation. For the nine months ended July 31, 2026, this amount primarily included $118 million of net income tax charges resulting from the gain on the H3C divestiture, partially offset by $66 million of net excess tax benefits related to stock-based compensation. For the three and nine months ended July 31, 2025, the Company recorded $106 million and $217 million of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances, $21 million of net income tax benefits related to costs incurred as a result of the acquisition of Juniper Networks, and $4 million of net income tax benefits related to acquisition, disposition and other related charges. For the nine months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances, $33 million of net income tax benefits related to the cost reduction program, $33 million of net income tax benefits related to the favorable resolution of non-U.S. tax litigation matters, $30 million of net excess tax benefits related to stock-based compensation, $29 million of net income tax benefits related to costs incurred as a result of the acquisition of Juniper Networks, $16 million of net income tax benefits related to the settlement of U.S. tax audit matters, and $9 million of net income tax benefits related to acquisition, disposition and other charges, partially offset by $22 million of net income tax charges resulting from the gain on the Communications Technology Group (“CTG”) divestiture. Uncertain Tax Positions As of July 31, 2026 and October 31, 2025, the amount of unrecognized tax benefits was $1.1 billion and $474 million, respectively, of which up to $522 million and $326 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods. Unrecognized tax benefits increased $204 million due to the current and prior H3C divestitures. For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. The Company recognized $10 million of interest expense and $7 million of interest income for the nine months ended July 31, 2026 and 2025, respectively. As of July 31, 2026 and October 31, 2025, the Company had accrued $52 million and $42 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussion and negotiation with tax authorities regarding tax matters in various jurisdictions. The Company is no longer subject to U.S. federal tax audits for years prior to 2020. The Internal Revenue Service (“IRS”) is conducting audits of the Company's fiscal 2020 through 2022 and fiscal 2024 through 2025 U.S. federal income tax returns. During the first quarter of fiscal 2026, the IRS issued notices of proposed adjustments (“NOPAs”) for fiscal 2020, 2021, and 2022 relating to the Company’s intercompany transfer pricing. During the second quarter of fiscal 2026, the Company submitted a formal settlement offer to the IRS to facilitate the closing of the audit and recorded increased reserves for unrecognized tax benefits of $318 million. The impact of the increase in reserves is almost entirely offset with a valuation allowance release, and the net impact to income tax expense for the three and nine months ended July 31, 2026 was not material. It is reasonably possible that the IRS audit for fiscal 2020 through 2022 may be concluded in the next 12 months, and it is reasonably possible that existing unrecognized tax benefits related to these years may be reduced by an amount up to $366 million within the next 12 months; the majority of these unrecognized tax benefits are offset by adjustments to foreign tax credits that carry a full valuation allowance, which does not affect the Company’s effective tax rate. With respect to major state and foreign tax jurisdictions, the Company is no longer subject to tax authority examinations for years prior to 2005. As a result of the IRS audit for fiscal 2020 through 2022, the Company recorded additional state unrecognized tax benefits of $51 million for the changes to federal taxable income. It is reasonably possible that certain foreign and state tax issues may be concluded in the next 12 months, including issues involving resolution of certain intercompany transactions and other matters. Juniper Networks is no longer subject to U.S. federal tax audits for years prior to 2022. The IRS is conducting an audit of Juniper’s 2024 U.S. federal income tax return. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:
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