v3.26.1
Fair Value Measurements
 12 Months Ended
Jul. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2026 and 2025 (in millions):
July 31, 2026July 31, 2025
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents:
Money market funds $1,514 $— $— $1,514 $1,206 $— $— $1,206 
Commercial paper— 123 — 123 — 169 — 169 
Total cash equivalents1,514 123 — 1,637 1,206 169 — 1,375 
Short-term investments:
Commercial paper— 10 — 10 — 15 — 15 
Corporate debt securities— 374 — 374 — 584 — 584 
U.S. government and agency securities— 2 — 2 — 6 — 6 
Non-U.S. government and agency securities— — — — — 3 — 3 
Asset-backed securities— 6 — 6 — 22 — 22 
Total short-term investments— 392 — 392 — 630 — 630 
Long-term investments:
Corporate debt securities— 3,843 — 3,843 — 4,050 — 4,050 
U.S. government and agency securities— 68 — 68 — 164 — 164 
Non-U.S. government and agency securities— 21 — 21 — 26 — 26 
Asset-backed securities— 903 — 903 — 1,315 — 1,315 
Total long-term investments— 4,835 — 4,835 — 5,555 — 5,555 
Prepaid expenses and other current assets:
Foreign currency forward contracts— 18 — 18 — 58 — 58 
Total prepaid expenses and other current assets— 18 — 18 — 58 — 58 
Other assets:
Foreign currency forward contracts— — — — — 3 — 3 
Capped calls related to convertible senior notes— 153 — 153 — — — — 
Total other assets— 153 — 153 — 3 — 3 
Total assets measured at fair value$1,514 $5,521 $— $7,035 $1,206 $6,415 $— $7,621 
July 31, 2026July 31, 2025
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Accrued and other liabilities:
Foreign currency forward contracts$— $24 $— $24 $— $4 $— $4 
Deferred compensation liability
5 — — 5 2 — — 2 
Contingent consideration
— — 116 116 — — 276 276 
Total accrued and other liabilities5 24 116 145 2 4 276 282 
Long-term convertible senior notes— 1,774 — 1,774 — — — — 
Other long-term liabilities:
Deferred compensation liability
400 — — 400 57 — — 57 
Contingent consideration
— — 90 90 — — 238 238 
Total other long-term liabilities400 — 90 490 57 — 238 295 
Total liabilities measured at fair value$405 $1,798 $206 $2,409 $59 $4 $514 $577 
The fair value of our contingent consideration liability is estimated using a discounted cash flow valuation technique. We consider the fair value of our contingent consideration liability to be a Level 3 measurement as we use unobservable inputs in determining discounted cash flows to estimate the fair value. The significant unobservable inputs include an estimate of future cash payments related to customers entering into qualified new transactions as well as a risk-adjusted discount rate used to present value the expected cash flows. A significant change in any of these assumptions could have a material impact to the fair value of our contingent consideration liability.
In June 2025, we amended the terms of our contingent consideration arrangement with International Business Machines Corporation (“IBM”). During the three months ended July 31, 2025, we reduced our estimate of future cash payments based on the amended terms and our quarterly assessment of assumptions. During the year ended July 31, 2026, we reduced our estimate of future cash payments based on our quarterly assessment of assumptions. Assumptions considered during our quarterly assessment include the magnitude and likelihood of customers entering into qualified new transactions, the competitive industry environment, and current market conditions.
The following table presents a reconciliation of our contingent consideration liability (in millions):
Year Ended July 31,
20262025
Contingent consideration liability at the beginning of the period
$514 $— 
Initial valuation on the acquisition date
— 649 
Change in fair value
(117)(135)
Payments(191)— 
Contingent consideration liability at the end of the period
$206 $514 
The total estimated fair value of our financing receivables approximates their carrying amounts as of July 31, 2026 and 2025. We consider the fair value of our financing receivables to be a Level 3 measurement as we use unobservable inputs in determining discounted cash flows to estimate the fair value.