Income Taxes (Tables)

12 Months Ended

Jul. 31, 2026

Schedule of Components of Income before Income Taxes

The following table presents the components of income before income taxes (in millions):


	Year Ended July 31,
	2026		2025		2024
United States	$	466	$	1,125	$	669
Foreign	70		471		319
Total	$	536	$	1,596	$	988

Schedule of Provision for (Benefit from) Income Taxes

The following table summarizes our provision for (benefit from) income taxes (in millions):


	Year Ended July 31,
	2026		2025		2024
Federal:
Current	$	95	$	517	$	213
Deferred	(165)		(300)		312
State:
Current	53		108		101
Deferred	(6)		(44)		(173)
Foreign:
Current	132		186		130
Deferred	120		(5)		(2,173)
Total	$	229	$	462	$	(1,590)

Schedule of Effective Income Tax Rate Reconciliation

We adopted the new income tax disclosures guidance effective in our year ended July 31, 2026 on a prospective basis. The following table presents a reconciliation from the federal statutory tax amount and rate to our provision for incomes taxes and effective tax rate under the requirements of the newly adopted income tax disclosures guidance (dollars in millions):


	Year Ended July 31, 2026
	Amount		Rate

Federal statutory tax	$	113	21.0	%
State taxes(1)(2)	41		7.7
Foreign tax effects:
Israel:
Statutory rate differential	(10)		(1.9)
Reduced statutory rate on qualifying income	93		17.3
Nondeductible expenses	22		4.1
Intercompany legal entity restructuring(2)	48		9.0
United Kingdom:
Statutory rate differential	20		3.7
Other jurisdictions	54		10.2
Effect of cross-border tax laws:
Global intangible low-taxed income(2)	(195)		(36.4)
Subpart F income	22		4.1
U.S. branch income (loss)(2)	(117)		(21.9)
Other	(23)		(4.1)
Tax credits:
Research and development tax credits	(58)		(10.8)
Changes in valuation allowance	(2)		(0.4)
Nontaxable or nondeductible items:
Shared-based compensation	49		9.1
Change in fair value of convertible senior notes and Capped Calls	118		22.0
Other	7		1.3
Changes in unrecognized tax benefits	86		16.0
Other:
Intercompany legal entity restructuring(2)	(39)		(7.3)
Total	$	229	42.7	%

(1)The state and local jurisdictions that contribute to the majority of the tax effect in this category include California, District of Columbia, Maryland, the state and city of New York, and Pennsylvania.

(2)These categories include impacts of an intercompany legal entity restructuring completed Q4 fiscal 2026 with a total impact of $45 million income tax benefit.

Prior to the adoption of the new income tax disclosure guidance, the following table presents a reconciliation from the federal statutory income tax rate to our effective tax rate:


	Year Ended July 31,
	2025		2024
Federal statutory rate	21.0	%	21.0	%
Effect of:
State taxes, net of federal tax benefit	3.8		3.1
Non-U.S. operations	2.2		9.5
Change in valuation allowance	1.1		(341.9)
U.S. effect of foreign deferred tax assets	11.2		175.8

Share-based compensation	(5.5)		(16.9)

Tax credits	(6.2)		(13.4)
Non-deductible expenses	1.2		1.5
Other, net	0.1		0.5
Total	28.9	%	(160.8)	%

Schedule of Components of Deferred Tax Assets and Liabilities

The following table presents the components of our deferred tax assets and liabilities as of July 31, 2026 and 2025 (in millions):


	July 31,
	2026		2025

Deferred tax assets:
Accruals and reserves	$	176	$	132
Operating lease liabilities	233		127
Deferred revenue	1,385		1,266
Net operating loss carryforwards	776		620
Tax credits	286		222
Capitalized research expenditures	879		895
Share-based compensation	148		106
Fixed assets and intangible assets	921		1,561

Gross deferred tax assets	4,804		4,929
Valuation allowance	(321)		(278)
Total deferred tax assets	4,483		4,651
Deferred tax liabilities:
U.S. effect of foreign deferred tax assets	(1,789)		(1,922)

Operating lease right-of-use assets	(208)		(108)
Deferred contract costs	(258)		(212)
Other deferred tax liabilities	(36)		(74)
Total deferred tax liabilities	(2,291)		(2,316)
Net deferred tax assets	$	2,192	$	2,335

Schedule of Gross Unrecognized Tax Benefits

The following table presents a reconciliation of the beginning and ending amount of our gross unrecognized tax benefits (in millions):


	Year Ended July 31,
	2026		2025		2024
Unrecognized tax benefits at the beginning of the period	$	572	$	454	$	360
Additions for tax positions taken in prior years	13		10		2
Reductions for tax positions taken in prior years	(1)		(11)		(20)
Additions for tax positions taken in the current year	140		119		112
Reduction relating to audit settlement	(5)		—		—
Unrecognized tax benefits at the end of the period	$	719	$	572	$	454

Schedule of Cash Flow, Supplemental Disclosures

Pursuant to adoption of the new income tax disclosures guidance, the following table presents the income taxes paid, net of refunds (in millions):


	Year Ended July 31, 2026
Federal	$	40
State
California	18
All Others	51
Foreign
Israel	24
Netherlands	13
India	16
All Others	37
Total	$	199