Salesforce, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS The following financial statements are filed as part of this Annual Report on Form 10-K: Page No. Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 54 Consolidated Balance Sheets 57 Consolidated Statements of Operations 58 Consolidated Statements of Comprehensive Income 59 Consolidated Statements of Stockholders’ Equity 60 Consolidated Statements of Cash Flows 61 Notes to Consolidated Financial Statements 63 53 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Salesforce, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Salesforce, Inc. (the Company) as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 2, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 54 Table of Contents Revenue Recognition Description of the Matter As described in Notes 1 and 2 to the consolidated financial statements, the Company recognizes revenue primarily from subscription and support services and professional services contracts in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts with its customers that may include promises to transfer multiple cloud services, software licenses, premium support and professional services. Significant judgment may be required by the Company in determining revenue recognition for these customer agreements, including the determination of whether products and services are considered distinct performance obligations and the determination of standalone selling prices, particularly for products and services that are not sold separately. Auditing the Company’s accounting for revenue contracts with customers required significant judgment to assess management’s determination of performance obligations and standalone selling prices. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify performance obligations and allocate the transaction price to those performance obligations, including controls over determining standalone selling prices. To test the Company’s judgments and conclusions related to the identification of performance obligations and determination of standalone selling prices, our audit procedures included, among others, obtaining an understanding of the Company’s various service offerings and evaluating management’s conclusions regarding which were distinct. We read a sample of executed contracts to assess management’s evaluation of significant terms, including the determination of distinct performance obligations, and the related standalone selling price. We evaluated the information utilized to determine standalone selling price and we tested the mathematical accuracy of the Company’s calculations. Business Combinations – Valuation of intangible assets Description of the Matter As described in Note 7 to the consolidated financial statements, the Company completed the acquisition of Informatica, Inc. during fiscal year 2026 for total net consideration of $9.6 billion. In connection with this acquisition, management recognized customer relationship and developed technology intangible assets of $3.5 billion. The valuation of the customer relationship and developed technology intangible assets is complex and judgmental due to the use of subjective assumptions in the valuation models used by management when determining their estimated fair value. In particular, the fair value estimates for the acquired assets are sensitive to changes in assumptions for revenue growth and operating expenses. Auditing management’s valuation of customer relationship and developed technology intangibles is complex due to the auditor judgement required to evaluate management’s assumptions used in determining the fair value of these assets. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the determination of the fair value of customer relationship and developed technology intangible assets. This included controls over management’s development of the assumptions described above. To test the estimated fair value of the customer relationship and developed technology intangible assets, we performed audit procedures that included, among others, evaluating the significant assumptions used by the Company to develop the forecasted revenue growth rates and projected operating expenses, including validating the completeness and accuracy of the underlying data supporting the assumptions and estimates. We performed sensitivity analyses to evaluate the changes in the fair value of the assets that would result from changes in the assumptions and compared the more sensitive significant assumptions used by management to current industry and competitor data, the Company’s own historical results and to the historical results of the acquired business. In addition, we involved a valuation specialist to assist in our evaluation of the methodology used by the Company and the significant assumptions underlying the fair value estimates. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2002. San Francisco, California March 2, 2026 55 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Salesforce, Inc. Opinion on Internal Control Over Financial Reporting We have audited Salesforce, Inc.’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Salesforce, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Informatica, Inc. (Informatica) and Regrello Corp. (Regrello), which are included in the 2026 consolidated financial statements of the Company and constituted approximately one percent of consolidated total assets and net assets, as of January 31, 2026, and less than one percent of consolidated total revenues and total operating expenses, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Informatica and Regrello. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2026, and the related notes and our report dated March 2, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Francisco, California March 2, 2026 56 Table of Contents Salesforce, Inc. Consolidated Balance Sheets (in millions) January 31, 2026 January 31, 2025 Assets Current assets: Cash and cash equivalents $ 7,327 $ 8,848 Marketable securities 2,238 5,184 Accounts receivable, net 14,339 11,945 Costs capitalized to obtain revenue contracts, net 2,075 1,971 Prepaid expenses and other current assets 2,243 1,779 Total current assets 28,222 29,727 Property and equipment, net 3,120 3,236 Operating lease right-of-use assets, net 2,003 2,157 Noncurrent costs capitalized to obtain revenue contracts, net 2,985 2,475 Strategic investments 7,591 4,852 Goodwill 57,941 51,283 Intangible assets acquired through business combinations, net 6,815 4,428 Deferred tax assets and other assets, net 3,628 4,770 Total assets $ 112,305 $ 102,928 Liabilities and stockholders’ equity Current liabilities: Accounts payable, accrued expenses and other liabilities $ 8,253 $ 6,658 Operating lease liabilities, current 548 579 Unearned revenue 24,317 20,743 Debt, current 4,000 0 Total current liabilities 37,118 27,980 Noncurrent debt 10,439 8,433 Noncurrent operating lease liabilities 2,189 2,380 Other noncurrent liabilities 3,417 2,962 Total liabilities 53,163 41,755 Commitments and contingencies (See Notes 6 and 14) Stockholders’ equity: Preferred stock, $ 0.001 par value; 5 shares authorized and none issued and outstanding 0 0 Common stock, $ 0.001 par value; 1,600 shares authorized, 1,073 and 1,056 shares issued as of January 31, 2026 and 2025, respectively, and 929 and 962 shares outstanding as of January 31, 2026 and 2025, respectively 1 1 Treasury stock, at cost ( 32,228 ) ( 19,507 ) Additional paid-in capital 68,835 64,576 Accumulated other comprehensive income (loss) 313 ( 266 ) Retained earnings 22,221 16,369 Total stockholders’ equity 59,142 61,173 Total liabilities and stockholders’ equity $ 112,305 $ 102,928 See accompanying Notes. 57 Table of Contents Salesforce, Inc. Consolidated Statements of Operations (in millions, except per share data) 4 Fiscal Year Ended January 31, 2026 2025 2024 Revenues: Subscription and support $ 39,388 $ 35,679 $ 32,537 Professional services and other 2,137 2,216 2,320 Total revenues 41,525 37,895 34,857 Cost of revenues (1)(2): Subscription and support 6,796 6,198 6,177 Professional services and other 2,474 2,445 2,364 Total cost of revenues 9,270 8,643 8,541 Gross profit 32,255 29,252 26,316 Operating expenses (1)(2): Research and development 5,993 5,493 4,906 Sales and marketing 14,345 13,257 12,877 General and administrative 3,000 2,836 2,534 Restructuring 586 461 988 Total operating expenses 23,924 22,047 21,305 Income from operations 8,331 7,205 5,011 Gains (losses) on strategic investments, net 1,017 ( 121 ) ( 277 ) Other income 172 354 216 Income before provision for income taxes 9,520 7,438 4,950 Provision for income taxes ( 2,063 ) ( 1,241 ) ( 814 ) Net income $ 7,457 $ 6,197 $ 4,136 Basic net income per share $ 7.85 $ 6.44 $ 4.25 Diluted net income per share $ 7.80 $ 6.36 $ 4.20 Shares used in computing basic net income per share 950 962 974 Shares used in computing diluted net income per share 956 974 984 (1) Amounts include amortization of intangible assets acquired through business combinations, as follows: Fiscal Year Ended January 31, 2026 2025 2024 Cost of revenues $ 692 $ 750 $ 978 Sales and marketing 995 901 891 (2) Amounts include stock-based compensation expense, as follows: Fiscal Year Ended January 31, 2026 2025 2024 Cost of revenues $ 553 $ 518 $ 431 Research and development 1,162 1,091 972 Sales and marketing 1,287 1,205 1,062 General and administrative 478 367 299 Restructuring 29 2 23 See accompanying Notes. 58 Table of Contents Salesforce, Inc. Consolidated Statements of Comprehensive Income (in millions) 4 Fiscal Year Ended January 31, 2026 2025 2024 Net income $ 7,457 $ 6,197 $ 4,136 Other comprehensive income (loss), net of reclassification adjustments: Foreign currency translation and other gains (losses) 543 ( 66 ) ( 11 ) Unrealized gains on marketable securities 44 31 83 Other comprehensive income, before tax 587 ( 35 ) 72 Tax effect ( 8 ) ( 6 ) ( 23 ) Other comprehensive income, net 579 ( 41 ) 49 Comprehensive income $ 8,036 $ 6,156 $ 4,185 See accompanying Notes. 59 Table of Contents Salesforce, Inc. Consolidated Statements of Stockholders’ Equity (in millions) Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive Income/(Loss) Retained Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balance at January 31, 2023 1,009 1 ( 28 ) ( 4,000 ) 55,047 ( 274 ) 7,585 58,359 Common stock issued 26 0 0 0 1,994 0 0 1,994 Common stock repurchased 0 0 ( 36 ) ( 7,692 ) 0 0 0 ( 7,692 ) Stock-based compensation 0 0 0 0 2,800 0 0 2,800 Other comprehensive income, net of tax 0 0 0 0 0 49 0 49 Net income 0 0 0 0 0 0 4,136 4,136 Balance at January 31, 2024 1,035 1 ( 64 ) ( 11,692 ) 59,841 ( 225 ) 11,721 59,646 Common stock issued 21 0 0 0 1,535 0 0 1,535 Common stock repurchased 0 0 ( 30 ) ( 7,815 ) 0 0 0 ( 7,815 ) Stock-based compensation 0 0 0 0 3,200 0 0 3,200 Other comprehensive loss, net of tax 0 0 0 0 0 ( 41 ) 0 ( 41 ) Cash dividends declared 0 0 0 0 0 0 ( 1,549 ) ( 1,549 ) Net income 0 0 0 0 0 0 6,197 6,197 Balance at January 31, 2025 1,056 1 ( 94 ) ( 19,507 ) 64,576 ( 266 ) 16,369 61,173 Common stock issued 17 0 0 0 1,062 0 0 1,062 Common stock withheld related to net share settlement of equity awards 0 0 0 0 ( 325 ) 0 0 ( 325 ) Common stock repurchased 0 0 ( 50 ) ( 12,721 ) 0 0 0 ( 12,721 ) Stock-based compensation 0 0 0 0 3,522 0 0 3,522 Other comprehensive loss, net of tax 0 0 0 0 0 579 0 579 Cash dividends and dividend equivalents declared 0 0 0 0 0 0 ( 1,605 ) ( 1,605 ) Net income 0 0 0 0 0 0 7,457 7,457 Balance at January 31, 2026 1,073 1 ( 144 ) ( 32,228 ) 68,835 313 22,221 59,142 See accompanying Notes. 60 Table of Contents Salesforce, Inc. Consolidated Statements of Cash Flows (in millions) 4 Fiscal Year Ended January 31, 2026 2025 2024 Operating activities: Net income $ 7,457 $ 6,197 $ 4,136 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (1) 3,631 3,477 3,959 Amortization of costs capitalized to obtain revenue contracts, net 2,197 2,095 1,925 Stock-based compensation expense 3,509 3,183 2,787 (Gains) losses on strategic investments, net ( 1,017 ) 121 277 Changes in assets and liabilities, net of business combinations: Accounts receivable, net ( 2,160 ) ( 490 ) ( 659 ) Costs capitalized to obtain revenue contracts, net ( 2,811 ) ( 2,121 ) ( 1,872 ) Prepaid expenses and other current assets and other assets 819 ( 1,495 ) ( 843 ) Accounts payable and accrued expenses and other liabilities 1,014 1,089 ( 478 ) Operating lease liabilities ( 567 ) ( 548 ) ( 621 ) Unearned revenue 2,924 1,584 1,623 Net cash provided by operating activities 14,996 13,092 10,234 Investing activities: Business combinations, net of cash acquired ( 9,268 ) ( 2,734 ) ( 82 ) Purchases of strategic investments ( 1,958 ) ( 539 ) ( 496 ) Sales of strategic investments 184 126 108 Purchases of marketable securities ( 3,763 ) ( 6,879 ) ( 3,761 ) Sales of marketable securities 4,414 4,143 1,511 Maturities of marketable securities 2,395 3,378 2,129 Capital expenditures ( 594 ) ( 658 ) ( 736 ) Net cash used in investing activities ( 8,590 ) ( 3,163 ) ( 1,327 ) Financing activities: Proceeds from issuance of debt, net of issuance costs 6,000 0 0 Repurchases of common stock ( 12,596 ) ( 7,829 ) ( 7,620 ) Payments for taxes related to net share settlement of equity awards ( 351 ) 0 0 Proceeds from employee stock plans 1,039 1,540 1,954 Principal payments on financing obligations ( 584 ) ( 603 ) ( 629 ) Repayments of debt 0 ( 1,000 ) ( 1,182 ) Payments of dividends and dividend equivalents ( 1,587 ) ( 1,537 ) 0 Net cash used in financing activities ( 8,079 ) ( 9,429 ) ( 7,477 ) Effect of exchange rate changes 152 ( 124 ) 26 Net increase (decrease) in cash and cash equivalents ( 1,521 ) 376 1,456 Cash and cash equivalents, beginning of period 8,848 8,472 7,016 Cash and cash equivalents, end of period $ 7,327 $ 8,848 $ 8,472 (1) Includes amortization of intangible assets acquired through business combinations, depreciation of fixed assets and amortization and impairment of right-of-use assets. See accompanying Notes. 61 Table of Contents Salesforce, Inc. Consolidated Statements of Cash Flows Supplemental Cash Flow Disclosure (in millions) Fiscal Year Ended January 31, 2026 2025 2024 Supplemental cash flow disclosure: Cash paid during the period for: Interest $ 276 $ 233 $ 254 Income taxes, net of tax refunds $ 1,282 $ 2,061 $ 1,027 See accompanying Notes. 62 Table of Contents Salesforce, Inc. Notes to Consolidated Financial Statements 1. Summary of Business and Significant Accounting Policies Description of Business Salesforce, Inc. (the “Company”) is a global leader in customer relationship management technology that brings companies and customers together. With the deeply unified Agentforce 360 Platform, the Company delivers a single source of truth, connecting customer data with integrated artificial intelligence (“AI”) across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere. During the third quarter of fiscal 2025, the Company introduced Agentforce, a new layer of the trusted Agentforce 360 Platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. Since its founding in 1999, the Company has enabled companies of every size and industry to transform their businesses in the digital-first world, pioneering innovations in cloud, mobile, social, analytics and AI. Fiscal Year The Company’s fiscal year ends on January 31. References to fiscal 2026, for example, refer to the fiscal year ending January 31, 2026. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of: • the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations; • the valuation of privately-held strategic investments; • the fair value of assets acquired and liabilities assumed for business combinations; • the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions; • the useful lives of intangible assets; and • the fair value of certain stock awards issued. Actual results could differ materially from these estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, which forms the basis for making judgments about the carrying values of assets and liabilities as well as income and expenses to be recognized. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. Over the past few years, the Company has completed a number of acquisitions which have allowed the Company to expand its offerings, presence and reach in various market segments of the enterprise cloud computing market. While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings operate on the Agentforce 360 Platform and are deployed in a nearly identical manner, and the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated net income basis. Additionally, the measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The Company’s significant segment expenses, which are the expenses included in operating income as well as gains (losses) on strategic investments, and other segment items, which includes other income and provision for income taxes, are included in the Company’s consolidated statement of operations. Additionally, further components of the Company’s measure of profit or loss, which is consolidated net income, are included throughout the Company’s financial statements. 63 Table of Contents Concentrations of Credit Risk, Significant Customers and Investments The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis. The Company’s marketable securities portfolio consists primarily of investment-grade securities and the Company’s policies limit the amount of credit exposure to any one issuer. The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable for estimated credit losses. This allowance is based upon historical loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to unearned revenue on the consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. No single customer accounted for ten percent or more of accounts receivable as of January 31, 2026 and January 31, 2025. No single customer accounted for ten percent or more of total revenue during fiscal 2026 and 2025. As of January 31, 2026 and January 31, 2025, assets located outside the Americas were 16 percent and 17 percent of total assets, respectively. As of January 31, 2026 and January 31, 2025, assets located in the United States were 82 percent and 81 percent of total assets, respectively. The Company is also exposed to concentrations of risk in its strategic investment portfolio, including within specific industries, as the Company primarily invests in enterprise cloud companies, technology st artups and system integrators. As of January 31, 2026, two of the Company’s privately held investments had carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately 35 percent o f the portfolio in the aggregate. As of January 31, 2025 , the Company held four investments, all privately held, with carrying values that were individually greater than five percent of its strategic investments portfolio and represented approximately 24 percent of the portfolio in the aggregate. Revenue Recognition The Company derives its revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues primarily include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales. Professional services and other revenues include professional and advisory services for process mapping, project management and implementation services and training services. Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through the application of the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when or as the Company satisfies the performance obligations. Subscription and Support Revenues Subscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and updates during the term of the arrangement. Cloud Services allow customers to use the Company's multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Substantially all of the Company’s subscription service arrangements are noncancellable and do not contain refund-type provisions. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized 64 Table of Contents at the point in time when the software is made available to the customer. Revenue from software support and updates is recognized as the support and updates are provided, which is generally ratably over the contract term. The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred. Professional Services and Other Revenues The Company’s professional services contracts are either on a time and materials, fixed price or subscription basis. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts. Other revenues consist primarily of training revenues recognized as such services are performed. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that may include promises to transfer multiple performance obligations such as Cloud Services, software licenses, support and updates and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are concluded to be distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Cloud Services, software licenses and support and updates services are generally concluded to be distinct because such offerings are often sold separately. In determining whether professional services are distinct, the Company considers the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, the Company has concluded that professional services included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative SSP basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical and current sales and contract prices. In instances where the Company does not sell or price a product or service separately, the Company maximizes the use of observable inputs by using information that may include market conditions. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when indicated by the distribution of its observable prices. Alternatively, the Company uses a range of amounts to estimate SSP when the pricing practices or distribution of the observable prices are highly variable. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Costs Capitalized to Obtain Revenue Contracts The Company capitalizes incremental costs of obtaining revenue contracts related to noncancellable Cloud Services subscription, ongoing Cloud Services support and license support and updates. For contracts with term software licenses where revenue is recognized upfront when the software is made available to the customer, costs allocable to those licenses are expensed as they are incurred. Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force on new and renewal contracts, the associated payroll and benefit costs, and success fees paid to partners. Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years , which is longer than the typical initial contract period, but reflects the estimated average period of benefit, including expected contract renewals. In arriving at this average period of benefit, the Company evaluates both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Additionally, the Company amortizes capitalized costs for renewals over two years . The capitalized amounts are recoverable through future revenue streams under all noncancellable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates 65 Table of Contents or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Amortization of capitalized costs to obtain revenue contracts is included in sales and marketing expense in the accompanying consolidated statements of operations. There were no impairments of costs to obtain revenue contracts for fiscal 2026 and 2025. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. Marketable Securities The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses. Expected credit losses on securities are recognized in other income on the consolidated statements of operations and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of investment income within other income on the consolidated statements of operations. Strategic Investments The Company holds strategic investments in publicly held equity securities, privately held equity securities and other investments in which the Company does not have a controlling interest. Privately held equity securities where the Company lacks a controlling financial interest but does exercise significant influence are accounted for under the equity method. Privately held equity securities not accounted for under the equity method are recorded at cost and adjusted only for observable transactions for same or similar investments of the same issuer or impairment events (referred to as the measurement alternative). All gains and losses on privately held equity securities, realized and unrealized, are recorded through gains (losses) on strategic investments, net on the consolidated statements of operations. Other privately held investments not classified as debt or equity securities are recorded at cost and adjusted for impairment events, with any associated gains and losses recorded through gains (losses) on strategic investments, net on the consolidated statements of operations. Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data. In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company. The Company assesses its privately held strategic investments quarterly for impairment. The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors, including the investee's financial metrics, market acceptance of the investee's product or technology and the rate at which the investee is using its cash. If the investment is considered impaired, the Company estimates the fair value of the investment and recognizes any resulting impairment through the consolidated statements of operations. Publicly held equity securities are measured at fair value with changes recorded through gains (losses) on strategic investments, net on the consolidated statements of operations. Fair Value Measurement The Company measures its cash and cash equivalents, marketable securities, publicly held equity securities and foreign currency derivative contracts at fair value. In addition, the Company measures certain of its strategic investments, including its privately held equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment event. The additional disclosures regarding the Company’s fair value measurements are included in Note 4 “Fair Value Measurement.” Derivative Financial Instruments The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk associated with intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. The Company uses forward currency derivative contracts, which are not designated as 66 Table of Contents hedging instruments, to minimize the Company’s exposure to balances primarily denominated in the Euro, British Pound Sterling, Canadian Dollar, Australian Dollar, Brazilian Real and Japanese Yen. The Company’s derivative financial instruments program is not conducted for trading or speculative purposes. The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivatives, which permit net settlement of transactions with the same counterparty, thereby reducing risk of credit-related losses from a financial institutions' nonperformance. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. The notional amount of outstanding foreign currency derivative contracts as of January 31, 2026 and January 31, 2025 was $ 11.9 billion and $ 10.7 billion, respectively. Outstanding foreign currency derivative contracts are recorded at fair value on the consolidated balance sheets. Unrealized gains or losses due to changes in the fair value of these derivative contracts, as well as realized gains or losses from their net settlement, are recognized as other income in the consolidated statements of operations consistent with the offsetting gains or losses resulting from the remeasurement or settlement of the underlying foreign currency denominated receivables and payables. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Buildings and building improvements 10 to 40 years Computers, equipment and software 3 to 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of the estimated lease term or 10 years The Company estimates the useful lives of property and equipment upon initial recognition and periodically evaluates the useful lives and whether events or changes in circumstances warrant a revision to the useful lives. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses. Leases The Company has entered into operating and finance leases for corporate offices, data centers, and equipment. The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. Assets (also referred to as ROU assets) and liabilities recognized from finance leases are included in property and equipment, accrued expenses and other liabilities and other noncurrent liabilities, respectively, on the Company’s consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term. The corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives. The Company has lease agreements which contain both lease and non-lease components, which it has elected to combine for all asset classes. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. The Company’s lease terms may include options to extend or terminate the lease. Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability only when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company. As most of the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company's incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments, in the economic environment where the leased asset is located. The lease ROU asset is recognized based on the lease liability, adjusted for any rent payments or initial direct costs incurred or tenant incentives received prior to commencement. Lease expense for operating leases, which includes amortization expense of ROU assets, is recognized on a straight-line basis over the lease term. Amortization expense of finance lease ROU assets is recognized on a straight-line basis over the lease 67 Table of Contents term and interest expense for finance lease liabilities is recognized based on the incremental borrowing rate. Expense for variable lease payments is recognized as incurred. On the lease commencement date, the Company also establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are included in property and equipment, net and are amortized over the lease term. The Company has entered into subleases or has made decisions and taken actions to sublease or discontinue use of certain leased assets. Similar to other long-lived assets discussed below, management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For leased assets, such circumstances would include the decision to discontinue use prior to the end of the minimum lease term or subleases, in the case of office space, for which estimated cash flows do not fully cover the costs of the associated lease. Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Impairment Assessment The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, including, but not limited to, significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset group to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Business Combinations The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will generally recognize a gain or loss to settle that relationship as of the acquisition date within operating income on the consolidated statements of operations. In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within gains (losses) on strategic investments, net in the consolidated statements of operations. Restructuring The Company generally recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs, depending on the region where an employee works. Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are recognized as incurred. Stock-Based Compensation Expense Stock-based compensation expense is measured based on grant date at fair value using the grant date closing stock price for restricted stock units and restricted stock awards and using the Black-Scholes option pricing model for stock options and shares issued pursuant to the Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP”). The Company recognizes stock-based compensation expense related to restricted stock units, restricted stock awards, stock options and shares issued pursuant to the ESPP on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which 68 Table of Contents is generally the vesting term of four years for restricted stock units, restricted stock awards, and stock options, and the 12-month offering period for shares issued pursuant to the ESPP. The estimated forfeiture rate applied is based on historical forfeiture rates. The Company grants performance-based restricted stock units and performance-based stock options to executive officers and other members of senior management, which may include a market condition, a performance condition, or both, in addition to a service condition. Stock-based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a graded-vesting basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term. Stock-based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and the expense related to these awards is recognized based on the requisite service period elapsed, as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period. Advertising Expenses Advertising is expensed as incurred. Advertising expense was $ 0.8 billion, $ 1.0 billion, and $ 1.1 billion for fiscal 2026, 2025 and 2024, respectively. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the consolidated statements of operations in the period that includes the enactment date. The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed. Foreign Currency Translation The functional currency of the Company’s major foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive income. Foreign currency transaction gains and losses are included in other income in the consolidated statements of operations. Warranties and Indemnification The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe on a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be 69 Table of Contents subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. New Accounting Pronouncements Adopted in Fiscal 2026 In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. The Company adopted ASU 2023-09 in the fourth quarter of fiscal 2026 on a retrospective basis. New Accounting Pronouncements Pending Adoption In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the effect that ASU 2024-03 will have on its financial statement disclosures. In September 2025, the FASB issued Accounting Standards Update 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”), which provides targeted improvements to the accounting for internal-use software costs by replacing the existing project-stage model with a principles-based approach to determine when capitalization of costs should begin. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027 on a prospective basis, with early adoption permitted. The Company is currently evaluating the effect that ASU 2025-06 will have on its financial statement disclosures. 2. Revenues Disaggregation of Revenue Subscription and Support Revenue by the Company's Service Offerings (1) Subscription and support revenues consisted of the following (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Agentforce Sales $ 9,028 $ 8,322 $ 7,580 Agentforce Service 9,818 9,054 8,245 Agentforce 360 Platform, Slack and Other (2) 8,882 7,247 6,611 Agentforce Marketing and Agentforce Commerce 5,428 5,281 4,912 Agentforce Integration and Agentforce Analytics 6,232 5,775 5,189 $ 39,388 $ 35,679 $ 32,537 (1) In the third quarter of fiscal 2026, the Company renamed its service offerings to reference Agentforce. There were no changes in the allocation of revenue between these service offerings as a result of this change. (2) Agentforce 360 Platform, Slack and Other revenue for the year ended January 31, 2026 includes $ 388 million in subscription and support revenue from Informatica, Inc. (“Informatica”), which the Company acquired in November 2025. Total Revenue by Geographic Locations Revenues by geographical region consisted of the following (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Americas $ 27,193 $ 25,143 $ 23,289 Europe 10,017 8,891 8,128 Asia Pacific 4,315 3,861 3,440 $ 41,525 $ 37,895 $ 34,857 70 Table of Contents Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was approximately 93 percent during fiscal 2026, 2025, and 2024, respectively. No other country represented more than ten percent of total revenue during fiscal 2026, 2025 and 2024. Contract Balances Contract Assets The Company records a contract asset when revenue recognized on a contract exceeds the billings. Contract assets were $ 818 million as of January 31, 2026 as compared to $ 724 million as of January 31, 2025, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the consolidated balance sheets. Unearned Revenue Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The unearned revenue balance does not represent the total contract value of annual or multi-year, noncancellable subscription agreements. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter. The change in unearned revenue was as follows (in millions): Fiscal Year Ended January 31, 2026 2025 Unearned revenue, beginning of period $ 20,743 $ 19,003 Billings and other (1) 45,099 39,635 Revenue recognized over time ( 39,041 ) ( 35,628 ) Revenue recognized at a point in time ( 2,484 ) ( 2,267 ) Unearned revenue, end of period $ 24,317 $ 20,743 (1) Other includes, for example, the impact of foreign currency translation as well as contributions from contract assets and business combinations, including $ 651 million from Informatica as of the acquisition date. Revenue recognized over time primarily includes Cloud Services subscription and support revenue, which is generally recognized ratably over time, and professional services and other revenue, which is generally recognized ratably or as delivered. Revenue recognized at a point in time substantially consists of term software licenses. Approximately 50 percent of total revenue recognized in fiscal 2026 was from the unearned revenue balance as of January 31, 2025. Remaining Performance Obligation Remaining performance obligation represents contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The transaction price allocated to the remaining performance obligation is based on SSP. Remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of term license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The Company excludes amounts related to performance obligations from professional services contracts that are billed and recognized on a time and materials basis. The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 to 36 months. Remaining performance obligation consisted of the following (in billions): Current Noncurrent Total As of January 31, 2026 (1) $ 35.1 $ 37.3 $ 72.4 As of January 31, 2025 $ 30.2 $ 33.2 $ 63.4 (1) Includes approximately $ 2.2 billion of remaining performance obligation related to Informatica. 71 Table of Contents 3. Investments Marketable Securities As of January 31, 2026, marketable securities consisted of the following (in millions): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 1,343 $ 10 $ 0 $ 1,353 U.S. treasury securities 168 2 0 170 Mortgage-backed obligations 32 0 ( 1 ) 31 Asset-backed securities 618 4 0 622 Municipal securities 17 0 0 17 Commercial paper 30 0 0 30 Covered bonds 1 0 0 1 Other 14 0 0 14 Total marketable securities $ 2,223 $ 16 $ ( 1 ) $ 2,238 As of January 31, 2025, marketable securities consisted of the following (in millions): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 2,574 $ 6 $ ( 23 ) $ 2,557 U.S. treasury securities 546 0 ( 4 ) 542 Mortgage-backed obligations 128 0 ( 6 ) 122 Asset-backed securities 1,218 3 ( 4 ) 1,217 Municipal securities 108 0 ( 1 ) 107 Commercial paper 506 0 0 506 Covered bonds 29 0 ( 2 ) 27 Other 106 0 0 106 Total marketable securities $ 5,215 $ 9 $ ( 40 ) $ 5,184 The contractual maturities of the investments classified as marketable securities were as follows (in millions): As of January 31, 2026 January 31, 2025 Due within 1 year $ 460 $ 2,081 Due in 1 year through 5 years 1,777 3,098 Due in 5 years through 10 years 1 5 $ 2,238 $ 5,184 Interest income from marketable securities for fiscal year ended January 31, 2026, 2025, and 2024 was $ 539 million, $ 647 million, and $ 527 million, respectively, and is included in other income in the consolidated statements of operations. Strategic Investments Strategic investments by form and measurement category as of January 31, 2026 were as follows (in millions): Measurement Category Fair Value Measurement Alternative Other Total Equity securities $ 5 $ 7,415 $ 127 $ 7,547 Other investments 0 0 44 44 Balance as of January 31, 2026 $ 5 $ 7,415 $ 171 $ 7,591 72 Table of Contents Strategic investments by form and measurement category as of January 31, 2025 were as follows (in millions): Measurement Category Fair Value Measurement Alternative Other Total Equity securities $ 69 $ 4,617 $ 125 $ 4,811 Other investments 0 0 41 41 Balance as of January 31, 2025 $ 69 $ 4,617 $ 166 $ 4,852 The Company holds investments in, or management agreements with, variable interest entities (“VIEs”) which the Company does not consolidate because it is not considered the primary beneficiary of these entities. The carrying value of VIEs within strategic investments was $ 160 million and $ 484 million, as of January 31, 2026 and January 31, 2025, respectively. Gains (losses) on Strategic Investments, Net The components of gains (losses) on strategic investments, net were as follows (in millions): 4 Fiscal Year Ended January 31, 2026 2025 2024 Unrealized gains (losses) recognized on publicly traded equity securities, net $ ( 4 ) $ ( 16 ) $ 29 Unrealized gains recognized on privately held equity securities, net 1,470 358 119 Impairments on privately held equity securities and other investments ( 496 ) ( 582 ) ( 466 ) Unrealized gains (losses), net 970 ( 240 ) ( 318 ) Realized gains (losses) on sales of securities, net 47 119 41 Gains (losses) on strategic investments, net $ 1,017 $ ( 121 ) $ ( 277 ) Unrealized gains and losses recognized on privately held equity securities, net includes upward and downward adjustments from equity securities accounted for under the measurement alternative, as well as gains and losses from private equity securities in other measurement categories. For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $ 1.5 billion and $ 385 million and impairments and downward adjustments of $ 511 million and $ 583 million for fiscal 2026 and 2025 , respectively. Upward adjustments to measurement alternative investments in fiscal 2026 included $ 1.2 billion in gains from one privately held equity investment. Realized gains on sales of securities, net reflects the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later. 4. Fair Value Measurement The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. Significant unobservable inputs which are supported by little or no market activity. All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. 73 Table of Contents The following table presents information about the Company’s assets that were measured at fair value as of January 31, 2026 and indicates the fair value hierarchy of the valuation (in millions): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Cash equivalents (1): Time deposits $ 0 $ 1,393 $ 0 $ 1,393 Money market mutual funds 3,204 0 0 3,204 Cash equivalent securities 0 567 0 567 Marketable securities: Corporate notes and obligations 0 1,353 0 1,353 U.S. treasury securities 0 170 0 170 Mortgage-backed obligations 0 31 0 31 Asset-backed securities 0 622 0 622 Municipal securities 0 17 0 17 Commercial paper 0 30 0 30 Covered bonds 0 1 0 1 Other 0 14 0 14 Strategic investments: Equity securities 5 0 0 5 Total assets $ 3,209 $ 4,198 $ 0 $ 7,407 (1) Included in “cash and cash equivalents” in the accompanying consolidated balance sheets in addition to $ 2.2 billion of cash, as of January 31, 2026. The following table presents information about the Company’s assets that were measured at fair value as of January 31, 2025 and indicates the fair value hierarchy of the valuation (in millions): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Cash equivalents (1): Time deposits $ 0 $ 1,698 $ 0 $ 1,698 Money market mutual funds 4,373 0 0 4,373 Cash equivalent securities 0 686 0 686 Marketable securities: Corporate notes and obligations 0 2,557 0 2,557 U.S. treasury securities 0 542 0 542 Mortgage-backed obligations 0 122 0 122 Asset-backed securities 0 1,217 0 1,217 Municipal securities 0 107 0 107 Commercial paper 0 506 0 506 Covered bonds 0 27 0 27 Other 0 106 0 106 Strategic investments: Equity securities 69 0 0 69 Total assets $ 4,442 $ 7,568 $ 0 $ 12,010 (1) Included in “cash and cash equivalents” in the accompanying consolidated balance sheets in addition to $ 2.1 billion of cash, as of January 31, 2025. 74 Table of Contents Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis Substantially all of the Company's privately held equity securities and other investments are recorded at fair value on a non-recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework. For privately held equity investments without a readily determinable fair value, the Company applies valuation methods based on information available, including the market approach, the common stock equivalent (“CSE”) method, and option pricing models (“OPM”). Observable transactions, such as the issuance of new equity by an investee, are indicators of investee enterprise value and are used to estimate the fair value of the privately held equity investments. An OPM may be utilized to allocate value to the various classes of securities of the investee, including classes owned by the Company. Such information, available to the Company from investee companies, is supplemented with estimates such as volatility, expected time to liquidity and the rights and obligations of the securities the Company holds. When indicators of impairment are observed for privately held equity securities, the Company generally uses the market approach to estimate the fair value of its investment, giving consideration to the latest observable transactions, as well as the investee's current and projected financial performance and other significant inputs and assumptions, including estimated time to exit, selection and analysis of guideline public companies and the rights and obligations of the securities the Company holds. The Company's privately held equity securities and other investments amounted to $ 7.6 billion and $ 4.8 billion as of January 31, 2026 and January 31, 2025, respectively. 5. Property and Equipment, Net and Other Balance Sheet Accounts Property and Equipment Property and equipment, net consisted of the following (in millions): As of January 31, 2026 2025 Land $ 357 $ 293 Buildings and building improvements 500 492 Computers, equipment and software 4,104 4,345 Furniture and fixtures 245 232 Leasehold improvements 1,617 1,556 Property and equipment, gross 6,823 6,918 Less accumulated depreciation and amortization ( 3,703 ) ( 3,682 ) Property and equipment, net $ 3,120 $ 3,236 Depreciation and amortization of fixed assets totaled $ 1.2 billion, $ 1.0 billion and $ 1.1 billion during fiscal 2026, 2025 and 2024, respectively. Other Balance Sheet Accounts Accounts payable, accrued expenses and other liabilities as of January 31, 2026 included approximately $ 3.3 billion of accrued compensation as compared to $ 2.8 billion as of January 31, 2025. 6. Leases and Other Commitments Leases The Company has operating leases for corporate offices, data centers and equipment under noncancellable operating and finance leases with various expiration dates. The leases have noncancellable remaining terms of 1 year to 20 years, some of which include options to extend for up to 6 years, and some of which include options to terminate within 1 year. 75 Table of Contents The components of lease expense were as follows (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Operating lease cost $ 614 $ 684 $ 1,041 Finance lease cost: Amortization of right-of-use assets $ 375 $ 303 $ 264 Interest on lease liabilities 25 28 29 Total finance lease cost $ 400 $ 331 $ 293 Supplemental cash flow information related to operating and finance leases was as follows (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 695 $ 628 $ 716 Operating cash outflows for finance leases 25 27 29 Financing cash outflows for finance leases 367 380 347 Right-of-use assets obtained in exchange for lease obligations: Operating leases 255 345 456 Supplemental balance sheet information related to operating and finance leases was as follows (in millions): As of January 31, 2026 2025 Operating leases: Operating lease right-of-use assets $ 2,003 $ 2,157 Operating lease liabilities, current $ 548 $ 579 Noncurrent operating lease liabilities 2,189 2,380 Total operating lease liabilities $ 2,737 $ 2,959 Finance leases: Computers, equipment and software $ 1,427 $ 1,520 Accumulated depreciation ( 813 ) ( 708 ) Property and equipment, net $ 614 $ 812 Accrued expenses and other liabilities $ 275 $ 337 Other noncurrent liabilities 260 341 Total finance lease liabilities $ 535 $ 678 76 Table of Contents Other information related to leases was as follows: As of January 31, 2026 2025 Weighted average remaining lease term Operating leases 7 years 7 years Finance leases 3 years 3 years Weighted average discount rate Operating leases 3.4 % 3.2 % Finance leases 4.6 % 3.8 % As of January 31, 2026, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions): Operating Leases Finance Leases Fiscal Period: Fiscal 2027 $ 615 $ 289 Fiscal 2028 571 120 Fiscal 2029 493 76 Fiscal 2030 338 58 Fiscal 2031 268 26 Thereafter 790 0 Total minimum lease payments 3,075 569 Less: Imputed interest ( 338 ) ( 34 ) Total $ 2,737 $ 535 Operating lease amounts above do not include sublease income. The Company has entered into various sublease agreements with third parties. Under these agreements, the Company expects to receive sublease income of approximately $ 258 million in the next five years and $ 35 million thereafter. Of the total lease commitment balance, including leases not yet commenced, of $ 4.4 billion, approximately $ 3.8 billion is related to office space and data center facilities. The remaining commitment amount is primarily related to equipment. 7. Business Combinations Fiscal Year 2026 Regrello Corp. In October 2025, the Company acquired all of the outstanding stock of Regrello Corp. (“Regrello”), the developer of an AI-native business process automation solution. The acquisition date fair value of the consideration transferred for Regrello was $ 818 million, which consisted primarily of $ 815 million in cash. The Company recorded $ 704 million of goodwill in its condensed consolidated balance sheet which is primarily attributed to Regrello’s assembled workforce and expanded market opportunities. The goodwill associated with the acquisition of Regrello has no tax basis and is not deductible for U.S. income tax purposes. The Company also recorded approximately $ 140 million of intangible assets in its consolidated balance sheet for developed technology with a useful life of four years . The fair values assigned to assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax matters are finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The Company has included the financial results of Regrello, which were not material, in its consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were not material. Informatica, Inc. In November 2025, the Company acquired all outstanding stock of Informatica, a leader in enterprise AI-powered cloud data management. The Company has included the financial results of Informatica in the consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were not material. The acquisition date fair value of the consideration transferred for Informatica was approximately $ 9.6 billion, which consisted of the following (in millions): 77 Table of Contents Cash 9,538 Fair value of pre-existing relationship 62 Fair value of equity plan assumed 36 Total $ 9,636 The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in millions): Fair Value Cash and cash equivalents $ 1,405 Accounts receivable 233 Property and equipment, net 128 Operating lease right-of-use assets 27 Other assets 149 Goodwill 5,257 Intangible assets 3,818 Accounts payable, accrued expenses and other current liabilities ( 221 ) Unearned revenue ( 651 ) Operating lease liabilities ( 30 ) Other noncurrent liabilities ( 36 ) Deferred tax liability ( 443 ) Net assets acquired $ 9,636 The excess of purchase consideration over the fair value of other assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributed to the assembled workforce and expanded market opportunities, including integrating the Informatica product offering with existing Company service offerings. The goodwill is not deductible in the U.S. for income tax purposes. The fair values assigned to assets acquired and liabilities assumed are preliminary based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax matters are finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in millions): Fair Value Useful Life Developed technology - Cloud $ 1,350 7 years Developed technology - Other 270 3 years Customer relationships 1,840 10 years Trade names 79 4 years Backlog 279 2 years Total intangible assets subject to amortization $ 3,818 Developed technology represents the preliminary estimated fair value of Informatica's data management solutions. Customer relationships represent the preliminary estimated fair values of the underlying relationships with Informatica’s customers. The Company assumed restricted stock units and restricted stock awards with a preliminary estimated fair value of $ 330 million. Of the total consideration, $ 36 million was preliminarily allocated to the purchase consideration and $ 294 million was preliminarily allocated to future services and will be expensed over the remaining service periods on a straight-line basis. Revenues and pretax income of Informatica included in the Company’s consolidated statements of operations from the acquisition date to January 31, 2026 are as follows (in millions): Total revenues $ 399 Pretax income 24 78 Table of Contents The following pro forma financial information summarizes the combined results of operations for the Company and Informatica, as though the companies were combined as of the beginning of the Company’s fiscal 2025. The unaudited pro forma financial information was as follows (in millions): Fiscal Year Ended January 31, 2026 2025 Total revenues $ 42,853 $ 39,535 Pretax income 9,335 6,969 Net income 7,382 5,864 The pro forma financial information for all periods presented above has been calculated after adjusting the results of Informatica to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets and the stock-based compensation expense for restricted stock units and restricted stock awards assumed as though the acquisition occurred as of the beginning of the Company’s fiscal year 2025. The historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company’s fiscal 2025. Fiscal Year 2025 Spiff, Inc. In February 2024, the Company acquired all outstanding stock of Spiff, Inc. (“Spiff”), an incentive compensation management platform company. The acquisition date fair value of the consideration transferred for Spiff was $ 419 million, which consisted primarily of $ 374 million in cash. The Company recorded $ 323 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities. The goodwill associated with the acquisition of Spiff has no basis and is not deductible for U.S. income tax purposes. The Company also recorded approximately $ 52 million of intangible assets for developed technology and customer relationships with useful lives of nine and five years , respectively. Zoomin Software Ltd. In November 2024, the Company acquired all outstanding stock of Zoomin Software Ltd. (“Zoomin”), a data management company. The acquisition date fair value of the consideration transferred for Zoomin was $ 374 million, which consisted primarily of $ 344 million in cash. The Company recorded $ 284 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities. The goodwill associated with the acquisition of Zoomin has no basis and is not deductible for U.S. income tax purposes. The Company also recorded approximately $ 94 million of intangible assets for developed technology with a useful life of three years . Own Data Company Ltd. In November 2024, the Company acquired all outstanding stock of Own Data Company Ltd. (“Own”), a leading provider of data protection and data management solutions. The acquisition date fair value of the consideration transferred for Own was approximately $ 2.1 billion, which consisted of the following (in millions): Fair Value Cash $ 1,931 Fair value of pre-existing relationship 212 Total $ 2,143 79 Table of Contents The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (in millions): Fair Value Cash and cash equivalents $ 44 Accounts receivable 32 Operating lease right-of-use assets, net 35 Goodwill 1,789 Intangible assets 597 Other assets 11 Accounts payable, accrued expenses and other liabilities, current and noncurrent ( 16 ) Unearned revenue ( 125 ) Operating lease liabilities ( 35 ) Deferred tax liability ( 189 ) Net assets acquired $ 2,143 The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in millions): Fair Value Useful Life Developed technology $ 343 6 years Customer relationships 224 9 years Other purchased intangible assets 30 2 years Total intangible assets subject to amortization $ 597 Developed technology represents the fair value of Own’s data analysis technology. Customer relationships represent the fair values of the underlying relationships with Own customers. The fair value of the Company’s noncontrolling equity investment in Own prior to the acquisition was $ 172 million. The Company recognized a gain of approximately $ 40 million as a result of remeasuring its prior equity interest in Own held before the business combination. The gain is included in gains (losses) on strategic investments , net in the consolidated statement of operations. 8. Intangible Assets Acquired Through Business Combinations and Goodwill Intangible Assets Acquired Through Business Combinations Intangible assets acquired through business combinations were as follows (in millions): Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (Years) January 31, 2025 Additions and retirements, net January 31, 2026 January 31, 2025 Expense and retirements, net January 31, 2026 January 31, 2025 January 31, 2026 January 31, 2026 Acquired developed technology $ 2,958 $ 1,838 $ 4,796 $ ( 1,753 ) $ ( 654 ) $ ( 2,407 ) $ 1,205 $ 2,389 4.4 Customer relationships 6,894 1,765 8,659 ( 3,820 ) ( 820 ) ( 4,640 ) 3,074 4,019 6.3 Other (1) 331 353 684 ( 182 ) ( 95 ) ( 277 ) 149 407 2.1 Total $ 10,183 $ 3,956 $ 14,139 $ ( 5,755 ) $ ( 1,569 ) $ ( 7,324 ) $ 4,428 $ 6,815 5.4 (1) Other includes trade names, unbilled backlog, and territory rights. Amortization of intangible assets resulting from business combinations for fiscal 2026, 2025 and 2024 was $ 1.7 billion, $ 1.6 billion, and $ 1.9 billion, respectively. 80 Table of Contents The expected future amortization expense for intangible assets as of January 31, 2026 was as follows (in millions): Fiscal Period: Fiscal 2027 $ 1,842 Fiscal 2028 1,412 Fiscal 2029 1,104 Fiscal 2030 710 Fiscal 2031 448 Thereafter 1,299 Total amortization expense $ 6,815 Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions): Balance at January 31, 2024 $ 48,620 Acquisition of Spiff 323 Acquisition of Zoomin 284 Acquisition of Own 1,812 Other acquisitions and adjustments (1) 244 Balance as of January 31, 2025 $ 51,283 Acquisition of Regrello 704 Acquisition of Informatica 5,257 Other acquisitions and adjustments (1) 697 Balance as of January 31, 2026 $ 57,941 (1) Includes the effect of foreign currency translation and measurement period adjustments from prior period acquisitions. 81 Table of Contents 9. Debt The components of the Company's borrowings were as follows (in millions): Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of January 31, 2026 Carrying Value as of January 31, 2026 Carrying Value as of January 31, 2025 Informatica 364-day Credit Agreement (1) November 2025 November 2026 4.42 % 4,000 4,000 0 2028 Senior Notes April 2018 April 2028 3.70 1,500 1,497 1,496 2028 Senior Sustainability Notes July 2021 July 2028 1.50 1,000 996 995 Informatica Three-year Credit Agreement (1) November 2025 November 2028 4.42 2,000 2,000 0 2031 Senior Notes July 2021 July 2031 1.95 1,500 1,493 1,491 2041 Senior Notes July 2021 July 2041 2.70 1,250 1,237 1,236 2051 Senior Notes July 2021 July 2051 2.90 2,000 1,980 1,979 2061 Senior Notes July 2021 July 2061 3.05 1,250 1,236 1,236 Total carrying value of debt 14,500 14,439 8,433 Less current portion of debt ( 4,000 ) 0 Total noncurrent debt $ 10,439 $ 8,433 (1) The contractual interest rate represents the weighted-average for the period outstanding. The Company was in compliance with all debt covenants as of January 31, 2026. The carrying amount of the Company’s 364-day and Three-year Credit Agreements approximates fair value as it bears interest at a floating rate that resets frequently and reflects current market spreads for similar credit risk profiles. The fair value of the Term Loan is classified as Level 2 within the fair value hierarchy. The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 6.7 billion and $ 6.6 billion as of January 31, 2026 and January 31, 2025, respectively . The fair value was determined based on the closing trading price per $ 100 of the Senior Notes as of the last day of trading of fiscal 2026 and the last day of trading of fiscal 2025, and are deemed Level 2 liabilities within the fair value measurement framework. The contractual future principal payments for all borrowings as of January 31, 2026 were as follows (in millions): Fiscal Period: Fiscal 2027 $ 4,000 Fiscal 2028 0 Fiscal 2029 4,500 Fiscal 2030 0 Fiscal 2031 0 Thereafter 6,000 Total principal outstanding $ 14,500 Interest expense, primarily from the Company’s debt instruments for fiscal 2026, 2025, and 2024 was $ 324 million, $ 272 million and $ 283 million, respectively, and is included in other income in the consolidated statements of operations. Revolving Credit Facility In October 2024, the Company entered into a Credit Agreement with the lenders and issuing lenders party thereto, and Bank of America, N.A., as administrative agent (the “Revolving Loan Credit Agreement”). The Revolving Loan Credit Agreement replaced the Credit Agreement, dated December 23, 2020 (as amended, the “Prior Credit Agreement”), among the Company, the lenders and the issuing lenders party thereto, and Citibank, N.A., as administrative agent, which provided for a $ 3.0 billion unsecured revolving credit facility that was scheduled to mature on December 23, 2025. There were no outstanding borrowings under the Prior Credit Agreement. The Revolving Loan Credit Agreement provides for a $ 5.0 billion unsecured revolving credit facility (“Credit Facility”) and matures in October 2029. The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes. There were no outstanding borrowings under the Credit Facility as of January 31, 2026. Informatica-Related Financing 82 Table of Contents In June 2025, the Company entered into a 364 -day Credit Agreement that provided the Company with the ability to borrow up to $ 4.0 billion and a three-year Credit Agreement that provided the Company with the ability to borrow up to $ 2.0 billion, both on an unsecured basis, to finance a portion of the cash consideration for the Company’s acquisition of Informatica, the repayment of certain debt of Informatica and the payment of fees, costs and expenses related thereto (collectively, the “Informatica Credit Agreements”). In November 2025, as part of the acquisition of Informatica, the Company borrowed the full $ 6.0 billion available under the credit facilities associated with the Informatica Credit Agreements, which was outstanding as of January 31, 2026. For more information regarding the acquisition of Informatica, see Note 7 “Business Combinations.” 10. Restructuring The Company has undertaken various restructuring initiatives to improve operating margins and continue advancing its ongoing commitment to profitable growth, which have included a reduction of the Company’s workforce, select data center exits, and office space reductions within certain markets. The Company continues to evaluate and operationalize future programs to drive further operational efficiencies, optimize its management structure and increase cost optimization efforts to realize long-term sustainable growth. The Company recognized $ 586 million, $ 461 million and $ 988 million in restructuring charges during fiscal 2026, 2025, and 2024 respectively, which were primarily comprised of workforce reductions that include charges for employee transition, severance payments, employee benefits and stock-based compensation, as well as charges for data center exits and office space reductions. 11. Stockholders’ Equity The Company maintains the following stock plans: the ESPP, the 2013 Equity Incentive Plan and the 2014 Inducement Equity Incentive Plan (“2014 Inducement Plan”). Options issued have terms of seven years . The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions and fair value per share: Fiscal Year Ended January 31, 2026 2025 2024 Volatility 36 % 33 - 36 % 35 - 40 % Estimated life 4.2 years 5.2 years 3.5 years Risk-free interest rate 4.0 % 4.3 - 4.5 % 3.6 - 4.3 % Weighted-average fair value per share of grants $ 92.06 $ 114.96 $ 66.95 The Company estimated its future stock price volatility considering both its observed option-implied volatilities and its historical volatility calculations. Management believes this is the best estimate of the expected volatility over the expected life of its stock options and stock purchase rights. The estimated life for the stock options was based on an analysis of historical exercise activity. The risk-free interest rate is based on the rate for a U.S. government security with the same estimated life at the time of the option grant and the stock purchase rights. Stock option activity for fiscal 2026 was as follows: Options Outstanding Shares Available for Grant (in millions) Outstanding Stock Options (in millions) Weighted- Average Exercise Price Aggregate Intrinsic Value (in millions) Balance as of January 31, 2025 73 8 $ 198.89 Increase in shares authorized: 2013 Equity Incentive Plan 34 2014 Inducement Plan 2 Restricted stock activity ( 22 ) Exercised 0 ( 2 ) 176.12 Balance as of January 31, 2026 87 6 $ 207.54 $ 137 Vested or expected to vest 6 $ 207.04 $ 135 Exercisable as of January 31, 2026 5 $ 199.85 $ 115 83 Table of Contents The total intrinsic value of the options exercised during fiscal 2026, 2025 and 2024, was $ 0.2 billion, $ 0.7 billion, and $ 0.6 billion, respectively. The intrinsic value of options exercised during each year is calculated as the difference between the market value of the stock at the time of exercise and the exercise price of the stock option. The weighted-average remaining contractual life of vested and expected to vest options is approximately 2.8 years. As of January 31, 2026, options to purchase 5 million shares were vested at a weighted-average exercise price of $ 199.85 per share and had a weighted-average remaining contractual life of approximately 2.5 years. The total intrinsic value of these vested options based on the market value of the stock as of January 31, 2026 was approximately $ 0.1 billion. The following table summarizes information about stock options outstanding as of January 31, 2026: Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding (in millions) Weighted- Average Remaining Contractual Life (Years) Weighted- Average Exercise Price Number of Shares (in millions) Weighted- Average Exercise Price $ 1.34 to $ 160.17 1 2.2 $ 131.00 1 $ 136.25 $ 161.50 to $ 215.17 2 2.3 197.71 2 199.01 $ 218.21 2 3.1 218.21 2 218.21 $ 218.63 to $ 307.77 1 3.9 266.99 1 252.82 6 2.8 $ 207.54 6 $ 199.85 Restricted stock activity for fiscal 2026 was as follows: Restricted Stock Outstanding Outstanding (in millions) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in millions) Balance as of January 31, 2025 26 $ 250.50 Granted - restricted stock units and awards 14 271.38 Granted - performance-based restricted stock units 2 272.68 Canceled ( 3 ) 256.40 Vested and converted to shares ( 13 ) 244.71 Balance as of January 31, 2026 26 $ 265.64 $ 5,332 Expected to vest 22 $ 4,692 Restricted stock, which upon vesting entitles the holder to one share of common stock for each share of restricted stock, has an exercise price of $ 0.001 per share, which is equal to the par value of the Company’s common stock, and generally vests over four years . The total fair value of shares vested during fiscal 2026 and 2025 was $ 3.3 billion and $ 3.4 billion, respectively. In fiscal 2026, 2025 and 2024, the Company granted performance-based restricted stock unit awards to executive officers and other members of senior management. The performance-based restricted stock unit awards are subject to vesting based on the achievement of a market-based condition and a service-based condition or a performance-based condition and a service-based condition. At the end of the service periods, which range from approximately one -year to four -years, these performance-based restricted stock units will vest in a percentage of the target number of shares between 0 and 200 percent, depending on the extent the market-based condition or performance-based condition, or both, are achieved. The aggregate expected stock-based compensation expense remaining to be recognized as of January 31, 2026 was as follows (in millions): Fiscal Period: Fiscal 2027 2,866 Fiscal 2028 1,946 Fiscal 2029 1,016 Fiscal 2030 214 Total stock-based compensation expense $ 6,042 84 Table of Contents The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of January 31, 2026 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets. Common Stock The following number of shares of common stock were reserved and available for future issuance at January 31, 2026 (in millions): Options outstanding 6 Restricted stock awards and units and performance-based stock units outstanding 25 Stock available for future grant or issuance: 2013 Equity Incentive Plan 87 2014 Inducement Plan 1 Amended and Restated 2004 Employee Stock Purchase Plan 10 129 Preferred Stock The Company’s board of directors has the authority, without further action by stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series. The Company’s board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms and number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the Company’s common stock, diluting the voting power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing a change in control. As of January 31, 2026 and 2025, no shares of preferred stock were outstanding. Share Repurchase Program The Company’s Board of Directors (the “Board”) authorized a program to repurchase shares of the Company's common stock (the "Share Repurchase Program"), which commenced in August 2022. In September 2025, the Board authorized an additional $ 20.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorization of $ 50.0 billion. The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares. Under the Share Repurchase Program, shares of common stock may be repurchased using a variety of methods, including privately negotiated and or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The Company accounts for treasury stock under the cost method. The Company repurchased the following under its Share Repurchase Program (in millions, except average price per share): 2026 2025 2024 Shares Average price per share Amount Shares Average price per share Amount Shares Average price per share Amount Fiscal year ended January 31 50 $ 254.21 $ 12,677 30 $ 260.12 $ 7,757 36 $ 210.30 $ 7,674 All repurchases were made in open market transactions. As of January 31, 2026, the Company was authorized to purchase a remaining $ 17.9 billion of its common stock under the Share Repurchase Program. In February 2026, the Board authorized $ 50.0 billion in share repurchases under the Share Repurchase Program that replaced the previous remaining unpurchased authorization. 85 Table of Contents Dividends The Company announced the following dividends: Quarter Ended Record Date Payment Date Dividend per Share Amount (in millions) Fiscal 2026 April 30, 2025 April 10, 2025 April 24, 2025 $ 0.416 $ 406 July 31, 2025 June 18, 2025 July 10, 2025 $ 0.416 $ 404 October 31, 2025 September 17, 2025 October 9, 2025 $ 0.416 $ 400 January 31, 2026 December 18, 2025 January 8, 2026 $ 0.416 $ 395 Fiscal 2025 April 30, 2024 March 14, 2024 April 11, 2024 $ 0.40 $ 388 July 31, 2024 July 9, 2024 July 25, 2024 $ 0.40 $ 388 October 31, 2024 September 18, 2024 October 8, 2024 $ 0.40 $ 385 January 31, 2025 December 18, 2024 January 9, 2025 $ 0.40 $ 388 In February 2026, the Board declared a $ 0.44 dividend per share that is payable on April 23, 2026 to stockholders of record as of the close of business on April 9, 2026. 12. Income Taxes The domestic and foreign components of income before provision for (benefit from) income taxes consisted of the following (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Domestic $ 6,627 $ 5,119 $ 4,045 Foreign 2,893 2,319 905 $ 9,520 $ 7,438 $ 4,950 The provision for (benefit from) income taxes consisted of the following (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Current: Federal $ 413 $ 1,284 $ 940 State 72 245 199 Foreign 619 925 417 Total 1,104 2,454 1,556 Deferred: Federal 618 ( 982 ) ( 640 ) State 121 ( 167 ) ( 182 ) Foreign 220 ( 64 ) 80 Total 959 ( 1,213 ) ( 742 ) Provision for (benefit from) income taxes $ 2,063 $ 1,241 $ 814 86 Table of Contents A reconciliation of income taxes at the statutory federal income tax rate to the provision for (benefit from) income taxes included in the accompanying consolidated statements of operations is as follows (in millions): Fiscal Year Ended January 31, 2026 2025 2024 U.S. federal statutory rate $ 1,999 21.0 % $ 1,562 21.0 % $ 1,040 21.0 % State and local income taxes, net of federal effects (1) 114 1.2 50 0.7 ( 25 ) ( 0.5 ) Foreign tax effects: Ireland Statutory rate difference between Ireland and U.S. ( 197 ) ( 2.1 ) ( 132 ) ( 1.8 ) ( 82 ) ( 1.7 ) Other ( 24 ) ( 0.3 ) 4 0.1 6 0.1 Israel Effects of reorganization of operations and assets - - 90 1.2 137 2.8 Other - - 19 0.3 ( 15 ) ( 0.3 ) Other foreign jurisdictions 463 4.9 233 3.1 264 5.3 Effect of cross-border tax laws: Global intangible low taxed income, net of foreign tax credit 152 1.6 168 2.3 120 2.4 Foreign-derived intangible income deduction (2) ( 188 ) ( 2.0 ) ( 441 ) ( 5.9 ) ( 127 ) ( 2.6 ) Other foreign tax credits (3) ( 160 ) ( 1.7 ) ( 46 ) ( 0.6 ) ( 227 ) ( 4.6 ) Other 28 0.3 ( 13 ) ( 0.2 ) 16 0.3 Tax Credits Research and development tax credits ( 368 ) ( 3.9 ) ( 295 ) ( 4.0 ) ( 312 ) ( 6.3 ) Changes in valuation allowance 70 0.7 ( 7 ) ( 0.1 ) 86 1.7 Nontaxable or Nondeductible items Effects of reorganization of operations and assets - - ( 94 ) ( 1.3 ) ( 105 ) ( 2.1 ) Share-based payment awards 4 0.0 ( 174 ) ( 2.3 ) ( 26 ) ( 0.5 ) Other 30 0.3 ( 7 ) ( 0.1 ) 3 0.1 Changes in unrecognized tax benefits 151 1.6 337 4.5 67 1.4 Other adjustments ( 11 ) ( 0.1 ) ( 13 ) ( 0.2 ) ( 6 ) ( 0.1 ) Provision for (benefit from) income taxes $ 2,063 21.5 % $ 1,241 16.7 % $ 814 16.4 % (1) The tax effect in this category primarily reflects state and local taxes in California, Virginia, Illinois, New York, New York City, Pennsylvania, Texas, and Minnesota. (2) Fiscal 2025 foreign-derived intangible income deduction included tax benefits related to an adjustment for fiscal 2023 and 2024. (3) Fiscal 2024 foreign tax credits included tax benefits attributable to IRS notices. Income taxes paid, net of refunds, were as follows (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Federal $ 658 $ 1,091 $ 417 State 132 276 233 Foreign Ireland 92 139 - Israel - 287 129 Other 400 268 248 $ 1,282 $ 2,061 $ 1,027 87 Table of Contents Deferred Income Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows (in millions): As of January 31, 2026 2025 Deferred tax assets: Losses and deductions carryforward $ 200 $ 209 Deferred stock-based compensation expense 260 237 Tax credits 906 769 Accrued liabilities 494 482 Intangible assets 1,541 1,694 Lease liabilities 685 740 Unearned revenue 124 ( 28 ) Capitalized research & development 1,944 2,431 Other 17 65 Total deferred tax assets 6,171 6,599 Less valuation allowance ( 967 ) ( 786 ) Deferred tax assets, net of valuation allowance 5,204 5,813 Deferred tax liabilities: Capitalized costs to obtain revenue contracts ( 912 ) ( 850 ) Purchased intangible assets ( 1,173 ) ( 650 ) Depreciation and amortization ( 193 ) ( 164 ) Basis difference on strategic and other investments ( 347 ) ( 106 ) Lease right-of-use assets ( 519 ) ( 554 ) Total deferred tax liabilities ( 3,144 ) ( 2,324 ) Net deferred tax assets (liabilities) $ 2,060 $ 3,489 At January 31, 2026, the Company had federal net operating loss carryforwards of approximately $ 214 million, which expire in fiscal 2027 and through fiscal 2038 with the exception of post-2017 losses that do not expire, and foreign tax credits of approximately $ 214 million, which expire in fiscal 2029 through fiscal 2036. The Company had California net operating loss carryforwards of approximately $ 480 million which expire beginning in fiscal 2029 through fiscal 2045, and California research and development tax credits of approximately $ 1.1 billion, which do not expire. For other states' income tax purposes, the Company had tax credits of approximately $ 70 million, which expire beginning in fiscal 2027 through fiscal 2036, and insignificant net operating loss carryforwards. Utilization of the Company’s net operating loss carryforwards are subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization. The Company had a valuation allowance of $ 967 million and $ 786 million as of January 31, 2026 and January 31, 2025, respectively. The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates and weighs all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. The assessment requires significant judgment and is performed in each of the applicable jurisdictions. The increase in the valuation allowance during fiscal 2026 was primarily due to state tax credits and certain U.S foreign tax credits that are not expected to be realized. At the end of January 31, 2026, the valuation allowance was primarily related to U.S. states’ net operating loss and tax credits and certain U.S foreign tax credits. The Company will continue to evaluate the need for valuation allowances for its deferred tax assets. Unrecognized Tax Benefits and Other Considerations The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. 88 Table of Contents A reconciliation of the beginning and ending balance of total unrecognized tax benefits for fiscal years 2026, 2025 and 2024 is as follows (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Beginning of period $ 2,419 $ 2,083 $ 1,975 Tax positions taken in prior period: Gross increases 36 53 53 Gross decreases ( 52 ) ( 65 ) ( 85 ) Tax positions taken in current period: Gross increases 261 378 287 Settlements ( 49 ) ( 4 ) ( 21 ) Lapse of statute of limitations ( 37 ) ( 25 ) ( 104 ) Currency translation effect 61 ( 1 ) ( 22 ) End of period $ 2,639 $ 2,419 $ 2,083 In fiscal 2026, 2025 and 2024, the Company reported a net increase of approximately $ 220 million, $ 336 million, and $ 108 million, respectively, in its unrecognized tax benefits. For fiscal 2026, 2025 and 2024, total unrecognized tax benefits in an amount of $ 1.9 billion, $ 1.7 billion and $ 1.7 billion, respectively, if recognized, would have reduced income tax expense and the Company’s effective tax rate. The Company has recognized interest and penalties related to unrecognized tax benefits in the income tax provision of $ 69 million, $ 89 million and $ 29 million in fiscal 2026, 2025 and 2024, respectively. Interest and penalties accrued as of January 31, 2026, 2025 and 2024, were $ 294 million, $ 225 million and $ 136 million, respectively. Certain prior year tax returns are currently being examined by various taxing authorities in major tax jurisdictions including the United States, India, Germany and Israel. The Company currently considers U.S. federal, Japan, Australia, Germany, France, United Kingdom, Ireland, Canada, India and Israel to be major tax jurisdictions. The Company’s U.S. federal tax returns since fiscal 2008 remain open to examination, and non-U.S. tax returns generally remain open to examination since fiscal 2019. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future. 13. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the fiscal period. Diluted net income per share is computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted net income per share by application of the treasury stock method. A reconciliation of the denominator used in the calculation of basic and diluted net income per share is as follows (in millions): 4 Fiscal Year Ended January 31, 2026 2025 2024 Numerator: Net income $ 7,457 $ 6,197 $ 4,136 Denominator: Weighted-average shares outstanding for basic net income per share 950 962 974 Effect of dilutive securities: Employee stock awards 6 12 10 Weighted-average shares outstanding for diluted net income per share 956 974 984 89 Table of Contents The weighted-average number of shares outstanding used in the computation of diluted net income per share does not include the effect of the following potentially outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted net income per share because the effect would have been anti-dilutive (in millions): Fiscal Year Ended January 31, 2026 2025 2024 Employee stock awards 9 7 13 14. Legal Proceedings and Claims In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company has been, and may in the future be, put on notice or sued by third parties for alleged infringement of their proprietary rights, including patent infringement. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s reputation and future operating results. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. In management’s opinion, resolution of all current matters, including those described below, is not expected to have a material adverse impact on the Company’s financial statements. However, depending on the nature and timing of any such dispute, payment or other contingency, the resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter. Slack Litigation Beginning in September 2019, seven purported class action lawsuits were filed against Slack, its directors, certain of its officers and certain investment funds associated with certain of its directors, each alleging violations of securities laws in connection with Slack’s registration statement on Form S-1 (the “Registration Statement”) filed with the SEC. All but one of these actions were filed in the Superior Court of California for the County of San Mateo, though one plaintiff originally filed in the County of San Francisco before refiling in the County of San Mateo (and the original San Francisco action was dismissed). The remaining action was filed in the U.S. District Court for the Northern District of California (the “Federal Action”). In the Federal Action, captioned Dennee v. Slack Technologies, Inc., Case No. 3:19-CV-05857-SI, Slack and the other defendants filed a motion to dismiss the complaint in January 2020. In April 2020, the court granted in part and denied in part the motion to dismiss. In May 2020, Slack and the other defendants filed a motion to certify the court’s order for interlocutory appeal, which the court granted. Slack and the other defendants filed a petition for permission to appeal the district court’s order to the Ninth Circuit Court of Appeals, which was granted in July 2020. Oral argument was heard in May 2021. On September 20, 2021, the Ninth Circuit affirmed the district court’s ruling. Slack filed a petition for rehearing with the Ninth Circuit on November 3, 2021, which was denied on May 2, 2022. Slack filed a petition for a writ of certiorari with the U.S. Supreme Court on August 31, 2022, which was granted on December 13, 2022. On June 1, 2023, the Supreme Court issued a unanimous decision vacating the Ninth Circuit’s decision and remanded for further proceedings. The Ninth Circuit ordered the parties to submit additional briefing in light of the Supreme Court’s decision. On February 10, 2025, the Ninth Circuit issued an opinion reversing the district court’s order and instructing the district court to dismiss the complaint with prejudice. On July 10, 2025, the plaintiff filed a petition for a writ of certiorari with the U.S. Supreme Court, which was denied on October 6, 2025. On November 4, 2025, the defendants requested that the district court enter judgment against the plaintiff in the Federal Action. On November 10, 2025, the court entered judgment for defendants and against the plaintiff, which marks the conclusion of the Federal Action. The state court actions were consolidated in November 2019, and the consolidated action is captioned In re Slack Technologies, Inc. Shareholder Litigation, Lead Case No. 19CIV05370 (the “State Court Action”). An additional state court action was filed in San Mateo County in June 2020 but was consolidated with the State Court Action in July 2020. Slack and the other defendants filed demurrers to the complaint in the State Court Action in February 2020. In August 2020, the court sustained in part and overruled in part the demurrers, and granted plaintiffs leave to file an amended complaint, which they filed in October 2020. Slack and the other defendants answered the complaint in November 2020. Plaintiffs filed a motion for class certification 90 Table of Contents on October 21, 2021, which was never ruled upon. On October 26, 2022, the court stayed the State Court Action pending resolution of Slack’s petition for a writ of certiorari in the Federal Action. On November 7, 2025, the court lifted the stay in the State Court Action solely to permit plaintiffs to take certain discovery and to file a renewed motion for class certification, if they choose to do so. The State Court Action seeks unspecified monetary damages and other relief on behalf of investors who purchased Slack’s Class A common stock issued pursuant and/or traceable to the Registration Statement. Backpage Litigation The Company has been named as a defendant in a number of state and federal actions relating to the activities of one of its former customers, Website Technologies, LLC (“Website Technologies”), an affiliate of Backpage.com, LLC (“Backpage”). Plaintiffs in these actions generally allege that they were victims of sex trafficking by individuals who advertised them on backpage.com, a website operated by Backpage, and assert various claims and theories premised on the Company’s provision to Website Technologies of Salesforce CRM Software and related products, which the plaintiffs allege facilitated the operation and growth of Backpage’s business. The initial action, filed in the Superior Court of California for the County of San Francisco on behalf of numerous plaintiffs, was dismissed with prejudice under Section 230 of the Communications Decency Act (“Section 230”), and that dismissal was affirmed by the California Court of Appeal in December 2021. In April 2020, an action involving a single plaintiff was filed in the U.S. District Court for the Northern District of Illinois, G.G. v. Salesforce, Inc., Case No. 1:20-CV-2335 (“G.G.”). The district court granted the Company’s motion to dismiss the action, and the Seventh Circuit Court of Appeals reversed that ruling in August 2023. On June 12, 2025, after discovery had commenced, plaintiff filed a substantially amended complaint. On July 9, 2025, the Company filed a motion to dismiss that complaint. The district court dismissed one of plaintiff’s claims in January 2026. Trial is currently expected to occur on the remaining claim in the Fall of 2026, but no date has been finalized. Beginning in April 2020, five actions involving six plaintiffs were filed and consolidated in the U.S. District Court for the Southern District of Texas as A.B. v. Salesforce, Inc., Case No. 4:20-CV-01254 (“A.B.”). The Company moved for summary judgment on the basis that the claims were barred by Section 230. In November 2023, the court denied the Company’s motion and in December 2024, the Fifth Circuit Court of Appeals affirmed that ruling. In October 2025, the district court in A.B. granted the Company’s motion pursuant to 18 U.S.C. § 1595(b) to stay the action pending final adjudication of criminal proceedings involving Backpage. Since May 2023, a number of similar actions have been filed in federal and state courts, including principally: (1) actions filed by 30 plaintiffs in the U.S. District Court for the Northern District of Texas, which were consolidated as S.M.A. v. Salesforce, Inc., Case No. 3:23-CV-0915-B (“S.M.A”); (2) actions filed by 21 plaintiffs in Texas state court in Dallas County, which were removed to the U.S. District Court for the Northern District of Texas and consolidated as A.S. v. Salesforce, Inc., Case No. 3:23-CV-1039-B (“A.S.”); (3) an action by a single plaintiff filed in Texas state court in Harris County, which was removed to the U.S. District Court for the Southern District of Texas as T.S. v. Salesforce, Inc., Case No. 4:23-CV-01792 (“T.S.”); (4) an action by a single plaintiff filed in Texas state court in Harris County, which was removed to the U.S. District Court for the Southern District of Texas as A.A. v. Salesforce, Inc., Case No. 4:26-CV-00757 (“A.A.”); (5) an action filed by a single plaintiff in the U.S. District Court for the Southern District of Texas as Jane Doe (C.S.) v. Salesforce, Inc., Case No. 2:25-CV-189 (“C.S.”); (6) an action filed by a single plaintiff in the U.S. District Court for the Western District of Washington as M.K. v. Salesforce.com, Inc, Case No. 2:23-CV-435 (“M.K.”); (7) an action filed by a single plaintiff in the U.S. District Court for the Middle District of Florida as I.H. v. Salesforce.com, LLC, Case No. 8:24-CV-1678 (“I.H.”); (8) an action filed by 13 plaintiffs in the U.S. District Court for the Northern District of Illinois as A.G.B. v. Salesforce, Inc., Case No. 25-CV-15801 (“A.G.B.”); and an action filed by a single plaintiff in the U.S. District Court for the Northern District of Illinois as J.L.D. v. Salesforce, Inc., Case No. 26-CV-01580 (“J.L.D.”). Six actions have further been filed by 244 plaintiffs in the U.S. District Court for the Northern District of Illinois and have been consolidated with G.G. (“G.G. consolidated cases”): A.I.R. v. Salesforce, Inc., Case No. 1:25-CV-6867; J.M.M. v. Salesforce, Inc., Case No. 1:25-CV-6868; K.B. v. Salesforce, Inc., Case No. 1:25-CV-6869; N.R.J. v. Salesforce, Inc., Case No. 1:25-CV-6870; M.K. v. Salesforce, Inc., Case No. 1:25-CV-6871; and N.A.M. v. Salesforce, Inc., Case No. 1:25-CV-6872. Separately, 19 actions have been filed by 19 plaintiffs in Texas state court, which are proceeding in a Texas state court multidistrict litigation in Harris County District Court, captioned In re Jane Doe Cases, MDL 2020-28545 (“Texas MDL”). In March 2024, the district court in S.M.A. granted the Company’s consolidated motion to dismiss the complaint on the ground that plaintiffs had not alleged the requisite intent element under the federal trafficking statute, and in April 2024 an amended complaint was filed amending the federal law claim and adding a Texas state law claim. In May 2024, the Company moved to dismiss the amended complaint. In March 2025, the district court granted the motion as to the Texas state law claims, dismissed the Texas claim with prejudice, and denied the motion as to the federal law claim. In October 2025, S.M.A. was stayed pursuant to 18 U.S.C. § 1595(b) pending the final adjudication of the criminal proceedings involving Backpage. In September 2024, the district court in A.S. denied the Company’s motion to dismiss. In November 2024, the Company moved for judgment on the pleadings. In May 2025, the district court granted that motion with leave to amend. Plaintiffs then filed a consolidated amended complaint, and on June 20, 2025, the Company moved to dismiss that complaint. This motion was pending when, in October 2025, A.S. also was stayed pursuant to 18 U.S.C. § 1595(b) pending the final adjudication of the criminal proceedings involving Backpage. In June 2023, the Company moved to dismiss T.S., and that motion remains pending. In March 2024, T.S. was stayed pending the interlocutory appeal in A.B., which was remanded to 91 Table of Contents the district court in January 2025. The Company filed a motion to dismiss in A.A. in February 2026, and that motion remains pending. In September 2025, the Company filed a motion to dismiss C.S. that remains pending. In October 2025, the Company also filed a motion to stay C.S. under 18 U.S.C. § 1595(b), and that motion remains pending. Plaintiff in M.K. voluntarily dismissed her claim against Salesforce in May 2024. In December 2025, the district court in I.H. stayed the action pursuant to 18 U.S.C. § 1595(b) pending final adjudication of the criminal proceedings involving Backpage. The Company’s response to Plaintiff’s complaint in A.G.B. is due in March 2026. The Company’s response to Plaintiff’s complaint in J.L.D. is due in April 2026. The Company filed a motion to dismiss in the G.G. consolidated cases in January 2026. That motion remains pending. The Company filed a motion pursuant to 18 U.S.C. § 1595(b) to stay the G.G. consolidated cases pending the final adjudication of the criminal proceedings involving Backpage in November 2025. In the Texas MDL, the Company moved to dismiss certain claims by plaintiffs in this MDL who reside outside of Texas on personal jurisdiction, extraterritoriality, and forum non conveniens grounds in the latter half of 2023. In February 2026, at a hearing on these motions, the court granted the Company’s motions to dismiss on forum non conveniens grounds. The Company will be dismissed from B.J.A., B.I.R., C.V., T.K., and T.S.J. pending the court’s written order. All of the foregoing actions seek unspecified monetary damages, attorneys’ fees, and costs. The Company intends to defend its interests in these proceedings vigorously. 92 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.