What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-07-24 · 143 added, 128 removed, 493 unchanged (35% of the section changed)

3 unchanged sentences

(in millions, except number of shares which are reflected in thousands and per share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Assets (unaudited)

1 unchanged sentence

Cash and cash equivalents $ 2,725 $ 2,304

Short-term investments 3,008 3,458

Marketable securities 2,686 3,458

Accounts receivable, net 1,548 2,240

3 unchanged sentences

Deferred commissions, less current portion 1,017 999

Long-term investments 4,655 4,111

Long-term marketable securities 4,266 4,111

Strategic investments 1,508 472

Property and equipment, net 2,127 1,763

17 unchanged sentences

Total liabilities 10,488 10,774

Commitments and contingencies

Commitments and contingencies (Note 17)

Stockholders’ equity:

20 unchanged sentences

(in millions, except number of shares which are reflected in thousands and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

14 unchanged sentences

Interest income 115 108 346 313

Other expense, net ( 3 ) ( 10 ) ( 14 ) ( 18 )

Other income (expense), net 7 ( 10 ) ( 7 ) ( 28 )

Income before income taxes 694 516 1,720 1,275

7 unchanged sentences

Foreign currency translation adjustments $ ( 11 ) $ 50 $ 140 $ 3

Unrealized gains (losses) on investments, net of tax

5 ( 3 ) 19 ( 16 )

Unrealized (losses) gains on derivative instruments, net of tax ( 99 ) 10 ( 151 ) 22

Other comprehensive income (loss)

21 ( 10 ) 19 ( 41 )

Unrealized gains on marketable securities, net of tax

Unrealized gains (losses) on derivative instruments, net of tax 36 ( 52 ) ( 115 ) ( 30 )

Other comprehensive income

Comprehensive income

1 unchanged sentence

(1) Includes stock-based compensation as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

10 unchanged sentences

(in millions, except number of shares which are reflected in thousands)

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Common Stock Treasury Stock Additional

12 unchanged sentences

Stock-based compensation — — — — 492 — — 492 — — — — 426 — — 426

Issuance of common stock for business combinations 469 — — — 434 434 — — — — — — — —

Other comprehensive income (loss), net of tax — — — — — — 21 21 — — — — — — ( 10 ) ( 10 )

Other comprehensive income, net of tax — — — — — — 32 32 — — — — — — 58 58

Net income — — — — — 502 — 502 — — — — — 432 — 432

Balance at end of the period 210,551 $ — ( 2,987 ) $ ( 2,451 ) $ 8,928 $ 4,841 $ ( 17 ) $ 11,301 207,693 $ — ( 1,376 ) $ ( 926 ) $ 7,126 $ 3,110 $ ( 20 ) $ 9,290

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Common Stock Treasury Stock Additional

13 unchanged sentences

Issuance of common stock for business combinations 469 — — — 434 — — 434 — — — — — — — —

Other comprehensive income (loss), net of tax — — — — — — 19 19 — — — — — — ( 41 ) ( 41 )

Other comprehensive income, net of tax — — — — — — 51 51 — — — — — — 17 17

Net income — — — — — 1,347 — 1,347 — — — — — 1,041 — 1,041

4 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

18 unchanged sentences

Purchases of other intangibles ( 43 ) ( 30 )

Purchases of investments ( 2,322 ) ( 2,660 )

Purchases of non-marketable investments ( 138 ) ( 88 )

Sales and maturities of investments 2,281 2,113

Other 44 ( 2 )

Purchases of marketable securities ( 2,719 ) ( 3,952 )

Purchases of strategic investments ( 1,020 ) ( 149 )

Sales and maturities of marketable securities 3,410 3,024

Net cash used in investing activities $ ( 1,191 ) $ ( 1,763 )

39 unchanged sentences

As a result of displaying amounts in millions, rounding differences may exist in the condensed consolidated financial statements and footnote tables.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for other interim periods or future years.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for other interim periods or future years.

The condensed consolidated balance sheet as of December 31, 2024 is derived from audited consolidated financial statements;

14 unchanged sentences

We had one customer, a U.S.

federal channel partner and systems integrator, that represented 16 % and 12 % of our accounts receivable balance as of June 30, 2025 and December 31, 2024, respectively.

This customer represented 11 % of our total revenues for each of the three and six months ended June 30, 2025 and 10 % of our total revenues for each of the three and six months ended June 30, 2024.

federal channel partner and systems integrator, that represented 30 % and 12 % of our accounts receivable balance as of September 30, 2025 and December 31, 2024, respectively.

This customer represented 11 % of our total revenues for each of the three and nine months ended September 30, 2025 and 2024.

Based on our periodic credit evaluations, there have been no historical collection concerns with this customer.

For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Strategic investments, previously presented within other assets, were reclassified to be presented separately on our condensed consolidated balance sheets.

The reclassification had no impact on our previously reported total assets or net cash from operating or investing activities and did not result in a restatement of prior period condensed consolidated financial statements.

(3) Investments

Marketable Debt Securities

The following is a summary of our available-for-sale debt securities recorded within short-term and long-term investments on the condensed consolidated balance sheets (in millions):

June 30, 2025

Marketable Securities

The following is a summary of our available-for-sale debt securities recorded within marketable securities and long-term marketable securities on the condensed consolidated balance sheets (in millions):

September 30, 2025

Losses Estimated

15 unchanged sentences

Total available-for-sale debt securities $ 7,576 $ 18 $ ( 25 ) $ 7,569

As of June 30, 2025, the contractual maturities of our available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet and mortgage-backed and asset-backed securities that do not have a single maturity, did not exceed 37 months.

As of September 30, 2025, the contractual maturities of our available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet and mortgage-backed and asset-backed securities that do not have a single maturity, did not exceed 37 months.

The fair values of available-for-sale debt securities, by remaining contractual maturity, are as follows (in millions):

June 30, 2025

September 30, 2025

Due within 1 year $ 2,686

2 unchanged sentences

Total $ 6,952

As of June 30, 2025 and December 31, 2024, unrealized losses of $ 16 million and $ 18 million, respectively, are from available-for-sale debt securities in a continuous unrealized loss position greater than 12 months.

As of June 30, 2025 and December 31, 2024, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 1,253 million and $ 2,419 million, respectively, the majority of which has been in a continuous unrealized loss position for less than 12 months.

As of September 30, 2025 and December 31, 2024, unrealized losses of $ 15 million and $ 18 million, respectively, are from available-for-sale debt securities in a continuous unrealized loss position greater than 12 months.

As of September 30, 2025, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 362 million, the majority of which has been in a continuous unrealized loss position for greater than 12 months.

As of December 31, 2024, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 2,419 million, the majority of which was in a continuous unrealized loss position for less than 12 months.

For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis.

Unrealized losses on available-for-sale debt securities were due primarily to changes in market interest rates, and credit-related impairment losses were immaterial as of June 30, 2025.

Non-Marketable Equity Investments

As of June 30, 2025 and December 31, 2024, the total amount of non-marketable equity investments in privately-held companies included in other assets on our condensed consolidated balance sheets was $ 601 million and $ 469 million, respectively.

Our non-marketable equity investments are primarily accounted for using the measurement alternative, which measures the investments at cost, minus impairment, if any, plus or minus changes resulting from qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer.

Unrealized losses on available-for-sale debt securities were due primarily to changes in market interest rates, and credit-related impairment losses were immaterial as of September 30, 2025.

Strategic Investments

As of September 30, 2025 and December 31, 2024, the total amount of strategic investments in privately-held companies on our condensed consolidated balance sheets was $ 1,508 million and $ 472 million, respectively.

Our strategic investments are predominantly comprised of non-marketable equity investments, which are primarily accounted for using the measurement alternative.

Under this approach, the investments are measured at cost, minus impairment, if any, plus or minus changes resulting from qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer.

Determining whether an observed transaction is similar to a security within our portfolio requires judgment based on the rights and preferences of the securities.

Recording upward and downward adjustments to the carrying value of our non-marketable equity investments as a result of observable price changes requires quantitative assessments of the fair value of our non-marketable equity investments using various valuation methodologies and involves the use of estimates.

The adjustments made during the three and six months ended June 30, 2025 and 2024 were immaterial.

The adjustments made during the three and nine months ended September 30, 2025 and 2024 were immaterial.

The remaining strategic investments are accounted for using the equity method of accounting as we have the ability to exercise significant influence but not control over the investee.

For the three and nine months ended September 30, 2025 and 2024, our share of the investee’s results of operations included in other income (expense), net in our condensed consolidated statements of comprehensive income was immaterial.

We classify these fair value measurements as Level 3 within the fair value hierarchy.

In September 2025, the Company purchased $ 750 million of preferred shares of Genesys, a privately-held AI-powered experience orchestration software company.

(4) Fair Value Measurements

The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of June 30, 2025 (in millions):

The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of September 30, 2025 (in millions):

Level 1 Level 2 Total

28 unchanged sentences

Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs), pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) or using unobservable inputs that are supported by little or no market activity (Level 3 inputs).

Our non-marketable equity investments are not included in the table above and are discussed in Note 3.

Our strategic investments are not included in the table above and are discussed in Note 3.

Refer to Note 8 for the fair value measurement of our derivative contracts and Note 11 for the fair value measurement of our long-term debt, which are also not included in the table above.

4 unchanged sentences

The acquisition is intended to expand our growing CRM footprint and accelerate our sales and order management capabilities with the acquired CPQ solutions technology.

The purchase price was preliminarily allocated based on the estimated fair value of the developed technology intangible asset of $ 85 million ( 5-year estimated useful life), customer-related and backlog assets of $ 14 million ( 3-year estimated useful life), net tangible assets of $ 25 million, deferred tax liabilities of $ 22 million and goodwill of $ 404 million, which is not deductible for income tax purposes.

The purchase price was allocated based on the estimated fair value of the developed technology intangible asset of $ 85 million ( 5-year estimated useful life), customer-related and backlog assets of $ 14 million ( 3-year estimated useful life), net tangible assets of $ 25 million, deferred tax liabilities of $ 22 million and goodwill of $ 404 million, which is not deductible for income tax purposes.

Goodwill is primarily attributed to the value expected from synergies resulting from the business combination.

The fair values assigned to tangible and intangible assets acquired, liabilities assumed and income taxes payable and deferred taxes are based on management’s estimates and assumptions.

The provisional measurements of fair value for certain assets and liabilities may be subject to change as additional information is received.

The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

During the six months ended June 30, 2025, we also completed acquisitions that were not material to our condensed consolidated financial statements, either individually or in the aggregate.

We have included the financial results of the business combinations in the condensed consolidated financial statements from the date of acquisition, which were not material.

Pending Business Combinations

In July 2025, we completed the acquisition of data.world, Inc., a leader in enterprise data cataloging and governance.

1 unchanged sentence

The acquisition is not material to our condensed consolidated financial statements.

In March 2025, we signed a definitive agreement to acquire Moveworks, Inc., a privately-held company that provides agentic AI assistants that connect enterprise systems, for approximately $ 2.9 billion.

During the nine months ended September 30, 2025, we also completed other acquisitions that were not material to our condensed consolidated financial statements, either individually or in the aggregate.

We have included the financial results of the business combinations in the condensed consolidated financial statements from the date of acquisition, which were not material.

Pending Business Combination

In March 2025, we signed a definitive agreement to acquire Moveworks, Inc.

(“Moveworks”), a privately-held company that provides agentic AI assistants that connect enterprise systems, for approximately $ 2.9 billion.

The determination of the final value of purchase consideration, payable in a combination of equity and cash, will depend on the Company's stock price at the close of the transaction, subject to customary purchase price adjustments.

The acquisition is expected to close during the fourth quarter of 2025 or later, subject to customary regulatory approvals and closing conditions.

The acquisition is expected to close during the fourth quarter of 2025 or early 2026, subject to customary regulatory approvals and closing conditions.

As contemplated by the terms of the definitive agreement, in August 2025, the Company and Moveworks entered into a term loan credit agreement pursuant to which Moveworks drew $ 25 million and may draw up to an additional $ 75 million if the definitive agreement is validly terminated under certain conditions.

Loan amounts under this arrangement will mature in August 2032 and are included in other assets on the condensed consolidated balance sheets.

2024 Business Combinations

7 unchanged sentences

Foreign currency translation adjustments 74

Balance as of June 30, 2025 $ 1,778

Balance as of September 30, 2025 $ 1,820

Intangible assets, net consists of the following (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Developed technology $ 811 $ 581

3 unchanged sentences

Intangible assets, net $ 391 $ 209

The weighted-average useful life of the acquired developed technology for the six months ended June 30, 2025 and 2024 was approximately five years .

Amortization expense for intangible assets for the three months ended June 30, 2025 and 2024 was $ 25 million and $ 24 million, respectively, and for the six months ended June 30, 2025 and 2024 was $ 46 million and $ 48 million, respectively.

The following table presents the estimated future amortization expense related to intangible assets held at June 30, 2025 (in millions):

Years Ending December 31,

The weighted-average useful life of the acquired developed technology for the nine months ended September 30, 2025 and 2024 was approximately five years .

Amortization expense for intangible assets for the three months ended September 30, 2025 and 2024 was $ 33 million and $ 23 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $ 79 million and $ 71 million, respectively.

The following table presents the estimated future amortization expense related to intangible assets held at September 30, 2025 (in millions):

Fiscal Period:

Remainder of 2025

3 unchanged sentences

Property and equipment, net consists of the following (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Computer equipment $ 3,174 $ 2,697

7 unchanged sentences

Construction in progress consists of costs primarily related to leasehold and other improvements.

Depreciation expense for the three months ended June 30, 2025 and 2024 was $ 120 million and $ 88 million, respectively, and for the six months ended June 30, 2025 and 2024 was $ 232 million and $ 168 million, respectively.

Depreciation expense for the three months ended September 30, 2025 and 2024 was $ 133 million and $ 96 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $ 365 million and $ 264 million, respectively.

(8) Derivative Contracts

2 unchanged sentences

These forward contracts are recorded at fair value and have maturities of up to 34 months.

We had outstanding cash flow hedges with total notional values of $ 1.8 billion and $ 1.7 billion as of June 30, 2025 and December 31, 2024, respectively.

We had outstanding cash flow hedges with total notional values of $ 1.8 billion and $ 1.7 billion as of September 30, 2025 and December 31, 2024, respectively.

We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statements of cash flows.

1 unchanged sentence

Condensed Consolidated Balance Sheets Location

June 30, 2025 December 31, 2024

September 30, 2025

December 31, 2024

Prepaid expenses and other current assets

2 unchanged sentences

Other long-term liabilities

As of June 30, 2025, approximately $ 76 million of the pre-tax derivative losses from accumulated other comprehensive income (loss) is expected to be recognized in subscription revenues within the next 12 months.

As of September 30, 2025, approximately $ 56 million of the pre-tax derivative losses from accumulated other comprehensive income (loss) is expected to be recognized in subscription revenues within the next 12 months.

All hedging relationships are formally documented at the inception of the hedge and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions.

1 unchanged sentence

We report changes in fair value of these cash flow hedges as a component of accumulated other comprehensive income (loss) and subsequently reclassify into earnings in the same period the forecasted transaction affects earnings.

Amounts reclassified to subscription revenues were a loss of $ 17 million and $ 8 million for the three and six months ended June 30, 2025, respectively, and a gain of $ 5 million for each of the three and six months ended June 30, 2024.

There was no ineffectiveness in the Company’s cash flow hedging program for each of the three and six months ended June 30, 2025 and 2024.

Amounts reclassified to subscription revenues were a loss of $ 16 million and $ 24 million for the three and nine months ended September 30, 2025, respectively, and a loss of $ 2 million and a gain of $ 3 million for the three and nine months ended September 30, 2024, respectively.

There was no ineffectiveness in the Company’s cash flow hedging program for each of the three and nine months ended September 30, 2025 and 2024.

Derivatives not Designated as Hedging Instruments

Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies.

These foreign currency forward contracts are recorded at fair value and have maturities of 12 months or less.

The changes in the fair value of these contracts are recorded in

other expense, net on the condensed consolidated statements of comprehensive income.

For the periods ended June 30, 2025 and December 31, 2024, we had foreign currency forward contracts with total notional values of $ 2.5 billion and $ 2.2 billion, respectively, which were not designated as hedging instruments.

The gross fair value of these foreign currency forward contracts was immaterial as of June 30, 2025 and December 31, 2024.

The gains recognized for foreign currency forward contracts from derivatives not designated as hedging instruments in other expense, net of $ 86 million and $ 120 million, offset the remeasurement losses of the related foreign currency denominated assets and liabilities of $ 87 million and $ 125 million for the three and six months ended June 30, 2025, respectively.

The gains (losses) recognized for foreign currency forward contracts from derivatives not designated as hedging instruments were immaterial for each of the three and six months ended June 30, 2024.

These foreign currency forward contracts are

recorded at fair value and have maturities of 12 months or less.

The changes in the fair value of these contracts are recorded in other income (expense), net on the condensed consolidated statements of comprehensive income.

For the periods ended September 30, 2025 and December 31, 2024, we had foreign currency forward contracts with total notional values of $ 3.0 billion and $ 2.2 billion, respectively, which were not designated as hedging instruments.

The gross fair value of these foreign currency forward contracts was immaterial as of September 30, 2025 and December 31, 2024.

The gains recognized for foreign currency forward contracts from derivatives not designated as hedging instruments in other income (expense), net of $ 100 million, primarily offset the remeasurement losses of the related foreign currency denominated assets and liabilities of $ 114 million for the nine months ended September 30, 2025.

The gains (losses) recognized for foreign currency forward contracts from derivatives not designated as hedging instruments were immaterial for the three months ended September 30, 2025 and each of the three and nine months ended September 30, 2024.

Realized gains (losses) from settlement of the derivative assets and liabilities are classified as investing activities in the condensed consolidated statements of cash flows.

1 unchanged sentence

(9) Supply Chain Finance Program

We entered into a supply chain finance (“SCF”) program that provides suppliers with the opportunity to sell their receivables due from us to a global financial institution acting as our paying agent.

Our supply chain finance (“SCF”) program provides suppliers with the opportunity to sell their receivables due from us to a global financial institution acting as our paying agent.

A supplier’s election to receive early payment at a discounted amount from the financial institution does not change the amount that we must remit to the financial institution on our payment date, which is generally 90 days from the invoice date.

1 unchanged sentence

We do not have pledged assets or other guarantees under our SCF program.

Our outstanding payment obligations to suppliers participating in the SCF program totaled $ 49 million as of June 30, 2025.

Our outstanding payment obligations to suppliers participating in the SCF program totaled $ 32 million as of September 30, 2025.

These obligations are included in accounts payable in our condensed consolidated balance sheets and all activity related to these obligations is presented within operating activities in our condensed consolidated statements of cash flows.

(10) Deferred Revenue and Performance Obligations

Revenues recognized from beginning period deferred revenue during the three months ended June 30, 2025 and 2024 were $ 2.8 billion and $ 2.4 billion, respectively, and $ 4.7 billion and $ 3.9 billion for the six months ended June 30, 2025 and 2024, respectively.

Revenues recognized from beginning period deferred revenue during the three months ended September 30, 2025 and 2024 were $ 3.0 billion and $ 2.5 billion, respectively, and $ 6.1 billion and $ 5.1 billion for the nine months ended September 30, 2025 and 2024, respectively.

Remaining Performance Obligations

1 unchanged sentence

RPO excludes contracts that are billed in arrears, such as certain time and materials contracts, as we apply the “right to invoice” practical expedient under relevant accounting guidance.

As of June 30, 2025, the total non-cancellable RPO under our contracts with customers was $ 23.9 billion and we expect to recognize revenues on approximately 46 % of these RPO over the following 12 months.

As of September 30, 2025, the total non-cancellable RPO under our contracts with customers was $ 24.3 billion and we expect to recognize revenues on approximately 47 % of these RPO over the following 12 months.

The majority of the non-current RPO will be recognized over the next 13 to 36 months.

For the periods ended June 30, 2025 and December 31, 2024, the carrying value of our outstanding debt was $ 1,490 million and $ 1,489 million, respectively, net of unamortized debt discount and issuance costs of $ 10 million and $ 11 million, respectively.

We consider the fair value of the 2030 Notes at June 30, 2025 and December 31, 2024 to be a Level 2 measurement.

The estimated fair value of the 2030 Notes based on the closing trading price per $ 100 , was $ 1,300 million and $ 1,247 million at June 30, 2025 and December 31, 2024, respectively.

For the periods ended September 30, 2025 and December 31, 2024, the carrying value of our outstanding debt was $ 1,491 million and $ 1,489 million, respectively, net of unamortized debt discount and issuance costs of $ 9 million and $ 11 million, respectively.

We consider the fair value of the 2030 Notes at September 30, 2025 and December 31, 2024 to be a Level 2 measurement.

The estimated fair value of the 2030 Notes based on the closing trading price per $ 100 , was $ 1,314 million and $ 1,247 million at September 30, 2025 and December 31, 2024, respectively.

In August 2020, we issued 1.40 % fixed rate ten-year notes with an aggregate principal amount of $ 1.5 billion due on September 1, 2030 (the “2030 Notes”).

6 unchanged sentences

Unrealized Gains (Losses) on Derivative Instruments

Unrealized Gains (Losses) on Investments

Unrealized Gains (Losses) on Marketable Securities

Foreign Currency Translation Adjustment

1 unchanged sentence

$ 50 $ ( 27 ) $ ( 91 ) $ ( 68 )

Other comprehensive income (loss) before reclassifications ( 159 ) 19 151 11

Other comprehensive (loss) income before reclassifications

( 139 ) 26 140 27

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss)

Net current period other comprehensive (loss) income

( 115 ) 26 140 51

Balance as of June 30, 2025

Balance as of September 30, 2025

$ ( 65 ) $ ( 1 ) $ 49 $ ( 17 )

Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Investments Foreign Currency Translation Adjustment Total

Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Marketable Securities

Foreign Currency Translation Adjustment Total

Balance as of December 31, 2023

$ — $ ( 39 ) $ 2 $ ( 37 )

Other comprehensive income (loss) before reclassifications

Other comprehensive (loss) income before reclassifications

( 27 ) 44 3 20

1 unchanged sentence

( 3 ) — — ( 3 )

Net current period other comprehensive income (loss)

Net current period other comprehensive (loss) income

( 30 ) 44 3 17

Balance as of June 30, 2024

Balance as of September 30, 2024

$ ( 30 ) $ 5 $ 5 $ ( 20 )

(13) Stockholders' Equity

We are authorized to issue a total of 600 million shares of common stock as of June 30, 2025.

We are authorized to issue a total of 600 million shares of common stock as of September 30, 2025.

Holders of our common stock are not entitled to receive dividends unless declared by our board of directors.

As of June 30, 2025, we had 208 million shares of common stock, net of treasury stock, outstanding and had reserved shares of common stock for future issuance as follows (in thousands):

June 30, 2025

As of September 30, 2025, we had 208 million shares of common stock, net of treasury stock, outstanding and had reserved shares of common stock for future issuance as follows (in thousands):

September 30, 2025

Options outstanding 882

5 unchanged sentences

(2) Refer to Note 14 for a description of these plans.

During the six months ended June 30, 2025 and 2024, we issued a total of 1.2 million and 1.4 million shares, respectively, from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (“ESPP”).

During the nine months ended September 30, 2025 and 2024, we issued a total of 1.9 million and 2.1 million shares, respectively, from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (“ESPP”).

Treasury Stock

4 unchanged sentences

The timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations.

During the three and six months ended June 30, 2025, the Company repurchased 0.4 million and 0.7 million shares of its common stock for $ 361 million and $ 659 million, respectively.

During the six months ended June 30, 2024, the Company repurchased 0.2 million shares of its common stock for $ 175 million.

There were no share repurchases during the three months ended June 30, 2024.

During the three and nine months ended September 30, 2025, the Company repurchased 0.6 million and 1.3 million shares of its common stock for $ 584 million and $ 1,243 million, respectively.

During the three and nine months ended September 30, 2024, the Company repurchased 0.3 million and 0.5 million shares of its common stock for $ 225 million and $ 400 million, respectively.

All repurchases were made in open market transactions.

Repurchases of common stock are recognized as treasury stock and held for future issuance.

As of June 30, 2025, approximately $ 2.6 billion of the authorized amount under the Share Repurchase Program remained available for future repurchases.

As of September 30, 2025, approximately $ 2.0 billion of the authorized amount under the Share Repurchase Program remained available for future repurchases.

(14) Equity Awards

16 unchanged sentences

Stock Options

A summary of stock option activity for the six months ended June 30, 2025 was as follows:

A summary of stock option activity for the nine months ended September 30, 2025 was as follows:

Shares Weighted-

5 unchanged sentences

Exercised ( 35 ) $ 597.37 $ 11

Outstanding as of June 30, 2025 946 $ 620.37 6.1 $ 386

Vested and expected to vest as of June 30, 2025 905 $ 617.39 6.0 $ 371

Vested and exercisable as of June 30, 2025 543 $ 572.62 5.8 $ 247

Forfeited ( 31 ) $ 655.65

Outstanding as of September 30, 2025 882 $ 619.01 5.8 $ 266

Vested and expected to vest as of September 30, 2025 850 $ 616.48 5.8 $ 258

Vested and exercisable as of September 30, 2025 510 $ 569.35 5.5 $ 179

Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options.

The total fair value of stock options vested during the six months ended June 30, 2025 was $ 26 million.

No stock options were granted during the six months ended June 30, 2025.

The total fair value of stock options vested during the nine months ended September 30, 2025 was $ 26 million.

No stock options were granted during the nine months ended September 30, 2025.

During the year ended December 31, 2021, a one-time long-term performance-based option award was granted to the Chief Executive Officer (“2021 CEO Performance Award”) and to certain executives (collectively “2021 Performance Awards”) under the 2021 Plan at a total grant date fair value of $ 232 million.

5 unchanged sentences

Shares acquired upon exercise of the options cannot be sold, transferred or disposed until after the end of the Performance Period and the 2021 Performance Awards will expire ten years from the respective date of grant.

During the six months ended June 30, 2025, the fourth tranche was vested based on the achievement of both the performance and market conditions.

During the nine months ended September 30, 2025, the fourth tranche was vested based on the achievement of both the performance and market conditions.

The fair value of the 2021 Performance Awards and the corresponding derived service periods were estimated using the Monte Carlo simulation.

Stock-based compensation expense is recognized on a graded vesting basis over the requisite service period for each respective tranche, but not shorter than the two-year minimum service period, and includes an assessment of when it is probable the performance condition will be achieved, which involves a subjective assessment of our future financial projections.

As of June 30, 2025, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was $ 3 million.

The weighted-average remaining vesting period of unvested stock options at June 30, 2025 was approximately one year .

A summary of RSU activity for the six months ended June 30, 2025 was as follows:

As of September 30, 2025, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was $ 1 million.

The weighted-average remaining vesting period of unvested stock options at September 30, 2025 was less than one year.

A summary of RSU activity for the nine months ended September 30, 2025 was as follows:

Shares Weighted-Average Grant-Date Fair Value

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Forfeited ( 497 ) $ 703.06

Outstanding as of June 30, 2025 6,234 $ 758.55

Expected to vest as of June 30, 2025 5,593

RSUs outstanding as of June 30, 2025 were comprised of 5.7 million RSUs with only service conditions and 0.5 million RSUs with both service conditions and performance conditions, including certain RSUs with additional market conditions.

The total intrinsic value of the RSUs vested was $ 1.5 billion for the six months ended June 30, 2025.

As of June 30, 2025, the aggregate intrinsic value of RSUs outstanding was $ 6.4 billion and RSUs expected to vest was $ 5.7 billion.

Outstanding as of September 30, 2025 5,456 $ 778.03

Expected to vest as of September 30, 2025 4,915

RSUs outstanding as of September 30, 2025 were comprised of 5.1 million RSUs with only service conditions and 0.4 million RSUs with both service conditions and performance conditions, including certain RSUs with additional market conditions.

The total intrinsic value of the RSUs vested was $ 2.1 billion for the nine months ended September 30, 2025.

As of September 30, 2025, the aggregate intrinsic value of RSUs outstanding was $ 5.0 billion and RSUs expected to vest was $ 4.5 billion.

PRSUs have service, performance and market vesting conditions.

The ultimate number of shares eligible to vest range from 0 % to 200 %, subject to our board of directors compensation committee’s approval of performance metrics achievement and, for certain PRSUs, total shareholder return relative to that of the S&P 500 index.

The eligible shares subject to PRSUs granted during the six months ended June 30, 2025 will vest in one to three years contingent on each holder’s continuous status as an employee on the applicable vesting dates.

The eligible shares subject to PRSUs granted during the nine months ended September 30, 2025 will vest in one to three years contingent on each holder’s continuous status as an employee on the applicable vesting dates.

The number of PRSUs granted included in the table above reflects the shares that could be eligible to vest at 100 % of target for PRSUs and includes adjustments for over or under achievement for PRSUs granted in the prior year.

We recognized $ 90 million and $ 79 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was $ 3.8 billion, and the weighted-average remaining vesting period was approximately three years .

We recognized $ 119 million and $ 106 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was $ 3.4 billion, and the weighted-average remaining vesting period was approximately three years .

(15) Net Income Per Share

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The following table presents the calculation of basic and diluted net income per share attributable to common stockholders (in millions, except for number of shares reflected in thousands and per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjust the provision for discrete tax items recorded in the period.

Our income tax provision was $ 86 million and $ 181 million for the three and six months ended June 30, 2025, respectively, and $ 72 million and $ 150 million for the three and six months ended June 30, 2024, respectively.

Our income tax provision was $ 192 million and $ 373 million for the three and nine months ended September 30, 2025, respectively, and $ 84 million and $ 234 million for the three and nine months ended September 30, 2024, respectively.

The income tax provision was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, offset by excess tax benefits of stock-based compensation.

We are subject to taxation in the United States and foreign jurisdictions.

As of June 30, 2025, our tax years 2004 to 2024 remain subject to examination in most jurisdictions.

As of September 30, 2025, our tax years 2004 to 2024 remain subject to examination in most jurisdictions.

Due to differing interpretations of tax laws and regulations, tax authorities may dispute our tax filing positions.

We periodically evaluate our exposures associated with our tax filing positions and believe that adequate amounts have been reserved for adjustments that may result from tax examinations.

On July 4, 2025, H.R.

1, the "One Big Beautiful Bill Act," was enacted into law, bringing significant amendments to the U.S.

This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act and introduces new tax measures affecting both businesses and individuals.

The enacted legislation had an immaterial impact on the Company’s effective tax rate for the three months ended September 30, 2025.

The Company will continue to monitor any future changes in its business or interpretations of the new tax law that could affect its tax position in subsequent periods.

(17) Commitments and Contingencies

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Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments.

Total operating lease costs were $ 36 million and $ 72 million for the three and six months ended June 30, 2025, respectively, and $ 32 million and $ 65 million for the three and six months ended June 30, 2024, respectively.

For the six months ended June 30, 2025 and 2024, total cash paid for amounts included in the measurement of operating lease liabilities was $ 53 million and $ 41 million, respectively.

Operating lease liabilities arising from obtaining operating right-of-use assets totaled $ 173 million and $ 14 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the weighted-average remaining lease term is approximately nine years , and the weighted-average discount rate is 4 %.

Maturities of operating lease liabilities as of June 30, 2025 are presented in the table below (in millions):

Total operating lease costs were $ 37 million and $ 109 million for the three and nine months ended September 30, 2025, respectively, and $ 33 million and $ 98 million for the three and nine months ended September 30, 2024, respectively.

For the nine months ended September 30, 2025 and 2024, total cash paid for amounts included in the measurement of operating lease liabilities was $ 80 million and $ 61 million, respectively.

Operating lease liabilities arising from obtaining operating right-of-use assets totaled $ 195 million and $ 21 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the weighted-average remaining lease term is approximately eight years , and the weighted-average discount rate is 4 %.

Maturities of operating lease liabilities as of September 30, 2025 are presented in the table below (in millions):

Fiscal Period:

Remainder of 2025 $ 35

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Other contractual commitments primarily consist of data center and IT operations, cloud services and sales and marketing activities related to our daily business operations.

There were no material contractual obligations that were entered into during the six months ended June 30, 2025 that were outside the ordinary course of business.

There were no material contractual obligations that were entered into during the nine months ended September 30, 2025 that were outside the ordinary course of business.

We have entered into various non-cancellable agreements with cloud service providers, under which we have committed to spend an aggregate of approximately $ 4.8 billion through 2030 on cloud services.

Under these agreements, we have minimum payments of approximately $ 220 million for the remainder of fiscal 2025, $ 340 million in fiscal 2026, $ 330 million in fiscal 2027, $ 500 million in fiscal 2028, $ 630 million in fiscal 2029 and $ 2.8 billion in 2030.

As of September 30, 2025, we have remaining payments under these agreements of approximately $ 180 million for the remainder of fiscal 2025, $ 340 million in fiscal 2026, $ 330 million in fiscal 2027, $ 500 million in fiscal 2028, $ 630 million in fiscal 2029 and $ 2.8 billion in 2030.

Payment schedules vary from the timing of actual service consumption.

In addition, we have entered into a non-cancellable agreement with an information technology equipment provider, under which we have committed to spend $ 1.9 billion through 2028 on capital expenditures to expand our data centers.

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Refer to Note 11 for further information regarding our 2030 Notes.

Further, $ 85 million of unrecognized tax benefits have been recorded as liabilities as of June 30, 2025.

Further, $ 102 million of unrecognized tax benefits have been recorded as liabilities as of September 30, 2025.

Legal Proceedings

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Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development, and general and administrative) at the consolidated level to manage the Company’s operations.

Other segment items included in consolidated net income are interest income, other expense, net and the provision for income taxes, which are reflected in the condensed consolidated statements of comprehensive income.

Other segment items included in consolidated net income are interest income, other income (expense), net and the provision for income taxes, which are reflected in the condensed consolidated statements of comprehensive income.

Geographic Information

Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Property and equipment, net by geographic area were as follows (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

North America (3)

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Total property and equipment, net $ 2,127 $ 1,763

(1) Revenues attributed to the United States were 94 % of North America revenues for each of the three and six months ended June 30, 2025 and 2024.

(1) Revenues attributed to the United States were 94 % of North America revenues for each of the three and nine months ended September 30, 2025 and 2024.

(2) Europe, the Middle East and Africa (“EMEA”).

(3) Property and equipment, net attributed to the United States were 79 % of property and equipment, net attributable to North America as of June 30, 2025 and December 31, 2024.

(3) Property and equipment, net attributed to the United States were 81 % and 79 % of property and equipment, net attributable to North America as of September 30, 2025 and December 31, 2024, respectively.

(19) Subsequent Event

On July 4, 2025, H.R.

1, the "One Big Beautiful Bill Act," was enacted into law, bringing significant amendments to the U.S.

This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act and introduces new tax measures affecting both businesses and individuals.

We are currently evaluating the impact of the legislation on our consolidated financial statements.

On October 29, 2025, we announced that our Board of Directors approved a 5 -for-1 split of our common stock, with a proportionate increase in authorized shares of common stock.

The stock split and increase in authorized shares of common stock, to be effected by an Amended and Restated Certification of Incorporation, is subject to shareholder approval at a Special Meeting of Shareholders scheduled to take place on December 5, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements