3 unchanged sentences
These statements include, but are not limited to, statements concerning:
−Removed: our expectations regarding drivers of and factors affecting growth in our business;
+Added: the cybersecurity landscape, our expectations regarding our platformization strategy and related progress and opportunities, long-term expectations regarding annual recurring revenue, product development strategy and expectations regarding artificial intelligence, expectations regarding our strategic partnerships, our expectations regarding drivers of and factors affecting growth in our business;
statements regarding expected profitability, trends in billing, our mix of product and subscription and support revenue, cost of revenue, gross margin, cash flows, operating expenses, including future share-based compensation expense, income taxes, investment plans, and liquidity;
23 unchanged sentences
• Results of Operations.
−Removed: A discussion of the nature and trends in our financial results and an analysis of our financial results comparing the three and six months ended January 31, 2024 to the three and six months ended January 31, 2023.
+Added: A discussion of the nature and trends in our financial results and an analysis of our financial results comparing the three and nine months ended April 30, 2024 to the three and nine months ended April 30, 2023.
• Liquidity and Capital Resources.
4 unchanged sentences
A discussion of expected impacts of impending accounting changes on financial information to be reported in the future.
−Removed: T able of Contents
We empower enterprises, organizations, service providers, and government entities to protect themselves against today’s most sophisticated cyber threats.
5 unchanged sentences
• Our network security platform, designed to deliver complete zero trust solutions to our customers, includes our hardware and software ML-Powered Next-Generation Firewalls, as well as a cloud-delivered Secure Access Service Edge (“SASE”).
−Removed: Prisma ® Access, our Security Services Edge (“SSE”) solution, when combined with Prisma SD-WAN, provides a comprehensive single-vendor SASE offering that is used to secure remote workforces and enable the cloud-delivered branch.
+Added: Prisma ® Access, our Security Services Edge (“SSE”) solution, when combined with Prisma SD-WAN, provides a comprehensive single-vendor SASE offering that is used to secure remote workforces and securely enable the cloud-delivered branch.
We have been recognized as a leader in network firewalls, SASE, SSE, and SD-WAN.
−Removed: Our network security platform also includes our cloud-delivered security services, such as Advanced Threat Prevention, Advanced WildFire ® , Advanced URL Filtering, DNS Security, IoT/OT Security, GlobalProtect ® , Enterprise Data Loss Prevention (“Enterprise DLP”), Artificial Intelligence for IT Operations (“AIOps”), SaaS Security API, and SaaS Security Inline.
+Added: Our network security platform also includes our cloud-delivered security services, such as Advanced Threat Prevention, Advanced WildFire ® , Advanced URL Filtering, Advanced DNS Security, IoT/OT Security, GlobalProtect ® , Enterprise Data Loss Prevention (“Enterprise DLP”), Artificial Intelligence for IT Operations (“AIOps”), SaaS Security API, SaaS Security Inline, and Artificial Intelligence (“AI”) Access Security.
Through these add-on security services, our customers are able to secure their content, applications, users, and devices across their entire organization.
Strata Cloud Manager, our network security management solution, can centrally manage our network security platform irrespective of form factor, location, or scale.
+Added: Strata Cloud Manager includes the Strata Copilot which provides a natural language interface to simplify and accelerate platform management.
Cloud Security:
• We enable cloud-native security through our Prisma Cloud Code to Cloud TM platform.
−Removed: As a comprehensive Cloud Native Application Protection Platform (“CNAPP”), Prisma Cloud secures multi- and hybrid-cloud environments for applications, data, and the entire cloud native technology stack across the full development lifecycle, from code to runtime.
+Added: As a comprehensive Cloud Native Application Protection Platform (“CNAPP”), Prisma Cloud secures multi- and hybrid-cloud environments for applications, data, and the entire cloud native technology stack across the full development lifecycle, from code to cloud.
We also offer our VM-Series and CN-Series virtual firewalls for inline network security on multi- and hybrid-cloud environments.
1 unchanged sentence
• We deliver the next generation of security automation, security analytics, endpoint security, and attack surface management solutions through our Cortex portfolio.
−Removed: These include Cortex XSIAM, our AI-driven security operations platform, Cortex XDR ® for the prevention, detection, and response to complex cybersecurity attacks on the endpoint, Cortex XSOAR ® for security orchestration, automation, and response (“SOAR”), and Cortex Xpanse TM for attack surface management (“ASM”).
+Added: These include Cortex XSIAM, our AI-driven security operations platform, Cortex XDR ® for the prevention, detection, and response to complex cybersecurity attacks, Cortex XSOAR ® for security orchestration, automation, and response (“SOAR”), and Cortex Xpanse TM for attack surface management (“ASM”).
These products are delivered as SaaS or software subscriptions.
3 unchanged sentences
Additionally, Unit 42 offers managed detection and response services and managed threat hunting services.
−Removed: For the second quarter of fiscal 2024 and 2023, total revenue was $2.0 billion and $1.7 billion, respectively, representing year-over-year growth of 19.3%.
+Added: For the third quarter of fiscal 2024 and 2023, total revenue was $2.0 billion and $1.7 billion, respectively, representing year-over-year growth of 15.3%.
Our growth reflects the increased adoption of our portfolio, which consists of product, subscriptions, and support.
We believe our portfolio will enable us to benefit from recurring revenues and new revenues as we continue to grow our end-customer base.
−Removed: As of January 31, 2024, we had end-customers in over 180 countries.
+Added: As of April 30, 2024, we had end-customers in over 180 countries.
Our end-customers represent a broad range of industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications, and include almost all of the Fortune 100 companies and a majority of the Global 2000 companies.
1 unchanged sentence
We primarily use a two-tiered, indirect fulfillment model whereby we sell our products, subscriptions, and support to our distributors, which, in turn, sell to our resellers, which then sell to our end-customers.
−Removed: T able of Contents
−Removed: Our product revenue grew to $390.7 million, or 19.8% of total revenue, for the second quarter of fiscal 2024, representing year-over-year growth of 10.7%.
+Added: Our product revenue grew to $391.0 million, or 19.7% of total revenue, for the third quarter of fiscal 2024.
Product revenue is derived from sales of our appliances, primarily our ML-Powered Next-Generation Firewall.
4 unchanged sentences
The same firewall functionality that is delivered in our physical appliances is also available in our VM-Series virtual firewalls, which secure virtualized and cloud-based computing environments, and in our CN-Series container firewalls, which secure container environments and traffic.
−Removed: Our subscription and support revenue grew to $1.6 billion, or 80.2% of total revenue, for the second quarter of fiscal 2024, representing year-over-year growth of 21.7%.
+Added: Our subscription and support revenue grew to $1.6 billion, or 80.3% of total revenue, for the third quarter of fiscal 2024, representing year-over-year growth of 19.6%.
Our subscriptions provide our end-customers with near real-time access to the latest antivirus, intrusion prevention, web filtering, modern malware prevention, data loss prevention, and cloud access security broker capabilities across the network, endpoints, and the cloud.
3 unchanged sentences
We continue to invest in innovation as we evolve and further extend the capabilities of our portfolio, as we believe that innovation and timely development of new features and products are essential to meeting the needs of our end-customers and improving our competitive position.
−Removed: For example, in November 2023, we announced PAN-OS 11.1 Cosmos which will help our customers stay ahead of attackers and centrally manage and operate their network security estate.
−Removed: We also introduced Cortex XSIAM 2.0 which includes a new bring-your-own machine learning framework to enable customers to add their own custom Artificial Intelligence (“AI”) models on the XSIAM data lake.
−Removed: We believe that the growth of our business and our short-term and long-term success are dependent upon many factors, including our ability to extend our technology leadership, grow our base of end-customers, expand deployment of our portfolio and support offerings within existing end-customers, and focus on end-customer satisfaction.
+Added: For example, in April 2024, we introduced new Cortex XSIAM features that enable security operations teams to identify and remediate cloud threats in real-time.
+Added: We believe that the growth of our business and our short-term and long-term success are dependent upon many factors, including our ability to extend our technology leadership, grow our base of end-customers, expand deployment of our portfolio and support offerings within existing end-customers, focus on end-customer satisfaction, and address any product vulnerabilities.
To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative systems and controls, and our ability to manage headcount, capital, and processes in an efficient manner.
9 unchanged sentences
and China, which could have an adverse impact on our business or results of operations in future periods.
−Removed: T able of Contents
Key Financial Metrics
1 unchanged sentence
We discuss revenue, gross margin, and the components of operating income and margin below under “Results of Operations.”
−Removed: January 31, 2024 July 31, 2023
+Added: April 30, 2024 July 31, 2023
(in millions)
1 unchanged sentence
Cash, cash equivalents, and investments $ 6,394.8 $ 5,437.9
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 2024 2023
19 unchanged sentences
We calculate billings in the following manner:
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 2024 2023
3 unchanged sentences
Billings $ 2,334.0 $ 2,256.2 $ 6,705.7 $ 6,034.3
−Removed: T able of Contents
• Cash Flow Provided by Operating Activities.
9 unchanged sentences
GAAP, is provided below:
−Removed: Six Months Ended January 31,
+Added: Nine Months Ended April 30,
(in millions)
5 unchanged sentences
Net cash used in financing activities $ (1,163.8) $ (91.5)
−Removed: T able of Contents
Results of Operations
1 unchanged sentence
The period-to-period comparison of results is not necessarily indicative of results for future periods.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 2024 2023
23 unchanged sentences
(1) Includes share-based compensation as follows:
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 2024 2023
6 unchanged sentences
Total share-based compensation $ 263.5 $ 277.2 $ 809.8 $ 833.1
−Removed: T able of Contents
Our revenue consists of product revenue and subscription and support revenue.
6 unchanged sentences
We recognize product revenue at the time of hardware shipment or delivery of software license.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Product $ 391.0 $ 388.1 $ 2.9 0.7 % $ 1,122.8 $ 1,071.0 $ 51.8 4.8 %
−Removed: Product revenue for the three and six months ended January 31, 2024 increased compared to the same periods in 2023 driven by increased software revenue primarily due to a go-to-market strategy for certain Network Security offerings, and increased demand for our new generation of hardware products, partially offset by decreased revenue from our prior generation of hardware products.
+Added: Product revenue was flat for the three months ended April 30, 2024 compared to the same period in 2023 driven by increased software revenue and increased demand for our new generation of hardware products, offset by decreased demand for our prior generation of hardware products.
+Added: Product revenue increased for the nine months ended April 30, 2024 compared to the same period in 2023 driven by increased software revenue primarily due to a go-to-market strategy for certain Network Security offerings, and increased demand for our new generation of hardware products, partially offset by decreased demand for our prior generation of hardware products.
SUBSCRIPTION AND SUPPORT REVENUE
3 unchanged sentences
As a percentage of total revenue, we expect our subscription and support revenue to vary from quarter to quarter and increase over the long term as we introduce new subscriptions, renew existing subscription and support contracts, and expand our installed end-customer base.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
4 unchanged sentences
Total subscription and support $ 1,593.8 $ 1,332.8 $ 261.0 19.6 % $ 4,715.2 $ 3,868.4 $ 846.8 21.9 %
−Removed: Subscription and support revenue increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to increased demand for our subscription and support offerings from our end-customers.
+Added: Subscription and support revenue increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to increased demand for our subscription and support offerings from our end-customers.
The mix between subscription revenue and support revenue will fluctuate over time, depending on the introduction of new subscription offerings, renewals of support services, and our ability to increase sales to new and existing end-customers.
−Removed: T able of Contents
REVENUE BY GEOGRAPHIC THEATER
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
5 unchanged sentences
Total revenue $ 1,984.8 $ 1,720.9 $ 263.9 15.3 % $ 5,838.0 $ 4,939.4 $ 898.6 18.2 %
−Removed: Revenue from the Americas, Europe, the Middle East, and Africa (“EMEA”), and Asia Pacific and Japan (“APAC”), increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 as we continued to increase investment in our global sales force in order to support our growth and innovation.
−Removed: Our three geographic theaters had similar year-over-year revenue growth rates for the three and six months ended January 31, 2024 compared to the same periods in 2023, with the Americas contributing the highest increase in revenue due to its larger scale.
+Added: Revenue from the Americas, Europe, the Middle East, and Africa (“EMEA”), and Asia Pacific and Japan (“APAC”), increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 as we continued to increase investment in our global sales force in order to support our growth and innovation, with the Americas contributing the highest increase in revenue due to its larger scale.
COST OF REVENUE
5 unchanged sentences
We expect our cost of product revenue to fluctuate with our revenue from hardware products.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Cost of product revenue $ 77.9 $ 93.4 $ (15.5) (16.6) % $ 243.5 $ 314.0 $ (70.5) (22.5) %
−Removed: Cost of product revenue decreased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to decreased demand for our prior generation of hardware products and lower costs largely driven by an easing of supply chain challenges, partially offset by increased demand for our new generation hardware products.
−Removed: T able of Contents
+Added: Cost of product revenue decreased for the three months ended April 30, 2024 compared to the same period in 2023 primarily due to decreased demand for our prior generation of hardware products and lower other product costs, partially offset by increased demand for our new generation hardware products.
+Added: Cost of product revenue decreased for the nine months ended April 30, 2024 compared to the same period in 2023 primarily due to decreased demand for our prior generation of hardware products and lower costs largely driven by an easing of supply chain challenges, partially offset by increased demand for our new generation hardware products.
COST OF SUBSCRIPTION AND SUPPORT REVENUE
1 unchanged sentence
We expect our cost of subscription and support revenue to increase as our installed end-customer base grows and adoption of our cloud-based subscription offerings increases.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Cost of subscription and support revenue $ 435.7 $ 381.4 $ 54.3 14.2 % $ 1,242.0 $ 1,088.9 $ 153.1 14.1 %
−Removed: Cost of subscription and support revenue increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to increased costs to support the growth of our subscription and support offerings.
−Removed: Cloud hosting service costs, which support our cloud-based subscription offerings, increased $22.2 million for the three months ended January 31, 2024 compared to the same period in 2023, and increased $48.4 million for the six months ended January 31, 2024 compared to the same period in 2023.
−Removed: Personnel costs grew $9.9 million for the three months ended January 31, 2024 compared to the same period in 2023, and grew $32.9 million for the six months ended January 31, 2024 compared to the same period in 2023, primarily due to headcount growth.
+Added: Cost of subscription and support revenue increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to increased costs to support the growth of our subscription and support offerings.
+Added: Cloud hosting service costs, which support our cloud-based subscription offerings, increased $30.4 million for the three months ended April 30, 2024 compared to the same period in 2023, and increased $78.8 million for the nine months ended April 30, 2024 compared to the same period in 2023.
+Added: Personnel costs grew $6.5 million for the three months ended April 30, 2024 compared to the same period in 2023, and grew $39.4 million for the nine months ended April 30, 2024 compared to the same period in 2023, primarily due to headcount growth.
+Added: The increase in cost of subscription and support revenue for the three months ended April 30, 2024 was further driven by amortization of intangible assets from our recent acquisitions.
Gross margin has been and will continue to be affected by a variety of factors, including the introduction of new products, manufacturing costs, the average sales price of our products, cloud hosting service costs, personnel costs, the mix of products sold, and the mix of revenue between product and subscription and support offerings.
1 unchanged sentence
We expect our gross margins to vary over time depending on the factors described above.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 2024 2023
4 unchanged sentences
Total gross profit $ 1,471.2 74.1 % $ 1,246.1 72.4 % $ 4,352.5 74.6 % $ 3,536.5 71.6 %
−Removed: Product gross margin increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to lower costs largely driven by an easing of supply chain challenges and increased software revenue.
−Removed: Subscription and support gross margin increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to our growth in subscription and support revenue, which outpaced the subscription and support costs.
−Removed: T able of Contents
+Added: Product gross margin increased for the three months ended April 30, 2024 compared to the same period in 2023 primarily due to lower other product costs and increased software revenue.
+Added: Product gross margin increased for the nine months ended April 30, 2024 compared to the same period in 2023 primarily due to lower costs largely driven by an easing of supply chain challenges and increased software revenue.
+Added: Subscription and support gross margin increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to our growth in subscription and support revenue, which outpaced the subscription and support costs.
OPERATING EXPENSES
3 unchanged sentences
We expect operating expenses generally to increase in absolute dollars and to decrease over the long term as a percentage of revenue as we continue to scale our business.
−Removed: As of January 31, 2024, we expect to recognize approximately $2.3 billion of share-based compensation expense over a weighted-average period of approximately 2.8 years, excluding additional share-based compensation expense related to any future grants of share-based awards.
+Added: As of April 30, 2024, we expect to recognize approximately $2.2 billion of share-based compensation expense over a weighted-average period of approximately 2.7 years, excluding additional share-based compensation expense related to any future grants of share-based awards.
Share-based compensation expense is generally recognized on a straight-line basis over the requisite service periods of the awards.
3 unchanged sentences
We expect research and development expense to increase in absolute dollars as we continue to invest in our future products and services, although our research and development expense may fluctuate as a percentage of total revenue.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Research and development $ 457.2 $ 413.7 $ 43.5 10.5 % $ 1,314.6 $ 1,189.6 $ 125.0 10.5 %
−Removed: Research and development expense increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to increased personnel costs, which grew $34.3 million for the three months ended January 31, 2024 compared to the same period in 2023, and grew $61.7 million for the six months ended January 31, 2024 compared to the same period in 2023, largely due to headcount growth.
+Added: Research and development expense increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to increased personnel costs, which grew $29.4 million for the three months ended April 30, 2024 compared to the same period in 2023, and grew $91.1 million for the nine months ended April 30, 2024 compared to the same period in 2023, largely due to headcount growth.
+Added: The remaining increase in research and development expense was further driven by increased shared costs.
SALES AND MARKETING
3 unchanged sentences
We expect sales and marketing expense to continue to increase in absolute dollars as we increase the size of our sales and marketing organizations to grow our customer base, increase touch points with end-customers, and expand our global presence, although our sales and marketing expense may fluctuate as a percentage of total revenue.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Sales and marketing $ 718.7 $ 639.5 $ 79.2 12.4 % $ 2,052.2 $ 1,880.0 $ 172.2 9.2 %
−Removed: Sales and marketing expense increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to increased costs associated with sales and marketing events and go-to-market initiatives, which grew $33.8 million for the three months ended January 31, 2024 compared to the same period in 2023, and grew $61.4 million for the six months ended January 31, 2024 compared to the same period in 2023.
−Removed: The remaining increases in both periods were primarily driven by increased personnel costs, largely due to headcount growth.
−Removed: T able of Contents
+Added: Sales and marketing expense increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to increased personnel costs and costs associated with sales and marketing events and go-to-market initiatives.
+Added: Personnel costs grew $42.7 million for the three months ended April 30, 2024 compared to the same period in 2023, and grew $76.7 million for the nine months ended April 30, 2024 compared to the same period in 2023, largely due to headcount growth.
+Added: Costs associated with sales and marketing events and go-to-market initiatives grew $22.3 million for the three months ended April 30, 2024 compared to the same period in 2023, and grew $83.7 million for the nine months ended April 30, 2024 compared to the same period in 2023.
GENERAL AND ADMINISTRATIVE
1 unchanged sentence
We expect general and administrative expense to increase in absolute dollars over time as we increase the size of our general and administrative organizations and incur additional costs to support our business growth, although our general and administrative expense may fluctuate as a percentage of total revenue.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
General and administrative $ 118.6 $ 114.2 $ 4.4 3.9 % $ 540.2 $ 333.1 $ 207.1 62.2 %
−Removed: General and administrative expense increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to a litigation accrual of $176.8 million during the three months ended January 31, 2024 relating to an ongoing patent infringement lawsuit.
+Added: General and administrative expense was relatively flat for the three months ended April 30, 2024 compared to the same period in 2023.
+Added: General and administrative expense increased for the nine months ended April 30, 2024 compared to the same period in 2023 primarily due to a litigation accrual of $180.5 million during the nine months ended April 30, 2024 relating to an ongoing patent infringement lawsuit.
INTEREST EXPENSE
Interest expense primarily consists of interest expense related to our 0.75% Convertible Senior Notes due 2023 (the “2023 Notes”) and our 0.375% Convertible Senior Notes due 2025 (the “2025 Notes,” and together with “2023 Notes,” the “Notes”).
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Interest expense $ 2.3 $ 7.8 $ (5.5) (70.5) % $ 8.0 $ 21.5 $ (13.5) (62.8) %
−Removed: Interest expense decreased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to conversions of the 2023 Notes prior to or upon maturity in July 2023.
+Added: Interest expense decreased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to conversions of the 2023 Notes prior to or upon maturity in July 2023.
Refer to Note 9.
2 unchanged sentences
Other income, net includes interest income earned on our cash, cash equivalents, and investments, and gains and losses from foreign currency remeasurement and foreign currency transactions.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
2 unchanged sentences
Other income, net $ 76.8 $ 60.1 $ 16.7 27.8 % $ 231.8 $ 137.5 $ 94.3 68.6 %
−Removed: Other income, net increased for the three and six months ended January 31, 2024 compared to the same periods in 2023 primarily due to higher interest income as a result of higher interest rates and higher average cash, cash equivalent, and investment balances for the three and six months ended January 31, 2024 compared to the same periods in 2023.
−Removed: T able of Contents
+Added: Other income, net increased for the three and nine months ended April 30, 2024 compared to the same periods in 2023 primarily due to higher interest income as a result of higher interest rates and higher average cash, cash equivalent, and investment balances for the three and nine months ended April 30, 2024 compared to the same periods in 2023.
PROVISION FOR (BENEFIT FROM) INCOME TAXES
1 unchanged sentence
taxes, foreign income taxes, and withholding taxes.
−Removed: Our provision for income taxes was offset by tax benefits from the release of our valuation allowance on U.S.
+Added: Our provision for income taxes during fiscal 2024 was offset by tax benefits from the release of our valuation allowance on U.S.
federal, U.S.
1 unchanged sentence
A portion of our valuation allowance release is included in our estimated annual effective tax rate.
−Removed: Accordingly, we will continue to realize related tax benefits for the remainder of fiscal 2024, in amounts much less than that recorded during the three and six months ended January 31, 2024.
+Added: Accordingly, we will continue to realize related tax benefits for the remainder of fiscal 2024, in amounts much less than that recorded during the three months ended January 31, 2024.
We continue to maintain a valuation allowance for California and certain foreign deferred tax assets, including net operating loss carryforwards and certain domestic tax credits.
−Removed: Three Months Ended January 31, Six Months Ended January 31,
+Added: Three Months Ended April 30, Nine Months Ended April 30,
2024 2023 Change 2024 2023 Change
4 unchanged sentences
* Not meaningful
−Removed: Our benefit from income taxes for the three and six months ended January 31, 2024 was primarily driven by the release of our valuation allowance on U.S.
+Added: Our benefit from income taxes for the three months ended April 30, 2024 was primarily driven by excess tax benefits from share-based compensation and the release of our valuation allowance on U.S.
federal, U.S.
states other than California, and United Kingdom deferred tax assets.
+Added: Our benefit from income taxes for the nine months ended April 30, 2024 was primarily driven by the release of our valuation allowance on U.S.
+Added: federal, U.S.
+Added: states other than California, and United Kingdom deferred tax assets.
Refer to Note 13.
1 unchanged sentence
Liquidity and Capital Resources
−Removed: January 31, 2024 July 31, 2023
+Added: April 30, 2024 July 31, 2023
(in millions)
5 unchanged sentences
Total cash, cash equivalents, and investments $ 6,394.8 $ 5,437.9
−Removed: (1) Current liabilities included net carrying amounts of convertible senior notes of $1.8 billion and $2.0 billion as of January 31, 2024 and July 31, 2023, respectively.
+Added: (1) Current liabilities included net carrying amounts of convertible senior notes of $1.2 billion and $2.0 billion as of April 30, 2024 and July 31, 2023, respectively.
Refer to Note 9 .
Debt in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on the Notes.
−Removed: As of January 31, 2024, our total cash, cash equivalents, and investments of $7.0 billion were held for general corporate purposes.
−Removed: As of January 31, 2024, we had no unremitted earnings when evaluating our outside basis difference relating to our U.S.
+Added: As of April 30, 2024, our total cash, cash equivalents, and investments of $6.4 billion were held for general corporate purposes.
+Added: As of April 30, 2024, we had no unremitted earnings when evaluating our outside basis difference relating to our U.S.
investment in foreign subsidiaries.
3 unchanged sentences
As a result of this change, we have paid significantly more U.S.
−Removed: cash taxes during the six months ended January 31, 2024.
−Removed: T able of Contents
+Added: cash taxes during the nine months ended April 30, 2024 and we expect our cash tax payments to increase in future periods.
In June 2020, we issued the 2025 Notes with an aggregate principal amount of $2.0 billion.
2 unchanged sentences
Upon conversion of the 2025 Notes, we will pay cash equal to the aggregate principal amount of the 2025 Notes to be converted, and, at our election, we will pay or deliver cash and/or shares of our common stock for the amount of our conversion obligation in excess of the aggregate principal amount of the 2025 Notes being converted.
−Removed: During the three and six months ended January 31, 2024, holders of the 2025 Notes converted $126.3 million and $172.3 million, respectively, in aggregate principal amount of the 2025 Notes, which we repaid in cash.
−Removed: We also issued 0.8 million and 1.1 million shares of our common stock to the holders of the 2025 Notes during the three and six months ended January 31, 2024, respectively, for the conversion value in excess of the principal amount of the 2025 Notes converted, which were fully offset by shares we received from the corresponding exercise of the associated note hedges.
−Removed: Subsequent to January 31, 2024, through the filing date of this Quarterly Report on Form 10-Q, $581.0 million in aggregate principal amount of the 2025 Notes was converted or had been submitted by the holders for conversion and will settle during the fiscal quarter ending April 30, 2024.
−Removed: The sale price condition for the 2025 Notes was met during the fiscal quarter ended January 31, 2024, and as a result, holders may convert their 2025 Notes during the fiscal quarter ending April 30, 2024.
+Added: During the three and nine months ended April 30, 2024, holders of the 2025 Notes converted $661.8 million and $834.1 million, respectively, in aggregate principal amount of the 2025 Notes, which we repaid in cash.
+Added: We also issued 4.6 million and 5.7 million shares of our common stock to the holders of the 2025 Notes during the three and nine months ended April 30, 2024, respectively, for the conversion value in excess of the principal amount of the 2025 Notes converted, which were fully offset by shares we received from the corresponding exercise of the note hedges.
+Added: Subsequent to April 30, 2024, through the filing date of this Quarterly Report on Form 10-Q, $123.2 million in aggregate principal amount of the 2025 Notes was converted or had been submitted by the holders for conversion and will settle during the fiscal quarter ending July 31, 2024.
+Added: The sale price condition for the 2025 Notes was met during the fiscal quarter ended April 30, 2024, and as a result, holders may convert their 2025 Notes during the fiscal quarter ending July 31, 2024.
If all of the holders convert their 2025 Notes during this period, we would be obligated to settle the $1.2 billion principal amount of the 2025 Notes in cash.
−Removed: We believe that our cash provided by operating activities, our existing cash, cash equivalents, and investments, and existing sources of and access to financing will be sufficient to meet our anticipated cash needs should the holders choose to convert their 2025 Notes during the fiscal quarter ending April 30, 2024 or hold the 2025 Notes until maturity on June 1, 2025.
−Removed: As of January 31, 2024, $1.8 billion of our 2025 Notes remained outstanding.
+Added: We believe that our cash provided by operating activities, our existing cash, cash equivalents, and investments, and existing sources of and access to financing will be sufficient to meet our anticipated cash needs should the holders choose to convert their 2025 Notes during the fiscal quarter ending July 31, 2024 or hold the 2025 Notes until maturity on June 1, 2025.
+Added: As of April 30, 2024, $1.2 billion of our 2025 Notes remained outstanding.
Refer to Note 9.
2 unchanged sentences
The interest rates and commitment fees are also subject to upward and downward adjustments based on our progress towards the achievement of certain sustainability goals related to greenhouse gas emissions.
−Removed: As of January 31, 2024, there were no amounts outstanding, and we were in compliance with all covenants under the Credit Agreement.
+Added: As of April 30, 2024, there were no amounts outstanding, and we were in compliance with all covenants under the Credit Agreement.
Refer to Note 9.
4 unchanged sentences
Repurchases will be funded from available working capital and may be made at management’s discretion from time to time.
−Removed: As of January 31, 2024, $1.0 billion remained available for future share repurchases under this repurchase program.
+Added: As of April 30, 2024, $500.0 million remained available for future share repurchases under this repurchase program.
The repurchase authorization will expire on December 31, 2024, and may be suspended or discontinued at any time without prior notice.
3 unchanged sentences
We have entered into various non-cancelable operating leases, primarily for our facilities, with original lease periods expiring through the fiscal year ending July 31, 2036, with the most significant leases relating to our corporate headquarters in Santa Clara, California.
−Removed: As of January 31, 2024, we have total operating lease obligations of $427.8 million recorded on our condensed consolidated balance sheet.
−Removed: As of January 31, 2024, our commitments to purchase products, components, cloud and other services totaled $5.2 billion.
+Added: As of April 30, 2024, we have total operating lease obligations of $432.3 million recorded on our condensed consolidated balance sheet.
+Added: As of April 30, 2024, our commitments to purchase products, components, cloud and other services totaled $4.7 billion.
Refer to Note 10.
Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on these commitments.
−Removed: T able of Contents
−Removed: The following table summarizes our cash flows for the six months ended January 31, 2024 and 2023:
−Removed: Six Months Ended January 31,
+Added: The following table summarizes our cash flows for the nine months ended April 30, 2024 and 2023:
+Added: Nine Months Ended April 30,
(in millions)
13 unchanged sentences
Our largest source of cash provided by our operations is receipts from our billings.
−Removed: Cash provided by operating activities during the six months ended January 31, 2024 was $2.2 billion, an increase of $284.7 million compared to the same period in 2023.
−Removed: The increase was primarily due to growth of our business as reflected by increases in collections during the six months ended January 31, 2024, partially offset by higher cash expenditure to support our business growth.
+Added: Cash provided by operating activities during the nine months ended April 30, 2024 was $2.7 billion, an increase of $381.5 million compared to the same period in 2023.
+Added: The increase was primarily due to growth of our business as reflected by increases in collections during the nine months ended April 30, 2024, partially offset by higher cash expenditure to support our business growth.
INVESTING ACTIVITIES
1 unchanged sentence
We expect to continue such activities as our business grows.
−Removed: Cash used in investing activities during the six months ended January 31, 2024 was $1.5 billion, a decrease of $1.0 billion compared to the same period in 2023.
−Removed: The decrease was primarily due to a decrease in purchases of investments, partially offset by an increase in net cash payments for business acquisitions during the six months ended January 31, 2024.
+Added: Cash used in investing activities during the nine months ended April 30, 2024 was $1.3 billion, a decrease of $1.1 billion compared to the same period in 2023.
+Added: The decrease was primarily due to a decrease in purchases of investments, partially offset by an increase in net cash payments for business acquisitions and a decrease in proceeds from sales and maturities of investments during the nine months ended April 30, 2024.
FINANCING ACTIVITIES
−Removed: Our financing activities have consisted of cash used to repurchase shares of our common stock, proceeds from sales of shares through employee equity incentive plans, and payments for tax withholding obligations of certain employees related to the net share settlement of equity awards.
−Removed: Cash used in financing activities during the six months ended January 31, 2024 was $114.4 million, a decrease of $105.3 million compared to the same period in 2023.
−Removed: The decrease was primarily due to a decrease in cash used to repurchase our common stock, partially offset by early repayments of our 2025 Notes during the six months ended January 31, 2024.
−Removed: T able of Contents
+Added: Our financing activities have consisted of repayments of our convertible senior notes, cash used to repurchase shares of our common stock, proceeds from sales of shares through employee equity incentive plans, and payments for tax withholding obligations of certain employees related to the net share settlement of equity awards.
+Added: Cash used in financing activities during the nine months ended April 30, 2024 was $1.2 billion, an increase of $1.1 billion compared to the same period in 2023.
+Added: The increase was primarily due to early repayments of our 2025 Notes and an increase in cash used to repurchase our common stock during the nine months ended April 30, 2024.
Critical Accounting Estimates
11 unchanged sentences
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.