37 unchanged sentences
Auditing the Company’s revenue recognition was complex, including the identification and determination of distinct performance obligations and the timing of revenue recognition.
−Removed: For example, there were nonstandard terms and conditions that required judgment to determine the distinct performance obligations and the impact on the timing of revenue recognition.
+Added: For example, there were certain customer arrangements with nonstandard terms and conditions that required judgment to determine the distinct performance obligations and the impact on the timing of revenue recognition.
How We Addressed
5 unchanged sentences
We have served as the Company’s auditor since 2009.
−Removed: San Jose, California
+Added: San Mateo, California
September 6, 2024
7 unchanged sentences
Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.
+Added: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
13 unchanged sentences
/s/ Ernst & Young LLP
−Removed: San Jose, California
+Added: San Mateo, California
September 6, 2024
5 unchanged sentences
Short-term investments 1,043.6 1,254.7
−Removed: Accounts receivable, net of allowance for credit losses of $ 7.8 and $ 8.9 at July 31, 2023 and July 31, 2022, respectively
+Added: Accounts receivable, net of allowance for credit losses of $ 7.5 and $ 7.8 as of July 31, 2024 and July 31, 2023, respectively
2,618.6 2,463.2
10 unchanged sentences
Intangible assets, net 374.9 315.4
+Added: Deferred tax assets
Other assets 352.9 321.7
9 unchanged sentences
Long-term deferred revenue 5,939.4 4,621.8
+Added: Deferred tax liabilities
Long-term operating lease liabilities 380.5 279.2
6 unchanged sentences
100.0 shares authorized;
−Removed: none issued and outstanding at July 31, 2023 and July 31, 2022
+Added: none issued and outstanding as of July 31, 2024 and July 31, 2023
Common stock and additional paid-in capital;
1 unchanged sentence
1,000.0 shares authorized;
−Removed: 308.3 and 298.8 shares issued and outstanding at July 31, 2023 and July 31, 2022, respectively
+Added: 325.1 and 308.3 shares issued and outstanding as of July 31, 2024 and July 31, 2023, respectively
3,821.1 3,019.0
Accumulated other comprehensive loss ( 1.6 ) ( 43.2 )
−Removed: Accumulated deficit ( 1,227.4 ) ( 1,667.1 )
+Added: Retained earnings (accumulated deficit)
+Added: 1,350.2 ( 1,227.4 )
Total stockholders’ equity 5,169.7 1,748.4
25 unchanged sentences
988.3 566.3 ( 207.2 )
−Removed: Provision for income taxes 126.6 59.8 33.9
+Added: Provision for (benefit from) income taxes
+Added: ( 1,589.3 ) 126.6 59.8
Net income (loss)
23 unchanged sentences
(In millions)
−Removed: Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity
+Added: Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit)
+Added: Total Stockholders’ Equity
Shares Amount
Balance as of July 31, 2021 291.9 $ 2,311.2 $ ( 9.9 ) $ ( 1,666.8 ) $ 634.5
+Added: Cumulative-effect adjustment from adoption of new accounting pronouncement — ( 581.9 ) — 266.7 ( 315.2 )
Net loss — — — ( 267.0 ) ( 267.0 )
4 unchanged sentences
Repurchase and retirement of common stock ( 5.4 ) ( 915.0 ) — — ( 915.0 )
−Removed: Issuance of common and restricted common stock in connection with acquisitions 4.0 340.7 — — 340.7
−Removed: Temporary equity reclassification — ( 129.1 ) — — ( 129.1 )
Balance as of July 31, 2022 298.8 1,932.7 ( 55.6 ) ( 1,667.1 ) 210.0
−Removed: Cumulative-effect adjustment from adoption of new accounting pronouncement — ( 581.9 ) — 266.7 ( 315.2 )
−Removed: Net loss — — — ( 267.0 ) ( 267.0 )
−Removed: Other comprehensive loss — — ( 45.7 ) — ( 45.7 )
+Added: — — — 439.7 439.7
+Added: Other comprehensive income
+Added: — — 12.4 — 12.4
Issuance of common stock in connection with employee equity incentive plans 11.3 259.7 — — 259.7
2 unchanged sentences
Repurchase and retirement of common stock ( 1.8 ) ( 250.0 ) — — ( 250.0 )
+Added: Settlement of convertible notes 11.4 — — — —
+Added: Settlement of note hedges
+Added: ( 11.4 ) — — — —
Balance as of July 31, 2023 308.3 3,019.0 ( 43.2 ) ( 1,227.4 ) 1,748.4
7 unchanged sentences
Settlement of note hedges ( 7.0 ) — — — —
+Added: Settlement of warrants 9.0 — — — —
Balance as of July 31, 2024 325.1 $ 3,821.1 $ ( 1.6 ) $ 1,350.2 $ 5,169.7
9 unchanged sentences
Share-based compensation for equity-based awards 1,075.4 1,074.5 1,011.1
+Added: Deferred income taxes ( 2,033.7 ) 12.5 ( 3.1 )
Depreciation and amortization 283.3 282.2 282.6
Amortization of deferred contract costs 446.0 413.4 362.1
−Removed: Amortization of debt discount and debt issuance costs 6.7 7.2 142.9
+Added: Amortization of debt issuance costs
Reduction of operating lease right-of-use assets 55.3 49.9 54.4
Amortization of investment premiums, net of accretion of purchase discounts ( 60.1 ) ( 52.2 ) 13.5
−Removed: Repayments of convertible senior notes attributable to debt discount — — ( 0.1 )
Changes in operating assets and liabilities, net of effects of acquisitions:
12 unchanged sentences
Proceeds from maturities of investments 1,852.6 2,811.5 1,118.9
−Removed: Business acquisitions, net of cash acquired ( 204.5 ) ( 37.0 ) ( 777.3 )
+Added: Business acquisitions, net of cash and restricted cash acquired
+Added: ( 610.6 ) ( 204.5 ) ( 37.0 )
Purchases of property, equipment, and other assets ( 156.8 ) ( 146.3 ) ( 192.8 )
Net cash used in investing activities ( 1,509.9 ) ( 2,033.8 ) ( 933.4 )
−Removed: CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: (In millions)
−Removed: Year Ended July 31,
−Removed: 2023 2022 2021
Cash flows from financing activities
Repayments of convertible senior notes ( 1,033.7 ) ( 1,692.0 ) ( 0.6 )
−Removed: Payments for debt issuance costs — — ( 0.2 )
Repurchases of common stock ( 566.7 ) ( 272.7 ) ( 892.3 )
9 unchanged sentences
Restricted cash included in prepaid expenses and other current assets 11.6 6.9 6.3
−Removed: Restricted cash included in other assets — — 0.5
Total cash, cash equivalents, and restricted cash $ 1,546.8 $ 1,142.2 $ 2,124.8
46 unchanged sentences
As of July 31, 2024, no end-customers or channel partners represented 10% or more of our gross financing receivables.
−Removed: For fiscal 2023, three distributors represented 10% or more of our total revenue, representing 25.0 %, 12.8 %, and 11.9 %, respectively.
+Added: For fiscal 2024, four distributors represented 10% or more of our total revenue, representing 21.2 %, 13.2 %, 13.2 %, and 11.4 %, respectively.
No single end-customer accounted for more than 10% of our total revenue in fiscal 2024, 2023, or 2022.
2 unchanged sentences
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss).
−Removed: Our other comprehensive income (loss) includes unrealized gains and losses on available-for-sale investments and unrealized gains and losses on cash flow hedges.
+Added: Our other comprehensive income (loss) includes unrealized gains and losses on available-for-sale investments and unrealized gains and losses on cash flow hedges, net of tax effects.
Foreign Currency Transactions
13 unchanged sentences
Goodwill, intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis, only if impairment is indicated.
−Removed: The carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities due to their short-term nature.
+Added: Certain certificates of deposit, time deposits, and overnight sweep accounts recorded in cash and cash equivalents and short-term investments are stated at their carrying amounts, which approximate fair value due to their short maturities.
+Added: The carrying amounts of accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short-term nature.
Cash, Cash Equivalents, and Investments
23 unchanged sentences
Financing receivables deemed uncollectible are charged against the allowance for credit losses.
−Removed: We are exposed to foreign currency exchange risk.
+Added: We are exposed to foreign currency exchange risk, and we use derivative financial instruments to manage our foreign currency exchange risk.
+Added: Our derivative financial instruments are recorded at fair value, on a gross basis, as either assets or liabilities on our consolidated balance sheets.
Our revenue is transacted in U.S.
1 unchanged sentence
We enter into foreign currency derivative contracts with maturities of 24 months or less, which we designate as cash flow hedges, to manage the foreign currency exchange risk associated with our operating expenditures.
−Removed: Our derivative financial instruments are recorded at fair value, on a gross basis, as either assets or liabilities on our consolidated balance sheets.
−Removed: Gains or losses related to our cash flow hedges are recorded as a component of AOCI on our consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction on our consolidated statements of operations when the underlying hedged transaction is recognized in earnings.
−Removed: Gains or losses related to non-designated derivative instruments are recognized in other income, net on our consolidated statements of operations for each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold.
−Removed: Derivatives designated as cash flow hedges are classified on our consolidated statements of cash flows in the same manner as the underlying hedged transaction, primarily within cash flows from operating activities.
+Added: Gains or losses related to the effective portion of our cash flow hedges are recorded as a component of AOCI on our consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction on our consolidated statements of operations when the underlying hedged transaction is recognized in earnings.
+Added: In the event the underlying hedged transactions do not occur, or it becomes probable that they will not occur within the defined hedge period, the gains or losses on these related cash flow hedges are recognized in other income, net on our consolidated statements of operations.
+Added: Cash flows from foreign currency derivative contracts designated as cash flow hedges are classified on our consolidated statements of cash flows in the same manner as the underlying hedged transaction, primarily within cash flows from operating activities.
+Added: We also enter into foreign currency derivative contracts to hedge a portion of our outstanding monetary assets and liabilities denominated in foreign currencies.
+Added: These derivatives are not designated as hedging instruments for accounting purposes, and the related gains and losses are recorded in other income, net on our consolidated statements of operations.
Property and Equipment
50 unchanged sentences
Transaction costs related to the issuance of the notes are netted with the liability and are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes.
+Added: We adopted the new debt guidance using the modified-retrospective approach.
+Added: The adoption of this standard resulted in an increase to convertible senior notes, net of $ 444.3 million, a decrease to accumulated deficit of $ 266.7 million, a decrease to additional paid-in capital of $ 581.9 million, and a decrease to temporary equity of $ 129.1 million on August 1, 2021.
Revenue Recognition
61 unchanged sentences
Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date.
−Removed: The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rates implicit in most of our leases are not readily determinable.
+Added: The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rates implicit in our leases are not readily determinable.
Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
6 unchanged sentences
Payments under our lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities.
−Removed: Variable lease payments are primarily comprised of real estate taxes, common area maintenance charges, and insurance costs.
+Added: Variable lease payments primarily consist of real estate taxes, common area maintenance charges, and insurance costs.
We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns.
13 unchanged sentences
We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted, or a range of possible loss should be disclosed.
+Added: Recently Issued Accounting Pronouncements
+Added: Segment Reporting
+Added: In November 2023, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
+Added: The standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026, and requires retrospective application for all prior periods presented in the financial statements.
+Added: Early adoption is permitted.
+Added: We are currently evaluating the impact of this standard on our disclosures in the consolidated financial statements.
+Added: Income Tax Disclosures
+Added: In December 2023, the FASB issued authoritative guidance that requires consistent categories and greater disaggregation of information in the effective tax rate reconciliation and additional disclosures of income taxes paid by jurisdiction.
+Added: The standard is effective for our annual periods beginning in fiscal 2026 and could be applied either prospectively or retrospectively.
+Added: Early adoption is permitted.
+Added: We are currently evaluating the impact of this standard on our disclosures in the consolidated financial statements.
Disaggregation of Revenue
27 unchanged sentences
Money market funds $ 494.0 $ — $ — $ 494.0 $ 476.1 $ — $ — $ 476.1
−Removed: Certificates of deposit — — — — — 155.3 — 155.3
Commercial paper — 299.6 — 299.6 — 151.4 — 151.4
1 unchanged sentence
government and agency securities — 149.6 — 149.6 — — — —
−Removed: government and agency securities — — — — — 5.1 — 5.1
Total cash equivalents 494.0 467.4 — 961.4 476.1 151.4 — 627.5
16 unchanged sentences
Total prepaid expenses and other current assets — 4.1 — 4.1 — 19.1 — 19.1
+Added: July 31, 2024 July 31, 2023
+Added: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Other assets:
2 unchanged sentences
Total assets measured at fair value $ 494.0 $ 5,688.4 $ — $ 6,182.4 $ 476.1 $ 4,474.8 $ — $ 4,950.9
−Removed: July 31, 2023 July 31, 2022
−Removed: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Accrued and other liabilities:
5 unchanged sentences
Total liabilities measured at fair value $ — $ 16.2 $ — $ 16.2 $ — $ 20.3 $ — $ 20.3
+Added: The total estimated fair value of our financing receivables approximates their carrying amounts as of July 31, 2024 and 2023.
+Added: We consider the fair value of our financing receivables to be a Level 3 measurement as we use unobservable inputs in determining discounted cash flows to estimate the fair value.
Refer to Note 10.
7 unchanged sentences
Commercial paper $ 299.6 $ — $ — $ 299.6
+Added: Corporate debt securities 18.2 — — 18.2
+Added: government and agency securities 149.6 — — 149.6
Total available-for-sale cash equivalents $ 467.4 $ — $ — $ 467.4
9 unchanged sentences
Cash equivalents:
−Removed: Certificates of deposit $ 155.3 $ — $ — $ 155.3
Commercial paper $ 151.4 $ — $ — $ 151.4
−Removed: Corporate debt securities 19.5 — — 19.5
−Removed: government and agency securities 10.0 — — 10.0
−Removed: government and agency securities 5.0 0.1 — 5.1
Total available-for-sale cash equivalents $ 151.4 $ — $ — $ 151.4
6 unchanged sentences
Total available-for-sale investments $ 4,339.1 $ 1.5 $ ( 38.0 ) $ 4,302.6
+Added: As of July 31, 2024, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $ 1.5 million, which were related to $ 949.4 million of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were $ 6.0 million, which were related to $ 915.3 million of available-for-sale debt securities.
As of July 31, 2023, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $ 30.7 million, which were related to $ 3.4 billion of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were $ 7.3 million, which were related to $ 481.8 million of available-for-sale debt securities.
−Removed: As of July 31, 2022 the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $ 24.8 million, which were related to $ 2.0 billion of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were not material.
Unrealized losses related to our available-for-sale debt securities are primarily due to interest rate fluctuations as opposed to credit quality.
11 unchanged sentences
Marketable equity securities consist of money market funds and are included in cash and cash equivalents on our consolidated balance sheets.
−Removed: As of July 31, 2023 and 2022, the carrying value of our marketable equity securities were $ 476.1 million and $ 1.2 billion, respectively.
+Added: As of July 31, 2024 and 2023, the carrying amounts of our marketable equity securities were $ 494.0 million and $ 476.1 million, respectively.
There were no unrealized gains or losses recognized for these securities during the years ended July 31, 2024, 2023, and 2022.
17 unchanged sentences
$ 1,182.1 $ 653.3
−Removed: Our financing receivables portfolio primarily consists of high-quality investment-grade receivables as of July 31, 2023 and 2022.
+Added: The following table presents amortized cost basis of our financing receivables categorized by internal risk rating and year of origination (in millions):
+Added: Internal Risk Rating (1)
+Added: July 31, 2024 July 31, 2023
+Added: Fiscal Years Ended July 31,
+Added: Fiscal Years Ended July 31,
+Added: 2024 2023 2022 2021 Total
+Added: 2023 2022 2021 2020 Total
+Added: $ 885.9 $ 477.3 $ 14.7 $ 44.4 $ 1,422.3 $ 595.8 $ 50.6 $ 114.5 $ 1.2 $ 762.1
+Added: 272.2 172.0 21.1 1.1 466.4 219.4 40.1 4.4 1.5 265.4
+Added: 3.2 25.0 0.3 9.1 37.6 5.6 0.6 17.9 — 24.1
+Added: Amortized cost basis of financing receivables
+Added: $ 1,161.3 $ 674.3 $ 36.1 $ 54.6 $ 1,926.3 $ 820.8 $ 91.3 $ 136.8 $ 2.7 $ 1,051.6
+Added: (1) Internal risk ratings are categorized as 1 through 10, with the lowest rating representing the highest quality.
There was no significant activity in allowance for credit losses during the years ended July 31, 2024 and 2023.
1 unchanged sentence
Derivative Instruments
−Removed: As of July 31, 2023 and 2022, the total notional amount of our outstanding foreign currency forward contracts was $ 957.5 million and $ 856.9 million, respectively.
+Added: As of July 31, 2024 and 2023, the notional amount of our outstanding foreign currency forward contracts designated as cash flow hedges was $ 804.8 million and $ 824.1 million, respectively.
Refer to Note 3.
−Removed: Fair Value Measurements for the fair value of our derivative instruments as reported on our consolidated balance sheets as of July 31, 2023.
−Removed: As of July 31, 2023, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 0.7 million net gain, of which $ 2.7 million in gains are expected to be recognized into earnings within the next 12 months.
−Removed: As of July 31, 2022, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 24.8 million net loss.
−Removed: Cider Security Ltd.
−Removed: On December 20, 2022, we completed our acquisition of Cider Security Ltd.
−Removed: (“Cider”), a privately-held cloud security company.
−Removed: We expect the acquisition will support Prisma Cloud’s platform approach to securing the entire application security lifecycle from code to cloud.
−Removed: The total purchase consideration for the acquisition of Cider was $ 198.3 million, which consisted of the following (in millions):
+Added: Fair Value Measurements for the fair value of our derivative instruments as reported on our consolidated balance sheets as of July 31, 2024 and 2023.
+Added: As of July 31, 2024, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 10.6 million net loss, of which $ 7.9 million in losses are expected to be recognized into earnings within the next 12 months.
+Added: As of July 31, 2023, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 0.7 million net gain.
+Added: As of July 31, 2024 and 2023, the notional amount of our outstanding foreign currency forward contracts not designated as hedging instruments was $ 375.6 million and $ 133.4 million, respectively.
+Added: Dig Security Solutions Ltd.
+Added: On December 5, 2023, we completed our acquisition of Dig Security Solutions Ltd.
+Added: (“Dig”), a privately-held cyber security company.
+Added: We expect the acquisition will enhance our Prisma Cloud capabilities with a data security posture management solution that is intended to provide customers with visibility into, and secure data stored across, their multi-cloud environments.
+Added: The total purchase consideration for the acquisition of Dig was $ 255.4 million, which consisted of the following (in millions):
Fair value of replacement awards 7.8
6 unchanged sentences
Identified intangible assets 45.4
−Removed: Net liabilities assumed ( 6.5 )
+Added: Cash and restricted cash 22.1
+Added: Net assets acquired
Total $ 255.4
−Removed: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Cider technology into our platforms.
−Removed: The goodwill is expected to be deductible for U.S.
+Added: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Dig technology into our platforms.
+Added: The goodwill is deductible for U.S.
income tax purposes.
−Removed: The following table presents the identified intangible asset acquired (in millions, except years):
−Removed: Fair Value Estimated Useful Life
−Removed: Developed technology
−Removed: $ 27.8 5 years
−Removed: Other acquisition
−Removed: In April 2023, we completed an acquisition for total purchase consideration of $ 18.9 million in cash.
−Removed: We have accounted for this transaction as a business combination and recorded goodwill of $ 14.5 million.
−Removed: The goodwill is not deductible for income tax purposes.
−Removed: During the year ended July 31, 2022, we completed acquisitions for a combined total purchase consideration of $ 40.1 million, which was primarily cash.
−Removed: We have accounted for these transactions as business combinations, and recorded goodwill of $ 37.6 million.
−Removed: The goodwill is not deductible for income tax purposes.
−Removed: Bridgecrew Inc.
−Removed: On March 2, 2021, we completed our acquisition of Bridgecrew Inc.
−Removed: (“Bridgecrew”), a privately-held cloud security company.
−Removed: We expect the acquisition will expand our Prisma Cloud offering to deliver security across the full application lifecycle.
−Removed: The total purchase consideration for the acquisition of Bridgecrew was $ 156.9 million, which consisted of the following (in millions):
−Removed: Fair value of replacement awards 1.0
−Removed: Total $ 156.9
−Removed: As part of the acquisition, we issued $ 42.5 million of replacement awards, of which the portion attributable to services performed prior to the acquisition date was allocated to purchase consideration.
−Removed: The remaining fair value was allocated to future services and will be expensed over the remaining service periods as share-based compensation.
−Removed: We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on estimated fair values, as presented in the following table (in millions):
−Removed: Goodwill $ 129.6
−Removed: Identified intangible assets 21.6
−Removed: Net liabilities assumed ( 3.3 )
−Removed: Total $ 156.9
−Removed: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Bridgecrew technology into our platforms.
−Removed: The goodwill is not deductible for income tax purposes.
−Removed: The following table presents the identified intangible asset acquired (in millions, except years):
+Added: The following table presents details of the identified intangible asset acquired (in millions, except years):
Fair Value Estimated Useful Life
Developed technology $ 45.4 5 years
−Removed: On December 15, 2020, we completed our acquisition of Expanse Inc.
−Removed: (“Expanse”), a privately-held company specializing in attack surface management.
−Removed: We expect the acquisition will enrich our Cortex offerings and provide organizations an integrated view of the enterprise to combine external, internal, and threat data.
−Removed: The total purchase consideration for the acquisition of Expanse was $ 797.2 million, which consisted of the following (in millions):
−Removed: Common stock ( 1.1 million shares)
+Added: Talon Cyber Security Ltd.
+Added: On December 28, 2023, we completed our acquisition of Talon Cyber Security Ltd.
+Added: (“Talon”), a privately-held cyber security company.
+Added: We expect the acquisition will support Prisma SASE’s approach to provide secure access to business applications for unmanaged and personal devices with an enterprise browser.
+Added: The total purchase consideration for the acquisition of Talon was $ 458.6 million, which consisted of the following (in millions):
Fair value of replacement awards 19.6
3 unchanged sentences
The remaining fair value was allocated to future services and will be expensed over the remaining service periods as share-based compensation.
−Removed: We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on estimated fair values, as presented in the following table (in millions):
+Added: We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values, as presented in the following table (in millions):
Goodwill $ 236.9
Identified intangible assets 131.4
−Removed: Net liabilities assumed ( 12.4 )
−Removed: Total $ 797.2
−Removed: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Expanse technology into our platforms.
−Removed: The goodwill is not deductible for income tax purposes.
−Removed: The following table presents details of the identified intangible assets acquired (in millions, except years):
−Removed: Fair Value Estimated Useful Life
−Removed: Developed technology $ 123.4 6 years
−Removed: Customer relationships 36.9 10 years
+Added: Cash and restricted cash 53.9
+Added: Net assets acquired 36.4
Total $ 458.6
−Removed: Sinefa Group, Inc.
−Removed: On November 24, 2020, we completed our acquisition of Sinefa Group, Inc.
−Removed: and its wholly owned subsidiaries (“Sinefa”), a privately-held digital experience monitoring company.
−Removed: We expect the acquisition will extend our Prisma Access offering.
−Removed: The total purchase consideration for the acquisition of Sinefa was $ 27.0 million, which consisted of the following (in millions):
−Removed: Fair value of replacement awards 0.1
−Removed: As part of the acquisition, we issued $ 11.5 million of replacement equity awards, of which the portion attributable to services performed prior to the acquisition date was allocated to purchase consideration.
−Removed: The remaining fair value was allocated to future services and will be expensed over the remaining service periods as share-based compensation.
−Removed: We have accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on estimated fair values, as presented in the following table (in millions):
−Removed: Goodwill $ 13.7
−Removed: Identified intangible assets 20.4
−Removed: Net liabilities assumed ( 7.1 )
−Removed: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Sinefa technology into our platforms.
−Removed: The goodwill is deductible for income tax purposes.
−Removed: The following table presents details of the identified intangible assets acquired (in millions, except years):
+Added: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Talon technology into our platforms.
+Added: The goodwill is deductible for U.S.
+Added: income tax purposes.
+Added: The following table presents details of the identified intangible asset acquired (in millions, except years):
Fair Value Estimated Useful Life
Developed technology $ 131.4 5 years
−Removed: Customer relationships 1.8 8 years
−Removed: The Crypsis Group
−Removed: On September 17, 2020, we completed our acquisition of The Crypsis Group (“Crypsis”), an incident response, risk management, and digital forensics consulting firm.
−Removed: We expect the acquisition will expand our capabilities and strengthen our Cortex strategy.
−Removed: The total purchase consideration for the acquisition of Crypsis was $ 227.7 million, which consisted of the following (in millions):
+Added: Cider Security Ltd.
+Added: On December 20, 2022, we completed our acquisition of Cider Security Ltd.
+Added: (“Cider”), a privately-held cloud security company.
+Added: We expect the acquisition will support Prisma Cloud’s platform approach to securing the entire application security lifecycle from code to cloud.
+Added: The total purchase consideration for the acquisition of Cider was $ 198.3 million, which consisted of the following (in millions):
Fair value of replacement awards 0.3
Total $ 198.3
−Removed: As part of the acquisition, we issued $ 27.1 million of replacement awards, of which the portion attributable to services performed prior to the acquisition date was allocated to purchase consideration.
+Added: As part of the acquisition, we issued replacement equity awards, which included 0.2 million shares of our restricted common stock.
+Added: The total fair value of the replacement equity awards was $ 48.6 million, of which the portion attributable to services performed prior to the acquisition date was allocated to purchase consideration.
The remaining fair value was allocated to future services and will be expensed over the remaining service periods as share-based compensation.
2 unchanged sentences
Identified intangible assets 27.8
−Removed: Net assets acquired 15.7
+Added: Net liabilities assumed ( 6.5 )
Total $ 198.3
−Removed: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Crypsis technology into our platforms.
−Removed: The goodwill is deductible for income tax purposes.
−Removed: The following table presents details of the identified intangible assets acquired (in millions, except years):
+Added: Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Cider technology into our platforms.
+Added: The goodwill is deductible for U.S.
+Added: income tax purposes.
+Added: The following table presents the identified intangible asset acquired (in millions, except years):
Fair Value Estimated Useful Life
−Removed: Developed technology $ 6.9 3 years
−Removed: Customer relationships 47.5 7 years
+Added: Developed technology
+Added: $ 27.8 5 years
+Added: Other acquisition
+Added: In April 2023, we completed an acquisition for total purchase consideration of $ 18.9 million in cash.
+Added: We have accounted for this transaction as a business combination and recorded goodwill of $ 14.5 million.
+Added: The goodwill is not deductible for income tax purposes.
+Added: During the year ended July 31, 2022, we completed acquisitions for a combined total purchase consideration of $ 40.1 million, which was primarily cash.
+Added: We have accounted for these transactions as business combinations, and recorded goodwill of $ 37.6 million.
+Added: The goodwill is not deductible for income tax purposes.
Additional Acquisition-Related Information
34 unchanged sentences
Total property and equipment, net $ 361.1 $ 354.5
−Removed: During the year ended July 31, 2022, we purchased 4.6 acres of land adjacent to our headquarters in Santa Clara, California, along with the associated buildings, for $ 39.5 million to accommodate future expansion of our headquarters.
We recognized depreciation expense of $ 85.1 million, $ 95.9 million, and $ 92.8 million related to property and equipment during the years ended July 31, 2024, 2023, and 2022, respectively.
2 unchanged sentences
The 2023 Notes bear interest at a fixed rate of 0.75 % per year, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2019.
−Removed: The 2025 Notes bear interest at a fixed rate of 0.375 % per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020.
−Removed: Each series of the convertible notes is governed by an indenture between us, as the issuer, and U.S.
−Removed: Bank National Association, as Trustee (individually, each an “Indenture,” and together, the “Indentures”).
−Removed: The Notes of each series are unsecured, unsubordinated obligations and the applicable Indenture governing each series of Notes does not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by us or any of our subsidiaries.
The 2023 Notes were converted prior to or settled on the maturity date of July 1, 2023 in accordance with their terms.
+Added: The 2025 Notes bear interest at a fixed rate of 0.375 % per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020.
+Added: The 2025 Notes are governed by an indenture between us, as the issuer, and U.S.
+Added: Bank National Association, as Trustee (the “Indenture”).
+Added: The 2025 Notes are unsecured, unsubordinated obligations and the Indenture governing the 2025 Notes does not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by us or any of our subsidiaries.
The 2025 Notes mature on June 1, 2025.
8 unchanged sentences
(1) The 2023 Notes were converted prior to or settled on the maturity date of July 1, 2023.
−Removed: Holders of the Notes may surrender their Notes for conversion at their option at any time prior to the close of business on the business day immediately preceding their respective convertible dates only under the following circumstances:
−Removed: • during any fiscal quarter commencing after the fiscal quarters ending on October 31, 2018 and October 31, 2020 for the 2023 Notes and the 2025 Notes, respectively (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the applicable conversion price for the respective Notes on each applicable trading day (the “sale price condition”);
−Removed: • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the applicable conversion rate for the respective Notes on each such trading day;
+Added: Holders of the 2025 Notes may surrender their 2025 Notes for conversion at their option at any time prior to the close of business on the business day immediately preceding March 1, 2025 only under the following circumstances:
+Added: • during any fiscal quarter commencing after the fiscal quarter ending on October 31, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the 2025 Notes on each applicable trading day (the “sale price condition”);
+Added: • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the conversion rate for the 2025 Notes on each such trading day;
• upon the occurrence of specified corporate events.
−Removed: On or after the respective convertible date, holders may surrender all or any portion of their Notes for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable maturity date regardless of the foregoing conditions, and such conversions will be settled upon the applicable maturity date.
−Removed: Upon conversion, holders of the Notes of a series will receive cash equal to the aggregate principal amount of the Notes of such series to be converted, and, at our election, cash and/or shares of our common stock for any amounts in excess of the aggregate principal amount of the Notes of such series being converted.
+Added: On or after March 1, 2025, holders may surrender all or any portion of their 2025 Notes for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions, and such conversions will be settled upon the maturity date.
+Added: Upon conversion, holders of the 2025 Notes will receive cash equal to the aggregate principal amount of the 2025 Notes to be converted, and, at our election, cash and/or shares of our common stock for any amounts in excess of the aggregate principal amount of the 2025 Notes being converted.
The conversion price will be subject to adjustment in some events.
−Removed: Holders of the Notes of a series who convert their Notes of such series in connection with certain corporate events that constitute a “make-whole fundamental change” under the applicable Indenture are, under certain circumstances, entitled to an increase in the conversion rate for such series of Notes.
−Removed: Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” under the applicable Indenture, holders of the Notes of such series may require us to repurchase for cash all or a portion of the Notes of such series at a repurchase price equal to 100 % of the principal amount of the Notes of such series plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
+Added: Holders of the 2025 Notes who convert their 2025 Notes in connection with certain corporate events that constitute a “make-whole fundamental change” under the Indenture are, under certain circumstances, entitled to an increase in the conversion rate.
+Added: Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” under the Indenture, holders of the 2025 Notes may require us to repurchase for cash all or a portion of the 2025 Notes at a repurchase price equal to 100 % of the principal amount of the 2025 Notes plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Holders of the 2023 Notes were able to early convert their 2023 Notes in fiscal 2023 up to April 1, 2023 as the sales price condition had been met.
Conversion requests for the 2023 Notes received on or after April 1, 2023 were settled upon maturity of the 2023 Notes.
−Removed: Holders of the 2025 Notes were able to early convert their 2025 Notes in fiscal 2023 as the sales price condition was met.
−Removed: During the year ended July 31, 2023, we repaid in cash $ 1.7 billion in aggregate principal amount of the Notes and issued 11.4 million shares of common stock to the holders of the Notes for the conversion value in excess of the principal amount.
+Added: Holders of the 2025 Notes were able to early convert their 2025 Notes in fiscal 2024 and 2023 as the sales price condition was met.
+Added: During the years ended July 31, 2024 and 2023, holders of the Notes converted $ 1.0 billion and $ 1.7 billion, respectively, in aggregate principal amount of the Notes, which we repaid in cash.
+Added: We also issued 7.0 million and 11.4 million shares of our common stock to the holders of the Notes during the years ended July 31, 2024 and 2023, respectively, for the conversion value in excess of the principal amount.
These shares were fully offset by shares we received from the corresponding exercise of the associated note hedges.
−Removed: The sale price condition for the 2025 Notes was met during the fiscal quarter ended July 31, 2023, and as a result, holders may convert their 2025 Notes during the fiscal quarter ending October 31, 2023.
−Removed: The net carrying amount of the 2025 Notes was classified as a current liability on our consolidated balance sheet as of July 31, 2023.
−Removed: The sale price condition for the Notes was met during the fiscal quarter ended July 31, 2022, and as a result, holders could convert their Notes during the fiscal quarter ended October 31, 2022.
−Removed: The net carrying amount of the Notes was classified as a current liability on our consolidated balance sheet as of July 31, 2022.
+Added: Refer to Note 19.
+Added: Subsequent Events for additional information regarding conversion of the 2025 Notes after July 31, 2024 through the filing date of this Annual Report on Form 10-K.
+Added: The sale price condition for the 2025 Notes was met during the fiscal quarters ended July 31, 2024 and 2023, and as a result, holders have the option to convert their 2025 Notes in the fiscal quarter commencing after July 31, 2024 and 2023, respectively.
+Added: The net carrying amount of the 2025 Notes was classified as a current liability on our consolidated balance sheet as of July 31, 2024 and 2023.
The following table sets forth the net carrying amount of our 2025 Notes (in millions):
July 31, 2024 July 31, 2023
−Removed: 2023 Notes 2025 Notes Total 2023 Notes 2025 Notes Total
Principal $ 965.6 $ 1,999.3
1 unchanged sentence
Net carrying amount $ 963.9 $ 1,991.5
−Removed: The total estimated fair value of the 2025 Notes was $ 5.0 billion at July 31, 2023.
−Removed: The total estimated fair value of the 2023 Notes and 2025 Notes were $ 3.2 billion and $ 3.5 billion at July 31, 2022, respectively.
−Removed: The fair value was determined based on the closing trading price per $100 of the applicable series of the Notes as of the last day of trading for the period.
+Added: The total estimated fair value of the 2025 Notes was $ 3.2 billion and $ 5.0 billion as of July 31, 2024 and 2023, respectively.
+Added: The fair value was determined based on the closing trading price per $100 of the 2025 Notes as of the last day of trading for the period.
We consider the fair value of the 2025 Notes at July 31, 2024 and 2023 to be a Level 2 measurement.
4 unchanged sentences
Contractual interest expense $ — $ 4.8 $ 4.8 $ 11.6 $ 7.5 $ 19.1 $ 12.7 $ 7.5 $ 20.2
−Removed: Amortization of debt discount (1)
−Removed: — — — — — — 63.5 74.3 137.8
Amortization of debt issuance costs — 3.5 3.5 2.6 4.1 6.7 2.8 4.4 7.2
1 unchanged sentence
Effective interest rate of the liability component — % 0.6 % 0.9 % 0.6 % 0.9 % 0.6 %
−Removed: (1) Upon adoption of the new debt guidance on August 1, 2021, the conversion option is no longer separately accounted for as debt discount.
−Removed: Our convertible senior notes are accounted for entirely as a liability.
−Removed: To minimize the impact of potential economic dilution upon conversion of our convertible senior notes, we entered into separate convertible note hedge transactions (the “2023 Note Hedges,” with respect to the 2023 Notes, the “2025 Note Hedges,” with respect to the 2025 Notes, and the 2023 Notes Hedges together with 2025 Note Hedges, the “Note Hedges”) with respect to our common stock concurrent with the issuance of each series of the Notes.
+Added: To minimize the impact of potential economic dilution upon conversion of our convertible senior notes, we entered into separate convertible note hedge transactions (the “2023 Note Hedges,” with respect to the 2023 Notes, the “2025 Note Hedges,” with respect to the 2025 Notes, and the 2023 Note Hedges together with 2025 Note Hedges, the “Note Hedges”) with respect to our common stock concurrent with the issuance of each series of the Notes.
The following table presents details of our Note Hedges (in millions):
9 unchanged sentences
The aggregate amounts paid for the Note Hedges are included in additional paid-in capital on our consolidated balance sheets.
−Removed: As a result of the conversions of the 2023 Notes settled during the year ended July 31, 2023, we exercised the corresponding portion of our 2023 Note Hedges and received 11.4 million shares of our common stock during the period.
−Removed: As of July 31, 2023, none of our 2023 Note Hedges were outstanding.
+Added: As a result of the conversions of the Notes settled during the years ended July 31, 2024 and 2023, we exercised the corresponding portion of our Note Hedges and received 7.0 million and 11.4 million shares of our common stock during the respective periods.
Separately, but concurrently with the issuance of each series of our convertible senior notes, we entered into transactions whereby we sold warrants (the “2023 Warrants,” with respect to the 2023 Notes, the “2025 Warrants,” with respect to the 2025 Notes, and the 2023 Warrants together with the 2025 Warrants, the “Warrants”) to acquire shares of our common stock, subject to anti-dilution adjustments.
8 unchanged sentences
The aggregate proceeds received from the sale of the Warrants are included in additional paid-in capital on our consolidated balance sheets.
+Added: During the year ended July 31, 2024, we net settled all of the 2023 Warrants with 9.0 million shares of our common stock with a fair value of $ 2.4 billion.
+Added: The number of net shares issued was determined based on the number of 2023 Warrants exercised multiplied by the difference between the strike price of the 2023 Warrants and their daily volume-weighted-average stock price.
Revolving Credit Facility
3 unchanged sentences
The 2023 Credit Facility matures on April 13, 2028.
−Removed: The borrowings under the 2023 Credit Facility bear interest, at our option, at a base rate plus a spread of 0.000 % to 0.375 %, or an adjusted term Secured Overnight Financing Rate (“SOFR”) plus a spread of 1.000 % to 1.375 %, in each case with such spread being determined based on our leverage ratio.
+Added: The borrowings under the 2023 Credit Facility bear interest, at our option, at a base rate plus a spread of 0.000 % to 0.375 %, or an adjusted term Secured Overnight Financing Rate plus a spread of 1.000 % to 1.375 %, in each case with such spread being determined based on our leverage ratio.
We are obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.090 % to 0.150 %, depending on our leverage ratio.
1 unchanged sentence
As of July 31, 2024, there were no amounts outstanding and we were in compliance with all covenants under the 2023 Credit Agreement.
−Removed: We have entered into various non-cancelable operating leases primarily for our facilities with original lease periods expiring through the year ending July 31, 2033, with the most significant leases relating to our corporate headquarters in Santa Clara.
−Removed: In May 2015 and October 2015, we entered into a total of three lease agreements for approximately 941,000 square feet of corporate office space in Santa Clara, California, which serves as our current corporate headquarters.
−Removed: The leases contain rent holiday periods, scheduled rent increases, lease incentives, and renewal options which allow the lease terms to be extended beyond their expiration dates of July 2028 through July 2046.
−Removed: Rental payments under the three lease agreements are approximately $ 412.0 million over the lease term.
+Added: We have entered into various non-cancelable operating leases, primarily for our offices and data centers, with lease terms expiring through the year ending July 31, 2036.
+Added: Some of our leases contain rent holiday periods, scheduled rent increases, lease incentives, early termination rights, and/or renewal options.
During the years ended July 31, 2024, 2023, and 2022, our net cost for operating leases was $ 104.7 million, $ 91.3 million, and $ 89.7 million, respectively, primarily consisting of operating lease costs of $ 75.6 million, $ 64.2 million, and $ 67.6 million, respectively.
18 unchanged sentences
As of July 31, 2024, we had additional non-cancelable operating leases for office space that had been signed but had not yet commenced with total future minimum lease payments of $ 32.7 million.
−Removed: These leases are expected to commence on or after fiscal 2024, with lease terms ranging from two to twelve years .
+Added: These leases are expected to commence on or after fiscal 2025, with lease terms ranging from four to eight years .
Commitments and Contingencies
Purchase Commitments
−Removed: Manufacturing Purchase Commitments
−Removed: In order to reduce manufacturing lead times and plan for adequate supply, we enter into agreements with manufacturing partners and component suppliers to procure inventory based on our demand forecasts.
−Removed: The following table presents details of the aggregate future minimum or fixed purchase commitments under these arrangements excluding obligations under contracts that we can cancel as of July 31, 2023 (in millions):
−Removed: Fiscal years ending July 31,
−Removed: Total 2024 2025 2026 2027 2028 2029 and Thereafter
−Removed: Manufacturing purchase commitments
−Removed: $ 157.4 $ 82.4 $ 35.0 $ 40.0 $ — $ — $ —
−Removed: Other Purchase Commitments
−Removed: We have entered into various non-cancelable agreements with certain service providers, under which we are committed to minimum or fixed purchases.
+Added: We have entered into various non-cancelable agreements with cloud service providers, under which we are committed to minimum or fixed purchases of certain cloud services.
+Added: In addition, in order to reduce manufacturing lead times and plan for adequate supply, we have entered into agreements with manufacturing partners and component suppliers to procure inventory based on our demand forecasts.
The following table presents details of the aggregate future non-cancelable purchase commitments under these agreements as of July 31, 2024 (in millions):
1 unchanged sentence
Total 2025 2026 2027 2028 2029 2030 and Thereafter
−Removed: Other purchase commitments
$ 4,275.7 $ 98.9 $ 580.2 $ 518.1 $ 599.6 $ 686.1 $ 1,792.8
−Removed: Additionally, we have a $ 155.6 million minimum purchase commitment with a service provider through September 2027 with no specified annual commitments.
+Added: Manufacturing
+Added: 266.0 226.0 40.0 — — — —
+Added: 135.2 46.7 42.5 32.3 6.8 3.4 3.5
+Added: Total purchase commitments
+Added: $ 4,676.9 $ 371.6 $ 662.7 $ 550.4 $ 606.4 $ 689.5 $ 1,796.3
+Added: Additionally, we have a $ 141.2 million minimum purchase commitment with a cloud service provider through September 2027 with no specified annual commitments.
Mutual Covenant Not to Sue and Release Agreement
1 unchanged sentence
As the primary benefit of the arrangement was attributable to future use, the amount was recorded in other assets on our consolidated balance sheets and is amortized to cost of product revenue on our consolidated statements of operations over the estimated period of benefit of seven years .
+Added: In October 2023, we established a multi-currency notional cash pool for a certain number of our entities with a third-party bank.
+Added: As part of the notional cash pool agreement, the bank extends overdraft credit to our participating entities as needed, provided that the overall notionally pooled balance of all accounts in the pool at the end of each day is positive.
+Added: In the unlikely event of a default, any overdraft balances incurred would be guaranteed by our collective entities participating in the pool.
We are subject to legal proceedings, claims, tax matters, and litigation arising in the ordinary course of business, including, for instance, intellectual property and patent litigation.
We accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss.
−Removed: As of July 31, 2023, we have not recorded any significant accruals for loss contingencies associated with such matters.
Legal matters could include speculative, substantial or indeterminate monetary amounts.
1 unchanged sentence
The outcomes of outstanding legal matters are inherently unpredictable, and could, either individually or in aggregate, have a material adverse effect on us and our results of operations.
−Removed: To the extent there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred, we will either disclose the estimated additional loss or state that such an estimate cannot be made.
+Added: To the extent there is a reasonable possibility that a loss exceeding any amounts already recognized may be incurred, we will either disclose the estimated additional loss or state that such an estimate cannot be made.
The following matters arose in the ordinary course of business.
4 unchanged sentences
We successfully challenged certain of these patents, which were found unpatentable by the U.S.
−Removed: Patent and Trademark Office.
−Removed: The complaint requests injunctive relief, monetary damages, and attorneys fees.
+Added: Patent and Trademark Office (“PTO”).
+Added: The case went to jury trial on January 22, 2024, on four patents.
+Added: On January 31, 2024, the jury returned a verdict of non-willful infringement with a lump sum amount of $ 151.5 million, plus statutory interest.
+Added: We have filed motions to overturn the verdict and seek a new trial, which are pending before the court.
+Added: Three patents are still pending review in the PTO and are currently subject to a stay at the trial court.
In addition, Centripetal filed infringement contentions on certain of their patents in the European Patent Office in Germany, to which we filed invalidity challenges.
Those matters are still pending.
−Removed: The court has set a trial date of January 22, 2024 on the remaining patents.
−Removed: We are unable, at this time, to reasonably estimate a possible loss or potential range of loss, if any.
+Added: As of July 31, 2024, we accrued $ 184.4 million for the verdict amount and estimated interest.
+Added: The accrual is recorded in other long-term liabilities on our consolidated balance sheets with the corresponding charge included in general and administrative expense on our consolidated statements of operations for the year ended July 31, 2024.
Palo Alto Networks
2 unchanged sentences
The complaint requests injunctive relief, monetary damages, and attorneys fees.
−Removed: The court has set a trial date of April 8, 2024.
+Added: A trial date is set for June 9, 2025.
We are unable, at this time, to reasonably estimate a possible loss or potential range of loss, if any.
Palo Alto Networks
−Removed: On March 22, 2022, we filed a declaratory judgment action in the United States District Court for the Southern District of New York (“S.D.N.Y”) seeking a ruling that we are not infringing various Taasera patents.
−Removed: Taasera challenged jurisdiction in S.D.N.Y, which issue is currently on appeal with the Federal Circuit.
−Removed: Pursuant to an order of the Judicial Panel on Multidistrict Litigation, this matter has been consolidated in the United States District Court for the Eastern District of Texas with several other patent infringement matters brought by Taasera.
−Removed: The court has set April 1, 2024 as the date for the start of consecutive trials of these consolidated matters.
−Removed: The complaint requests injunctive relief, monetary damages, and attorneys fees.
−Removed: We are unable, at this time, to reasonably estimate a possible loss or potential range of loss, if any.
+Added: On March 22, 2022, we filed a declaratory judgment action in the United States District Court for the Southern District of New York seeking a ruling that we are not infringing various Taasera patents.
+Added: The parties have resolved all pending matters between them as of December 2023.
+Added: The amounts paid by us to resolve these matters were not material.
+Added: Lionra Technologies v.
+Added: Palo Alto Networks
+Added: On August 29, 2022, Lionra Technologies filed a patent infringement lawsuit against us in the United States District Court for the Eastern District of Texas.
+Added: The parties have resolved all pending matters between them as of July 2024.
+Added: The amounts paid by us to resolve these matters were not material.
Indemnification
−Removed: Under the indemnification provisions of our standard sales related contracts, we agree to defend our end-customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments entered on such claims.
+Added: Under the indemnification provisions of our standard sales related contracts, we agree to defend our end-customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments or approved settlements attributable to such claims.
Our exposure under these indemnification provisions is generally limited to payments made to us for the alleged infringing products over the preceding twelve months under the agreement.
5 unchanged sentences
In February 2019, our board of directors authorized a $ 1.0 billion share repurchase program, which is funded from available working capital.
−Removed: In December 2020, August 2021, and August 2022, our board of directors authorized additional $ 700.0 million, $ 676.1 million, and $ 915.0 million increases to this share repurchase program, respectively, bringing the total authorization under this share repurchase program to $ 3.3 billion (our “current authorization”).
+Added: In December 2020, August 2021, August 2022, and November 2023, our board of directors authorized additional $ 700.0 million, $ 676.1 million, $ 915.0 million and $ 316.7 million increases to this share repurchase program, respectively, bringing the total authorization under this share repurchase program to $ 3.6 billion (our “current authorization”).
The expiration date of our current authorization was extended to December 31, 2024, and our repurchase program may be suspended or discontinued at any time.
Repurchases may be made at management’s discretion from time to time on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing.
+Added: Refer to Note 19.
+Added: Subsequent Events for additional information regarding the increase to our share repurchase program in August 2024.
The following table summarizes the share repurchase activity under our share repurchase program (in millions, except per share amounts):
7 unchanged sentences
(1) Includes transaction costs
+Added: During the year ended July 31, 2023, we paid $ 22.7 million related to share repurchases of our common stock that were not settled as of July 31, 2022.
As of July 31, 2024, $ 500.0 million remained available for future share repurchases under our current repurchase authorization.
13 unchanged sentences
The market conditions are satisfied when the price of our common stock is equal to or exceeds stock price targets of $ 233.33 , $ 266.67 , $ 300.00 , and $ 333.33 based on the average closing price for 30 consecutive trading days during the three - or four -year period following the date of grant.
−Removed: To the extent the market conditions have been met, one-fourth of the awards will vest on each anniversary date of the grant date, subject to continued service.
−Removed: During the year ended July 31, 2023, the first stock price target for these PSU awards was met, and the related shares will vest when the underlying service conditions are satisfied.
+Added: Once a market condition is met, its corresponding one-fourth of the awards vest on each anniversary date of the grant date, subject to continued service.
+Added: As of July 31, 2024, all stock price targets for these PSU awards have been met, and the related shares will vest when the underlying service conditions are satisfied.
During the year ended July 31, 2023, we granted 0.8 million shares of PSUs, which contain service and market conditions.
The service conditions are satisfied after a period of five years .
−Removed: The market condition is measured based on our TSR relative to the TSR of the companies listed in the Standard & Poor’s 500 index.
+Added: The market condition is measured based on our total shareholder return (“TSR”) relative to the TSR of the companies listed in the Standard & Poor’s 500 index.
During the years ended July 31, 2024 and 2023, we granted 2.1 million and 1.6 million shares of PSUs, respectively, which contain service, performance and market conditions.
1 unchanged sentence
The performance conditions are based on revenue growth or billing growth.
−Removed: The market condition is measured based on our total shareholder return (“TSR”) relative to the TSR of the companies listed in the Standard & Poor’s 500 index.
−Removed: As of July 31, 2023, we have approved 2.3 million shares of PSUs, which will be granted upon the performance condition being established during the next two years .
+Added: The market condition is measured based on our TSR relative to the TSR of the companies listed in the Standard & Poor’s 500 index.
+Added: As of July 31, 2024, we have approved an additional 2.7 million shares of PSUs, which will be granted upon the performance condition being established during the next two years .
We have also granted PSOs with both service and market conditions.
The market condition for PSOs granted in the fiscal years 2018 and 2019 requires the price of our common stock to equal or exceed $ 99.25 , $ 132.33 , $ 165.42 , and $ 198.50 based on the average closing price for 30 consecutive trading days during the four -, five -, six -, and seven-and-a-half-year periods following the date of grant in fiscal year 2018 and 2019, respectively.
−Removed: The market condition for PSOs granted in the fiscal year 2021 requires the price of our common stock to equal or exceed $ 132.33 , $ 165.42 , $ 198.50 and $ 233.33 based on the average closing price for 30 consecutive trading days during the three -, four -, five -, and six-and-a-half-year periods following the date of grant.
−Removed: All of the PSOs granted in the fiscal year 2021 were forfeited in the same fiscal year and are no longer outstanding.
−Removed: To the extent that the market conditions are met, one-fourth of the PSOs vest on each anniversary date of the grant date for such PSOs, subject to continued service.
+Added: Once a market condition is met, its corresponding one-fourth of the PSOs vest on each anniversary date of the grant date, subject to continued service.
The maximum contractual term of our outstanding PSOs is seven and a half years from the date of grant, depending on vesting period.
5 unchanged sentences
2012 Employee Stock Purchase Plan
−Removed: Our 2012 Employee Stock Purchase Plan was adopted by our board of directors and approved by the stockholders on June 5, 2012, and was effective upon completion of our initial public offering (“IPO”).
+Added: Our 2012 Employee Stock Purchase Plan was adopted by our board of directors and approved by the stockholders on June 5, 2012, and was effective upon completion of our initial public offering.
On August 29, 2017, we amended and restated our 2012 Employee Stock Purchase Plan (our “2012 ESPP”) to extend the length of our offering periods from 6 to 24 months.
20 unchanged sentences
Balance—July 31, 2021 0.2 $ 8.74 0.8 $ 27.4 8.3 $ 64.71 4.2 $ 566.8
−Removed: Granted — $ — 0.5 $ 101.43
Exercised ( 0.2 ) 6.24 — —
2 unchanged sentences
Exercised 0.0 18.45 ( 1.6 ) 63.39
−Removed: Forfeited — $ — ( 0.3 ) $ 61.41
Balance—July 31, 2023 — $ — 0.0 $ — 6.4 $ 65.20 2.2 $ 1,184.6
5 unchanged sentences
The following table summarizes the RSU and PSU activity under our stock plans during the years ended July 31, 2024, 2023, and 2022 (in millions, except per share amounts):
−Removed: RSUs Outstanding PSUs Outstanding
+Added: Unvested RSUs
+Added: Unvested PSUs
Number of Shares Weighted-Average Grant-Date Fair Value Per Share Aggregate Intrinsic Value Number of Shares Weighted-Average Grant-Date Fair Value Per Share Aggregate Intrinsic Value
Balance—July 31, 2021 20.7 $ 85.85 $ 2,760.2 3.8 $ 97.64 $ 498.4
−Removed: Granted (1)(2)
5.9 164.85 0.8 117.05
11 unchanged sentences
(1) For PSUs, shares granted represent the aggregate maximum number of shares that may be earned and issued with respect to these awards over their full terms.
−Removed: (2) Includes 1.2 million RSUs assumed in connection with the acquisitions of Crypsis, Sinefa, Expanse and Bridgecrew, with weighted-average grant-date fair values of $ 80.48 , $ 99.06 , $ 105.82 and $ 118.22 , respectively, for the year ended July 31, 2021.
(2) Includes time-based vesting for PSUs.
−Removed: The aggregate fair value, as of the respective vesting dates, of RSUs vested during the years ended July 31, 2023, 2022, and 2021 was $ 1.3 billion, $ 1.6 billion, and $ 986.4 million, respectively.
+Added: The aggregate fair value, as of the respective vesting dates, of RSUs vested during the years ended July 31, 2024, 2023, and 2022 was $ 1.6 billion, $ 1.3 billion, and $ 1.6 billion, respectively.
The aggregate fair value, as of the respective vesting dates, of PSUs vested during the years ended July 31, 2024, 2023, and 2022 was $ 377.7 million, $ 218.9 million, and $ 184.0 million, respectively.
12 unchanged sentences
The fair value of the PSUs subject to market conditions is estimated on the grant date using a Monte Carlo simulation model.
−Removed: No such PSUs were granted during the year ended July 31, 2021.
The following table summarizes the assumptions used and the resulting grant-date fair value of our PSUs subject to market conditions granted during the years ended July 31, 2024, 2023, and 2022:
Year Ended July 31,
+Added: 2024 2023 2022
Volatility 40.8 % - 43.4 %
38.3 % - 44.8 %
+Added: 36.0 % - 41.1 %
Expected term (in years) 0.9 - 2.9
2 unchanged sentences
3.2 % - 4.1 %
+Added: 0.2 % - 2.0 %
Grant-date fair value per share $ 346.92 - $ 621.21
$ 91.77 - $ 280.41
+Added: $ 137.16 - $ 260.71
The expected volatility is based on the historical volatility of our common stock.
3 unchanged sentences
Treasury zero-coupon issues with maturities that approximate the expected term.
−Removed: The fair value of PSOs is estimated on the grant date using a Monte Carlo simulation model, which predicts settlement of the PSOs midway between the vesting term and the contractual term.
+Added: The fair value of PSOs was estimated on the grant date using a Monte Carlo simulation model, which predicts settlement of the PSOs midway between the vesting term and the contractual term.
No PSOs were granted during the years ended July 31, 2024, 2023, and 2022.
−Removed: The following table summarizes the assumptions used and the resulting grant-date fair values of our PSOs granted during the year ended July 31, 2021:
−Removed: Year Ended July 31, 2021
−Removed: Volatility 35.9 %
−Removed: Dividend yield — %
−Removed: Risk-free interest rate 0.6 %
−Removed: Weighted-average grant-date fair value per share $ 27.37
−Removed: The expected volatility is based on a combination of implied volatility from traded options on our common stock and the historical volatility of our common stock.
−Removed: The dividend yield assumption is based on our current expectations about our anticipated dividend policy.
−Removed: The risk-free interest rate is based on the implied yield available on U.S.
−Removed: Treasury zero-coupon issues with terms equal to the contractual terms of each tranche.
The fair value of shares issued under our 2012 ESPP are estimated on the grant date using the Black-Scholes option pricing model.
9 unchanged sentences
3.3 % - 5.2 %
+Added: 0.1 % - 1.4 %
Grant-date fair value per share $ 65.61 - $ 133.32
24 unchanged sentences
Total $ 988.3 $ 566.3 $ ( 207.2 )
−Removed: The following table summarizes our provision for income taxes (in millions):
+Added: The following table summarizes our provision for (benefit from) income taxes (in millions):
Year Ended July 31,
7 unchanged sentences
Total $ ( 1,589.3 ) $ 126.6 $ 59.8
+Added: For the year ended July 31, 2024, our benefit from income taxes was $ 1.6 billion, a net change of $ 1.7 billion compared to a provision for income taxes of $ 126.6 million for the year ended July 31, 2023, primarily due to the release of our valuation allowance on U.S.
+Added: federal, U.S.
+Added: states other than California, and United Kingdom (“U.K.”) deferred tax assets in fiscal 2024, partially offset by the deferred tax provision in our U.S.
+Added: federal tax provision to recognize the indirect effect on basis differences relating to our global intangible low-taxed income in connection with the release of our valuation allowance in the U.K.
For the year ended July 31, 2023, our provision for income taxes increased compared to the year ended July 31, 2022, primarily due to our profitability in fiscal 2023 and an increase in U.S.
taxes driven by capitalization of research and development expenditure with no offsetting deferred benefit due to our valuation allowance.
−Removed: For the year ended July 31, 2022, our provision for income taxes increased compared to the year ended July 31, 2021, primarily due to foreign income and withholding taxes.
−Removed: The following table presents the items accounting for the difference between income taxes computed at the federal statutory income tax rate and our provision for income taxes:
+Added: The following table presents the items accounting for the difference between income taxes computed at the federal statutory income tax rate and our provision for (benefit from) income taxes:
Year Ended July 31,
2 unchanged sentences
State taxes, net of federal tax benefit 3.1 2.8 2.7
−Removed: Effects of non-U.S.
−Removed: operations 9.7 ( 16.5 ) ( 3.1 )
+Added: 9.5 9.7 ( 16.5 )
Change in valuation allowance ( 341.9 ) 15.5 ( 158.7 )
+Added: effect of foreign deferred tax assets
Share-based compensation ( 16.9 ) ( 12.6 ) 83.6
13 unchanged sentences
Fixed assets and intangible assets 1,631.7 1,698.3
−Removed: Interest carryforward — 55.8
Gross deferred tax assets 4,341.6 3,899.7
2 unchanged sentences
Deferred tax liabilities:
+Added: effect of foreign deferred tax assets
+Added: ( 1,728.5 ) —
Operating lease right-of-use assets ( 115.8 ) ( 73.5 )
3 unchanged sentences
Net deferred tax assets (liabilities) $ 2,011.3 $ ( 5.4 )
−Removed: A valuation allowance is provided when it is more likely than not that the deferred tax asset will not be realized.
−Removed: We regularly evaluate the need for a valuation allowance.
−Removed: We evaluate and weigh all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies.
−Removed: The assessment requires significant judgment and is performed in each of the applicable jurisdictions.
−Removed: Due to recent profitability, a reversal of our valuation allowance in certain jurisdictions in the foreseeable future is reasonably possible.
−Removed: As of July 31, 2023, we have provided a valuation allowance for our federal, state, United Kingdom, and certain other foreign deferred tax assets that we believe will, more likely than not, be unrealizable.
−Removed: The net valuation allowance increased by $ 172.6 million from the year ended July 31, 2022 to the year ended July 31, 2023, primarily due to capitalization of research and development expenditures and deferred revenue, partially offset by net operating losses and intangible assets.
+Added: We regularly assess the need for a valuation allowance on our deferred tax assets.
+Added: In making this assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized.
+Added: The assessment requires significant judgment and is performed for each of the applicable jurisdictions.
+Added: Based on our analysis of all positive and negative evidence during the year ended July 31, 2024, we concluded it is more likely than not that our U.S.
+Added: federal, U.S.
+Added: states other than California, and U.K.
+Added: deferred tax assets will be realizable based on our recent profitability and continued forecasted income.
+Added: In making these judgments, we considered our recent and expected ongoing profitability, which supports our conclusion of the realization of the deferred tax assets.
+Added: We continue to maintain a valuation allowance for our California deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criterion.
+Added: We expect future research and development tax credit generation in California to exceed our ability to use the existing tax credits.
+Added: As a result of the valuation allowance release, during the year ended July 31, 2024, we recognized a deferred tax benefit of $ 3.4 billion for the U.S.
+Added: federal, U.S.
+Added: states other than California, and U.K.
+Added: deferred tax assets.
+Added: federal and state deferred tax assets largely consist of capitalized research expenditures and accelerated recognition of deferred revenue for tax purposes.
+Added: tax carryforwards (including net operating losses and tax credits) are expected to be fully utilized to the extent allowable by law.
+Added: deferred tax assets largely consist of basis differences in intangible assets and related net operating losses expected to be utilized in the future.
+Added: In addition, during the year ended July 31, 2024, we recognized a deferred tax expense of $ 1.7 billion for the U.S.
+Added: federal indirect tax effect of foreign deferred taxes consistent with our policy to record deferred taxes for basis differences relating to our global intangible low-taxed income.
+Added: Accordingly, during the year ended July 31, 2024, we recognized a net tax benefit of $ 1.7 billion relating to our valuation allowance release.
+Added: We will continue to monitor the need for a valuation allowance on our deferred tax assets.
As of July 31, 2024, we had federal, state, and foreign net operating loss carryforwards of approximately $ 46.8 million, $ 112.8 million, and $ 2.3 billion, respectively, as reported on our tax returns, available to reduce future taxable income, if any.
17 unchanged sentences
We recognize both interest and penalties associated with uncertain tax positions as a component of income tax expense.
−Removed: During the year ended July 31, 2023, we recognized a net income tax benefit related to interest and penalties of $ 4.8 million.
−Removed: During the years ended July 31, 2022 and 2021, we recognized income tax expense related to interest and penalties of $ 5.2 million and $ 3.5 million, respectively.
+Added: During the years ended July 31, 2024, 2023, and 2022, we recognized an income tax expense of $ 5.8 million, a net income tax benefit of $ 4.8 million, and an income tax expense of $ 5.2 million related to interest and penalties, respectively.
We had accrued interest and penalties on our consolidated balance sheets related to unrecognized tax benefits of $ 10.9 million and $ 5.1 million as of July 31, 2024 and 2023, respectively.
8 unchanged sentences
Unrecognized tax benefits at the end of the period $ 454.4 $ 360.0 $ 414.0
+Added: During the year ended July 31, 2024, increases in uncertain tax positions were primarily due to positions relating to our credits and incentives and intercompany transactions.
During the year ended July 31, 2023, our reductions in uncertain tax positions primarily related to settlements with non-U.S.
3 unchanged sentences
Our additions for tax positions taken in the years ended July 31, 2024, 2023 and 2022 were primarily attributable to uncertain tax positions related to tax credits.
+Added: Our additions for tax positions taken in the year ended July 31, 2024 were further driven by intercompany transactions.
As of July 31, 2024, we had no unremitted earnings when evaluating our outside basis difference relating to our U.S.
5 unchanged sentences
Diluted net income (loss) per share is computed by dividing net income (loss) by diluted weighted-average shares outstanding during the period giving effect to all potentially dilutive securities to the extent they are dilutive.
−Removed: Potentially dilutive securities include shares issuable upon conversion of our convertible senior notes using the if-converted method, warrants related to the issuance of convertible senior notes, and equity awards under our employee equity incentive plans using the treasury stock method.
+Added: We compute the dilutive effect of shares issuable upon conversion of our convertible senior notes using the if-converted method, and the dilutive effect of warrants related to the issuance of convertible senior notes and equity awards under our employee equity incentive plans using the treasury stock method.
The following table presents the computation of basic and diluted net income (loss) per share of common stock (in millions, except per share data):
10 unchanged sentences
Net income (loss) per share, diluted $ 7.28 $ 1.28 $ ( 0.90 )
−Removed: The following securities were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented as their effect would have been antidilutive (in millions):
+Added: The following securities were excluded from the computation of diluted net income (loss) per share of common stock as their effect would have been antidilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the applicable period (in millions):
Year Ended July 31,
17 unchanged sentences
Accordingly, we are considered to be in a single reportable segment and operating unit structure.
−Removed: The following table presents our long-lived assets, which consist of property and equipment, net and operating lease right-of-use assets, by geographic region (in millions):
+Added: The following table presents our long-lived assets, which consist of property and equipment, net and operating lease right-of-use assets, by geographic area (in millions):
Year Ended July 31,
6 unchanged sentences
Revenue for revenue by geographic theater and revenue for groups of similar products and services for the years ended July 31, 2024, 2023, and 2022.
+Added: Subsequent Events
+Added: On May 15, 2024, we entered into a definitive agreement with International Business Machines Corporation to acquire certain QRadar assets, including intellectual property, customer relationships, and customer contracts.
+Added: We agreed to pay $ 500.0 million in cash upon closing, and to make additional post-closing payments contingent upon the migration of QRadar on-premise customers to Cortex XSIAM through December 31, 2027.
+Added: We expect the acquisition will help accelerate the growth of our Cortex XSIAM business.
+Added: On August 31, 2024, we completed this acquisition, which will be accounted for as a business combination in the first quarter of fiscal 2025.
+Added: We are currently in the process of determining the initial purchase accounting for this transaction.
+Added: 2025 Notes Conversion
+Added: Subsequent to July 31, 2024, $ 285.8 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 October 31, 2024.
+Added: Share Repurchase
+Added: On August 15, 2024, our board of directors authorized a $ 500.0 million increase to our share repurchase program, bringing the total remaining authorization for future share repurchases to $ 1.0 billion.
+Added: The expiration date of the repurchase authorization was extended to December 31, 2025, and our repurchase program may be suspended or discontinued at any time without prior notice.
+Added: Repurchases may be made at management’s discretion from time to time on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
1 unchanged sentence
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.