What changed in this filing

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Item 1. Financial Statements

2025-11-20 compared with 2025-05-21 · 145 added, 321 removed, 453 unchanged (51% of the section changed)

3 unchanged sentences

(in millions, except per share data)

April 30, 2025 July 31, 2024

October 31, 2025 July 31, 2025

Current assets:

1 unchanged sentence

Short-term investments 1,144 635

Accounts receivable, net of allowance for credit losses of $ 10.6 and $ 7.5 as of April 30, 2025 and July 31, 2024, respectively

1,950.0 2,618.6

Accounts receivable, net of allowance for credit losses of $ 14 and $ 10 as of October 31, 2025 and July 31, 2025, respectively

Short-term financing receivables, net 737 715

15 unchanged sentences

Accounts payable

$ 234.8 $ 116.3

Accrued compensation 398 608

1 unchanged sentence

Deferred revenue 6,132 6,302

Convertible senior notes, net 383.2 963.9

Total current liabilities

7,705.6 7,682.7

Long-term deferred revenue 6,098 6,450

8 unchanged sentences

100 shares authorized;

none issued and outstanding as of April 30, 2025 and July 31, 2024

none issued and outstanding as of October 31, 2025 and July 31, 2025

Common stock and additional paid-in capital;

1 unchanged sentence

2,000 shares authorized;

665.9 and 650.2 shares issued and outstanding as of April 30, 2025 and July 31, 2024, respectively

4,952.2 3,821.1

Accumulated other comprehensive income (loss)

692 and 668 shares issued and outstanding as of October 31, 2025 and July 31, 2025, respectively

Accumulated other comprehensive income

Retained earnings

2,230.3 1,350.2

Total stockholders’ equity 8,665 7,824

4 unchanged sentences

(Unaudited, in millions, except per share data)

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

Product $ 434 $ 354

12 unchanged sentences

Operating income

218.8 176.7 745.7 445.5

Interest expense — ( 1 )

1 unchanged sentence

Income before income taxes

310.5 251.2 1,003.9 669.3

Provision for (benefit from) income taxes 48.4 ( 27.6 ) 123.8 ( 1,550.6 )

$ 262.1 $ 278.8 $ 880.1 $ 2,219.9

Provision for income taxes 78 17

Net income per share, basic

3 unchanged sentences

Weighted-average shares used to compute net income per share, basic

665.1 645.8 659.3 635.0

Weighted-average shares used to compute net income per share, diluted

707.4 709.3 708.6 708.0

See notes to condensed consolidated financial statements .

2 unchanged sentences

(Unaudited, in millions)

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

$ 262.1 $ 278.8 $ 880.1 $ 2,219.9

Three Months Ended October 31,

Other comprehensive income, net of tax:

3 unchanged sentences

Net realized (gains) losses reclassified into earnings

( 0.1 ) 5.5 5.4 13.6

Net change on cash flow hedges ( 6 ) 1

Other comprehensive income (loss)

61.9 ( 48.9 ) 49.6 ( 12.2 )

Comprehensive income $ 353 $ 349

3 unchanged sentences

(Unaudited, in millions)

Three Months Ended April 30, 2025

Three Months Ended October 31, 2025

Common Stock and Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income

Retained Earnings

1 unchanged sentence

Shares Amount

Balance as of January 31, 2025 660.4 $ 4,421.0 $ ( 13.9 ) $ 1,968.2 $ 6,375.3

Balance as of July 31, 2025 668 $ 5,292 $ 48 $ 2,484 $ 7,824

Net income — — — 334 334

Other comprehensive income

— — 61.9 — 61.9

Issuance of common stock in connection with employee equity incentive plans 4 129 — — 129

1 unchanged sentence

Share-based compensation for equity-based awards — 360 — — 360

Settlement of convertible notes 2.2 0.1 — — 0.1

Settlement of note hedges

( 2.2 ) — — — —

Balance as of April 30, 2025 665.9 $ 4,952.2 $ 48.0 $ 2,230.3 $ 7,230.5

Three Months Ended April 30, 2024

Settlement of warrants 20 — — — —

Balance as of October 31, 2025 692 $ 5,780 $ 67 $ 2,818 $ 8,665

Three Months Ended October 31, 2024

Common Stock and Additional Paid-In Capital

3 unchanged sentences

Shares Amount

Balance as of January 31, 2024 645.4 $ 3,650.0 $ ( 6.5 ) $ 713.7 $ 4,357.2

— — — 278.8 278.8

Other comprehensive loss

— — ( 48.9 ) — ( 48.9 )

Issuance of common stock in connection with employee equity incentive plans 4.7 115.8 — — 115.8

Taxes paid related to net share settlement of equity awards — ( 3.4 ) — — ( 3.4 )

Share-based compensation for equity-based awards — 270.0 — — 270.0

Repurchase and retirement of common stock ( 3.4 ) ( 500.0 ) — — ( 500.0 )

Settlement of convertible notes 9.1 ( 1.7 ) — — ( 1.7 )

Settlement of note hedges

( 9.1 ) — — — —

Balance as of April 30, 2024 646.7 $ 3,530.7 $ ( 55.4 ) $ 992.5 $ 4,467.8

Nine Months Ended April 30, 2025

Common Stock and Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Total Stockholders’ Equity

Shares Amount

Balance as of July 31, 2024 650 $ 3,821 $ ( 2 ) $ 1,350 $ 5,169

Net income — — — 880.1 880.1

Other comprehensive income

— — — 351 351

Issuance of common stock in connection with employee equity incentive plans 15.7 360.4 — — 360.4

Taxes paid related to net share settlement of equity awards — ( 183.1 ) — — ( 183.1 )

Share-based compensation for equity-based awards — 953.8 — — 953.8

Settlement of convertible notes 8.4 — — — —

Settlement of note hedges

( 8.4 ) — — — —

Balance as of April 30, 2025 665.9 $ 4,952.2 $ 48.0 $ 2,230.3 $ 7,230.5

Nine Months Ended April 30, 2024

Common Stock and Additional Paid-In Capital

Accumulated Other Comprehensive Loss

Retained Earnings (Accumulated Deficit)

Total Stockholders’ Equity

Shares Amount

Balance as of July 31, 2023 616.7 $ 3,019.0 $ ( 43.2 ) $ ( 1,227.4 ) $ 1,748.4

Net income — — — 2,219.9 2,219.9

Other comprehensive loss

3 unchanged sentences

Share-based compensation for equity-based awards — 295 — — 295

Repurchase and retirement of common stock ( 4.0 ) ( 566.7 ) — — ( 566.7 )

Settlement of convertible notes 4 — — — —

1 unchanged sentence

( 4 ) — — — —

Settlement of warrants

Balance as of April 30, 2024 646.7 $ 3,530.7 $ ( 55.4 ) $ 992.5 $ 4,467.8

Balance as of October 31, 2024 655 $ 4,215 $ ( 4 ) $ 1,701 $ 5,912

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in millions)

Nine Months Ended April 30,

Three Months Ended October 31,

Cash flows from operating activities

$ 880.1 $ 2,219.9

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Deferred income taxes

( 441.5 ) ( 1,818.3 )

Depreciation and amortization 89 84

Amortization of deferred contract costs 126 110

Amortization of debt issuance costs 1.0 2.9

Change in fair value of contingent consideration liability

22 unchanged sentences

Repayments of convertible senior notes

( 582.3 ) ( 834.1 )

Repurchases of common stock

Proceeds from sales of shares through employee equity incentive plans

Payments for taxes related to net share settlement of equity awards

( 183.1 ) ( 22.7 )

Net cash used in financing activities

( 404.8 ) ( 1,163.8 )

Payments of contingent consideration liability

Net cash provided by (used in) financing activities

Net increase in cash, cash equivalents, and restricted cash

1 unchanged sentence

Cash, cash equivalents, and restricted cash—end of period

$ 3,075 $ 2,293

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets

3 unchanged sentences

Non-cash investing and financing activities

Equity consideration for business acquisitions $ — $ ( 27.4 )

Contingent consideration for a business acquisition

6 unchanged sentences

(the “Company,” “we,” “us,” or “our”), headquartered in Santa Clara, California, was incorporated in March 2005 under the laws of the State of Delaware and commenced operations in April 2005.

We empower enterprises, organizations, service providers, and government entities to secure their users, networks, clouds, and endpoints by delivering comprehensive cybersecurity backed by artificial intelligence and automation.

Our cybersecurity platforms and services help enterprises, organizations, service providers, and government entities to secure their users, networks, clouds, and endpoints by delivering comprehensive cybersecurity backed by artificial intelligence and automation.

Basis of Presentation and Principles of Consolidation

1 unchanged sentence

generally accepted accounting principles (“U.S.

GAAP”), consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on September 6, 2024.

GAAP”), consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on August 29, 2025.

The condensed consolidated financial statements include our accounts and our wholly owned subsidiaries.

6 unchanged sentences

We evaluate our estimates on an ongoing basis.

Management estimates include, but are not limited to, the standalone selling price for our products and services, share-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of contingent consideration liability, the assessment of recoverability of our intangibles and goodwill, valuation allowance against deferred tax assets, manufacturing partner and supplier liabilities, deferred contract cost benefit period, and loss contingencies.

Management estimates include, but are not limited to, the standalone selling price for our products and services, share-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of contingent consideration liability, the assessment of recoverability of our intangibles and goodwill, valuation allowance against deferred tax assets, valuation of inventory and manufacturing partner and supplier liabilities, deferred contract cost benefit period, and loss contingencies.

We base our estimates on assumptions, both historical and forward looking, that we believe are reasonable.

Actual results could differ materially from those estimates due to risks and uncertainties, including uncertainty in the current economic environment.

On December 12, 2024, we effected a two -for-one stock split of our outstanding shares of common stock through an amendment to our restated certificate of incorporation (“Stock Split”), which also effected a proportionate increase in the number of authorized shares of our common stock from 1.0 billion to 2.0 billion.

The par value per share of our common stock remains unchanged at $ 0.0001 per share after the Stock Split.

All references made to share or per share amounts related to our common stock have been retroactively adjusted on the accompanying condensed consolidated financial statements and applicable disclosures to reflect the effects of the Stock Split.

Actual results could differ materially from those estimates due to risks and uncertainties.

Summary of Significant Accounting Policies

There have been no material changes to our significant accounting policies as of and for the nine months ended April 30, 2025, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024, except for the update to the disclosure of our accounting policies as described below resulting from our acquisition of certain QRadar assets from International Business Machines Corporation (“IBM”).

Refer to Note 7.

Acquisition for additional information.

Business Combinations

We include the results of operations of the businesses that we acquire as of the respective dates of acquisition.

We allocate the fair value of the purchase price of our acquisitions to the assets acquired and liabilities assumed, including contingent consideration, generally based on their estimated fair values.

The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Additional information existing as of the acquisition date but unknown to us may become known during the remainder of the measurement period, not to exceed 12 months from the acquisition date, which may result in changes to the amounts and allocations recorded.

Contingent consideration obligations incurred in connection with a business combination are recorded at fair value on the acquisition date and remeasured at each subsequent reporting period until the related contingencies have been resolved, with the change in fair value recognized in general and administrative expense on our condensed consolidated statements of operations.

Payments not made soon after the acquisition date to settle a contingent consideration liability are classified as cash flows from financing activities up to the amount of the contingent consideration liability recognized at the acquisition date.

There have been no material changes to our significant accounting policies as of and for the three months ended October 31, 2025, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025.

Recently Issued Accounting Pronouncements

Segment Reporting

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.

The standard is effective for our annual period 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.

Early adoption is permitted.

We expect the adoption of this standard will not have a material impact on our consolidated financial statements.

Income Tax Disclosures

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.

The standard is effective for our annual period in fiscal 2026 and could be applied either prospectively or retrospectively.

Early adoption is permitted.

In December 2023, the Financial Accounting Standards Board (“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.

The standard is effective for our annual periods beginning in fiscal 2026 and could be applied either prospectively or retrospectively.

We are currently evaluating the impact of this standard on our disclosures in the consolidated financial statements.

1 unchanged sentence

In November 2024, the FASB issued authoritative guidance that expands annual and interim disclosure of specified information about certain costs and expenses in the notes to financial statements.

The standard is effective for our annual period in fiscal 2028 and interim periods beginning in the first quarter of fiscal 2029, and could be applied either prospectively or retrospectively.

The standard is effective for our annual periods beginning in fiscal 2028 and interim periods beginning in the first quarter of fiscal 2029, and could be applied either prospectively or retrospectively.

Early adoption is permitted.

We are currently evaluating the impact of this standard on our disclosures in the consolidated financial statements.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued authoritative guidance that provides a practical expedient for estimating expected credit losses on accounts receivable and contract assets.

The standard is effective for our annual and interim periods beginning in the first quarter of fiscal 2027 and will be applied on a prospective basis.

Early adoption is permitted.

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

Accounting for Internal-Use Software

In September 2025, the FASB issued authoritative guidance that modernizes the accounting for internal-use software by eliminating project stage-based capitalization and clarifying the requirements, including probable-to-complete threshold, to commence the capitalization of software development costs.

The standard is effective for our annual and interim periods beginning in the first quarter of fiscal 2029 and could be applied either prospectively or retrospectively.

Early adoption is permitted.

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

Disaggregation of Revenue

The following table presents revenue by geographic theater (in millions):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

United States $ 1,526 $ 1,344

5 unchanged sentences

The following table presents revenue for groups of similar products and services (in millions):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

Product $ 434 $ 354

5 unchanged sentences

Deferred Revenue

During the nine months ended April 30, 2025 and 2024, we recognized approximately $ 4.4 billion and $ 3.7 billion of revenue pertaining to amounts that were deferred as of July 31, 2024 and 2023, respectively.

During the three months ended October 31, 2025 and 2024, we recognized approximately $ 1.9 billion and $ 1.6 billion of revenue pertaining to amounts that were deferred as of July 31, 2025 and 2024, respectively.

Remaining Performance Obligations

Remaining performance obligations were $ 13.5 billion as of April 30, 2025, of which we expect to recognize as revenue approximately $ 6.2 billion over the next 12 months and the remainder thereafter.

Remaining performance obligations were $ 15.5 billion as of October 31, 2025, of which we expect to recognize as revenue approximately $ 6.9 billion over the next 12 months and the remainder thereafter.

Fair Value Measurements

The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of April 30, 2025 and July 31, 2024 (in millions):

April 30, 2025 July 31, 2024

The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2025 and July 31, 2025 (in millions):

October 31, 2025 July 31, 2025

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

13 unchanged sentences

Total short-term investments — 1,139 — 1,139 — 630 — 630

April 30, 2025 July 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Long-term investments:

11 unchanged sentences

Total assets measured at fair value $ 1,105 $ 8,275 $ — $ 9,380 $ 1,206 $ 6,415 $ — $ 7,621

October 31, 2025 July 31, 2025

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Accrued and other liabilities:

4 unchanged sentences

Other long-term liabilities:

Foreign currency forward contracts — 0.2 — 0.2 — 0.9 — 0.9

Contingent consideration

2 unchanged sentences

Total liabilities measured at fair value $ — $ 7 $ 380 $ 387 $ — $ 4 $ 514 $ 518

The fair value of contingent consideration liability is estimated using a discounted cash flow valuation technique.

As part of our acquisition of certain QRadar assets from International Business Machines Corporation (“IBM”) on August 31, 2024, we agreed to make post-closing payments to IBM contingent upon customers entering into qualified new transactions through June 30, 2028.

Payments related to the contingent consideration liability commenced in the fiscal quarter ended October 2025 and are expected to continue through the fiscal quarter ending October 2028.

The estimated range of undiscounted contingent consideration is between $ 0.4 billion and $ 0.6 billion.

The fair value of our contingent consideration liability is estimated using a discounted cash flow valuation technique.

We consider the fair value of our contingent consideration liability to be a Level 3 measurement as we use unobservable inputs in determining discounted cash flows to estimate the fair value.

2 unchanged sentences

The following table presents a reconciliation of our contingent consideration liability (in millions):

Three Months Ended April 30, 2025 Nine Months Ended April 30, 2025

Three Months Ended October 31,

Contingent consideration liability at the beginning of the period

2 unchanged sentences

Contingent consideration liability at the end of the period

$ 669.2 $ 669.2

The total estimated fair value of our financing receivables approximates their carrying amounts as of April 30, 2025 and July 31, 2024.

The total estimated fair value of our financing receivables approximates their carrying amounts as of October 31, 2025 and July 31, 2025.

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 9.

Debt for the carrying amount and estimated fair value of our convertible senior notes as of April 30, 2025 and July 31, 2024.

Cash Equivalents and Investments

Available-for-sale Debt Securities

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of April 30, 2025 and July 31, 2024 (in millions):

April 30, 2025

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of October 31, 2025 and July 31, 2025 (in millions):

October 31, 2025

Amortized Cost

4 unchanged sentences

Corporate debt securities 157 — — 157

government and agency securities 178 — — 178

Total available-for-sale cash equivalents $ 1,090 $ — $ — $ 1,090

Certificates of deposit $ 25 $ — $ — $ 25

Commercial paper 340 — — 340

10 unchanged sentences

Commercial paper $ 169 $ — $ — $ 169

Corporate debt securities 18.2 — — 18.2

government and agency securities 149.6 — — 149.6

Total available-for-sale cash equivalents $ 169 $ — $ — $ 169

Certificates of deposit $ 20.6 $ — $ — $ 20.6

Commercial paper 15 — — 15

4 unchanged sentences

Total available-for-sale investments $ 6,130 $ 56 $ ( 1 ) $ 6,185

As of April 30, 2025, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $ 1.4 million, which were related to $ 691.9 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 $ 0.2 million, which were related to $ 145.5 million of available-for-sale debt securities.

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.

Unrealized losses related to our available-for-sale debt securities are primarily due to interest rate fluctuations as opposed to credit quality.

We do not intend to sell any of the securities in an unrealized loss position and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity.

We did not recognize any credit losses related to our available-for-sale debt securities during the three and nine months ended April 30, 2025 and 2024.

The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of April 30, 2025, by contractual years-to-maturity (in millions):

We did not recognize any credit losses related to our available-for-sale debt securities during the three months ended October 31, 2025 and 2024.

The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of October 31, 2025, by contractual years-to-maturity (in millions):

Amortized Cost Fair Value

7 unchanged sentences

Marketable equity securities consist of money market funds and are included in cash and cash equivalents on our condensed consolidated balance sheets.

As of April 30, 2025 and July 31, 2024, the carrying values of our marketable equity securities were $ 1.1 billion and $ 494.0 million, respectively.

There were no unrealized gains or losses recognized for these securities during the three and nine months ended April 30, 2025 and 2024.

As of October 31, 2025 and July 31, 2025, the carrying values of our marketable equity securities were $ 1.1 billion and $ 1.2 billion, respectively.

There were no unrealized gains or losses recognized for these securities during the three months ended October 31, 2025 and 2024.

Financing Receivables

The following table summarizes our short-term and long-term financing receivables as of April 30, 2025 and July 31, 2024 (in millions):

April 30, 2025 July 31, 2024

The following table summarizes our short-term and long-term financing receivables as of October 31, 2025 and July 31, 2025 (in millions):

October 31, 2025 July 31, 2025

Short-term financing receivables, gross $ 823 $ 806

10 unchanged sentences

Internal Risk Rating (1)

April 30, 2025 July 31, 2024

October 31, 2025 July 31, 2025

Fiscal Year of Origination

7 unchanged sentences

(1) Internal risk ratings are categorized as 1 through 10, with the lowest rating representing the highest quality.

As part of our financing credit risk management policy, we may sell financing receivables with an internal risk rating of 5 or greater on a non-recourse basis to third-party financial institutions when the outstanding balance of our financing receivables exceeds preestablished thresholds.

We sold $ 28.1 million and $ 30.4 million of our financing receivables during the three and nine months ended April 30, 2025, respectively.

The associated gains and losses were not material.

The related proceeds were classified as cash flows from operating activities on our condensed consolidated statements of cash flows.

There was no significant activity in allowance for credit losses during the three and nine months ended April 30, 2025 and 2024.

Past due amounts on financing receivables were not material as of April 30, 2025 and July 31, 2024.

There was no significant activity in allowance for credit losses during the three months ended October 31, 2025 and 2024.

Past due amounts on financing receivables were not material as of October 31, 2025 and July 31, 2025.

Derivative Instruments

3 unchanged sentences

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 revenue and operating expenditures.

As of April 30, 2025 and July 31, 2024, the total notional amount of our outstanding foreign currency forward contracts designated as cash flow hedges was $ 1.1 billion and $ 804.8 million, respectively.

Refer to Note 3.

Fair Value Measurements for the fair value of our derivative instruments as reported on our condensed consolidated balance sheets as of April 30, 2025 and July 31, 2024.

As of April 30, 2025, unrealized gains and losses in accumulated other comprehensive income (“AOCI”) related to our cash flow hedges were a $ 31.4 million net gain, of which $ 23.0 million in gains are expected to be recognized into earnings within the next 12 months.

As of July 31, 2024, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 10.6 million net loss.

As of April 30, 2025 and July 31, 2024, the notional amount of our outstanding foreign currency forward contracts not designated as hedging instruments was $ 563.8 million and $ 375.6 million, respectively.

Protect AI, Inc.

On April 27, 2025, we entered into a definitive agreement to acquire Protect AI, Inc., a privately-held cyber security company (“Protect AI”), for a total consideration of $ 700.0 million in cash and replacement awards, subject to adjustment.

We expect the acquisition will enhance the capabilities of our AI security platform.

The acquisition of Protect AI is expected to close by the first quarter of fiscal 2026, subject to the satisfaction of closing conditions, including regulatory clearance.

IBM QRadar Assets

On August 31, 2024, we completed the acquisition of certain IBM QRadar assets, including certain intellectual property rights, customer relationships, and software as a service customer contracts.

We expect the acquisition will help accelerate the growth of our Cortex Security Operations business.

The total purchase consideration for the acquisition was $ 1.1 billion, which consisted of the following (in millions):

Fair value of contingent consideration liability 648.9

Return of purchase consideration ( 6.3 )

Total $ 1,142.6

As part of the acquisition, we agreed to make post-closing payments to IBM contingent upon customers entering into qualified new transactions through June 30, 2028.

We also expect to receive a return of purchase consideration of $ 6.3 million due to timing of transition of certain underlying customer contracts, of which $ 1.4 million and $ 1.9 million were received during the three and nine months ended April 30, 2025, respectively.

In addition, we have entered into a transition services arrangement with IBM, under which IBM will perform certain services supporting the acquired assets and customers for a period of time that ends in the fiscal quarter ending October 2026.

Payments related to the contingent consideration liability are expected to begin in the fiscal quarter ending July 2025 and continue through the fiscal quarter ending October 2028.

The estimated range of undiscounted contingent consideration is between $ 0.5 billion and $ 0.9 billion.

As of October 31, 2025 and July 31, 2025, the total notional amount of our outstanding foreign currency forward contracts designated as cash flow hedges was $ 760 million and $ 964 million, respectively.

Refer to Note 3.

Fair Value Measurements, for more information on the fair value of our contingent consideration liability.

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 $ 700.7

Identified intangible assets 476.0

Net liabilities assumed ( 34.1 )

Total $ 1,142.6

Goodwill generated from this business combination is primarily attributable to the expected post-acquisition synergies from increased market penetration to support the growth of our Cortex Security Operations business.

The goodwill is deductible for U.S.

income tax purposes.

The following table presents details of the identified intangible assets acquired (in millions, except years):

Fair Value Estimated Useful Life

Customer relationships $ 464.0 12 years

Developed technology 12.0 2 years

Total $ 476.0

Pro forma results of operations have not been presented because the effects of the acquisition were not material to our condensed consolidated statements of operations.

Additional information related to the acquisition existing as of the acquisition date may become known during the remainder of the measurement period, not to exceed 12 months from the acquisition date, which may result in changes to the amounts and allocations recorded.

Goodwill and Intangible Assets

The following table presents details of our goodwill during the nine months ended April 30, 2025 (in millions):

Balance as of July 31, 2024 $ 3,350.1

Goodwill acquired 700.7

Balance as of April 30, 2025 $ 4,050.8

Fair Value Measurements for the fair value of our derivative instruments as reported on our condensed consolidated balance sheets as of October 31, 2025 and July 31, 2025.

As of October 31, 2025, unrealized gains and losses in accumulated other comprehensive income (“AOCI”) related to our cash flow hedges were a $ 32 million net gain, of which $ 34 million in gains are expected to be recognized into earnings within the next 12 months.

As of July 31, 2025, unrealized gains and losses in AOCI related to our cash flow hedges were a $ 40 million net gain.

As of October 31, 2025 and July 31, 2025, the notional amount of our outstanding foreign currency forward contracts not designated as hedging instruments was $ 586 million and $ 504 million, respectively.

CyberArk Software Ltd.

On July 30, 2025, we entered into a definitive agreement to acquire CyberArk Software Ltd., an identity security company (“CyberArk”).

The acquisition is expected to close during the third quarter of our fiscal 2026, subject to the satisfaction of customary closing conditions, including the receipt of certain approvals under specified antitrust and foreign investment laws.

Under the terms of the agreement, CyberArk shareholders will receive $ 45.00 in cash and 2.2005 shares of our common stock for each CyberArk share.

This represents an equity value of approximately $ 25 billion for CyberArk based on the unaffected 10-day average daily volume-weighted average trading prices of our common stock as of July 25, 2025.

We expect to fund the cash portion of the consideration with our cash on hand.

The agreement also provides that we will assume certain unvested outstanding equity awards held by CyberArk employees.

We and CyberArk each have certain termination rights under the definitive acquisition agreement.

A termination fee of $ 1.0 billion may be payable by us to CyberArk, or a fee of $ 750 million may be payable by CyberArk to us, upon termination of the definitive acquisition agreement under specified circumstances.

Intangible Assets

Purchased Intangible Assets

The following table presents details of our purchased intangible assets as of April 30, 2025 and July 31, 2024 (in millions):

April 30, 2025 July 31, 2024

The following table presents details of our purchased intangible assets as of October 31, 2025 and July 31, 2025 (in millions):

October 31, 2025 July 31, 2025

Gross Carrying Amount

8 unchanged sentences

Acquired intellectual property 24 ( 9 ) 15 24 ( 9 ) 15

Trade name and trademarks 9.4 ( 9.4 ) — 9.4 ( 9.4 ) —

Other 1 ( 1 ) — 1 ( 1 ) —

Total purchased intangible assets $ 1,149 $ ( 426 ) $ 723 $ 1,170 $ ( 407 ) $ 763

We recognized amortization expense of $ 43.2 million and $ 128.8 million for the three and nine months ended April 30, 2025, respectively, and $ 33.4 million and $ 86.7 million for the three and nine months ended April 30, 2024, respectively.

The following table summarizes estimated future amortization expense of our intangible assets subject to amortization as of April 30, 2025 (in millions):

We recognized amortization expense of $ 40 million and $ 41 million for the three months ended October 31, 2025 and 2024 respectively.

The following table summarizes estimated future amortization expense of our intangible assets subject to amortization as of October 31, 2025 (in millions):

Fiscal years ending July 31,

1 unchanged sentence

Future amortization expense $ 723 $ 116 $ 125 $ 104 $ 78 $ 62 $ 238

Convertible Senior Notes

Convertible Senior Notes, Note Hedges, and Warrants

In June 2020, we issued $ 2.0 billion aggregate principal amount of 0.375 % Convertible Senior Notes due 2025 (the “2025 Notes”).

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.

The 2025 Notes are governed by an indenture between us, as the issuer, and U.S.

Bank National Association, as Trustee (the “Indenture”).

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.

We may redeem for cash all or any portion of the 2025 Notes, at our option, on or after June 5, 2023 and prior to the 31st scheduled trading day immediately preceding the maturity date if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on and including the trading day preceding the date on which we provide notice of redemption.

The redemption will be at a price equal to 100 % of the principal amount of the 2025 Notes and adjusted for interest.

If we call any or all of the 2025 Notes for redemption, holders may convert such 2025 Notes called for redemption at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date.

The 2025 Notes are convertible for an initial 40.3 million shares of our common stock at a conversion rate of approximately 20.1612 shares of common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $ 49.60 per share of common stock, subject to adjustments.

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:

• during any fiscal quarter commencing after the fiscal quarters 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”);

• 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.

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.

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.

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.

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 2025 Notes were able to early convert their 2025 Notes at any time prior to the close of business on the business day immediately preceding March 1, 2025 for settlement prior to the maturity date as the sales price condition had been met during the fiscal quarter ended January 31, 2025.

During the three and nine months ended April 30, 2025, holders of the 2025 Notes converted $ 150.9 million and $ 582.3 million, respectively, in aggregate principal amount of the 2025 Notes, which we repaid in cash.

We also issued 2.2 million and 8.4 million shares of our common stock to the holders of the 2025 Notes during the three and nine months ended April 30, 2025, respectively, for the conversion value in excess of the principal amount.

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.

We also issued 9.1 million and 11.3 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.

These shares were fully offset by shares we received from the corresponding exercise of the note hedges.

On or after March 1, 2025, holders may surrender their 2025 Notes for conversion at any time prior to maturity, in accordance with the terms described above.

Such conversion requests will settle upon maturity of the 2025 Notes.

The net carrying amount of the 2025 Notes was classified as a current liability on our condensed consolidated balance sheet as of April 30, 2025.

The following table sets forth the net carrying amount of our 2025 Notes (in millions):

April 30, 2025 July 31, 2024

Principal $ 383.3 $ 965.6

debt issuance costs, net of amortization

( 0.1 ) ( 1.7 )

Net carrying amount $ 383.2 $ 963.9

The total estimated fair value of the 2025 Notes was $ 1.4 billion as of April 30, 2025 and $ 3.2 billion as of July 31, 2024.

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 as of April 30, 2025 and July 31, 2024 to be a Level 2 measurement.

The fair value of the 2025 Notes is primarily affected by the trading price of our common stock and market interest rates.

The following table sets forth interest expense recognized related to the 2025 Notes (dollars in millions):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Contractual interest expense $ 0.5 $ 1.5 $ 1.8 $ 5.1

Amortization of debt issuance costs 0.2 0.8 1.0 2.9

Total interest expense $ 0.7 $ 2.3 $ 2.8 $ 8.0

Effective interest rate 0.6 % 0.6 % 0.6 % 0.6 %

To minimize the impact of potential economic dilution upon conversion of our convertible senior notes, we entered into separate convertible note hedge transactions (the “2025 Note Hedges”) with respect to our common stock concurrent with the issuance of the 2025 Notes.

The 2025 Note Hedges cover up to 40.3 million shares of our common stock at a strike price per share that corresponds to the initial conversion price of the 2025 Notes, which are also subject to adjustment, and are exercisable upon conversion of the 2025 Notes.

The 2025 Note Hedges will expire upon maturity of the 2025 Notes.

The 2025 Note Hedges are separate transactions and are not part of the terms of the 2025 Notes.

Holders of the 2025 Notes will not have any rights with respect to the 2025 Note Hedges.

The 2025 Notes were converted prior to or settled on the maturity date of June 1, 2025 in accordance with their terms.

Concurrent with the issuance of the 2025 Notes, we entered into separate convertible note hedge transactions (the “2025 Note Hedges”) with respect to our common stock for an aggregate payment of $ 371 million.

The 2025 Note Hedges expired upon maturity of the 2025 Notes.

Any shares of our common stock receivable by us under the 2025 Note Hedges are excluded from the calculation of diluted earnings per share as they are antidilutive.

We paid an aggregate amount of $ 370.8 million for the 2025 Note Hedges, which is included in additional paid-in capital on our condensed consolidated balance sheets.

As a result of the conversions of the 2025 Notes settled during the three and nine months ended April 30, 2025, we exercised the corresponding portion of our 2025 Note Hedges and received 2.2 million and 8.4 million shares of our common stock during the respective periods.

As a result of the conversions of the 2025 Notes settled during the three and nine months ended April 30, 2024, we exercised the corresponding portion of our 2025 Note Hedges and received 9.1 million and 11.3 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 0.75 % convertible senior notes due 2023 issued in July 2018, 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.

The 2023 Warrants were, and the 2025 Warrants are, exercisable over 60 scheduled trading days beginning October 2023 and September 2025, respectively.

The following table presents details of our Warrants (in millions, except per share data):

Initial Number of Shares

Strike Price per Share

Aggregate Proceeds

2023 Warrants (1)

38.1 $ 69.63 $ 145.4

2025 Warrants 40.3 $ 68.08 $ 202.8

(1) The 2023 Warrants were net settled during the 60 scheduled trading days from October to December 2023.

The shares issuable under the Warrants are included in the calculation of diluted earnings per share when the average market value per share of our common stock for the reporting period exceeds the applicable strike price for such series of Warrants.

The Warrants are separate transactions and are not part of either series of Notes or Note Hedges and are not remeasured through earnings each reporting period.

Holders of the Notes of either series will not have any rights with respect to the Warrants.

The aggregate proceeds received from the sale of the Warrants are included in additional paid-in capital on our condensed consolidated balance sheets.

During the nine months ended April 30, 2024, we net settled all of the 2023 Warrants with 18.0 million shares of our common stock with a fair value of $ 2.4 billion.

Separately, but concurrently with the issuance of our 2025 Notes, we entered into transactions whereby we sold warrants (the “2025 Warrants”) to acquire 40 million shares of our common stock with a strike price of $ 68.08 per share, subject to anti-dilution adjustments, for aggregate proceeds of $ 203 million.

The 2025 Warrants are exercisable over 60 scheduled trading days beginning September 2025.

The shares issuable under the 2025 Warrants are included in the calculation of diluted earnings per share when the average market value per share of our common stock for the reporting period exceeds the strike price of the 2025 Warrants.

During the three months ended October 31, 2025, we net settled a portion of the 2025 Warrants with 20 million shares of our common stock with a fair value of $ 4.1 billion.

The number of net shares issued was determined based on the number of 2025 Warrants exercised multiplied by the difference between the strike price of the 2025 Warrants and their daily volume-weighted-average stock price.

As of October 31, 2025, up to 11 million shares of our common stock were issuable for gross settlement under the remaining outstanding 2025 Warrants, which will be net settled when exercised through the end of November 2025.

Revolving Credit Facility

1 unchanged sentence

The Credit Facility matures on April 13, 2028.

The borrowings under the 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.

The borrowings under the 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.

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.

As of April 30, 2025, there were no amounts outstanding and we were in compliance with all covenants under the Credit Agreement.

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.

As of October 31, 2025, there were no amounts outstanding and we were in compliance with all covenants under the Credit Agreement.

Commitments and Contingencies

Purchase Commitments

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.

We have entered into various non-cancelable agreements with cloud hosting service providers, under which we are committed to minimum or fixed purchases of certain cloud hosting services.

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.

Other purchase obligations include non-cancellable subscription agreements and other commitments in the normal course of business.

The following table presents details of the aggregate future non-cancelable purchase commitments under these agreements as of April 30, 2025 (in millions):

The following table presents details of the aggregate future non-cancelable purchase commitments under these agreements as of October 31, 2025 (in millions):

Fiscal years ending July 31,

4 unchanged sentences

141 66 61 7 3 4 —

Total purchase commitments

$ 6,706 $ 311 $ 721 $ 1,005 $ 1,020 $ 1,152 $ 2,497

Additionally, we have a $ 127.3 million minimum purchase commitment with a cloud service provider through September 2027 with no specified annual commitments.

Additionally, we have a $ 112 million minimum purchase commitment with a cloud hosting service provider through September 2027 with no specified annual commitments.

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.

16 unchanged sentences

This bond prevents execution of the judgment while appeals are pending.

In addition, Centripetal filed infringement contentions on certain of their patents in the European Patent Office in Germany, to which we filed invalidity challenges.

In addition, Centripetal filed infringement contentions on certain of their patents in the European Patent Office and Unified Patent Court in Germany, to which we filed appropriate legal challenges.

Those matters are still pending.

As of July 31, 2024, we accrued $ 184.4 million for the verdict amount and estimated interest.

As of April 30, 2025, we accrued $ 144.1 million based on the judgment and estimated interest, which is recorded in other long-term liabilities on our condensed consolidated balance sheets.

The corresponding amount was a charge of $ 1.3 million for the three months ended April 30, 2025, and a release of $ 40.3 million for the nine months ended April 30, 2025, which is included in general and administrative expense on our condensed consolidated statements of operations.

As of October 31, 2025 and July 31, 2025, we accrued $ 147 million and $ 146 million based on the judgment and estimated interest, which is recorded in other long-term liabilities on our condensed consolidated balance sheets.

The corresponding charge was $ 1 million for the three months ended October 31, 2025.

We recorded a release of $ 43 million for the three months ended October 31, 2024.

These amounts are included in general and administrative expense on our condensed consolidated statements of operations.

Palo Alto Networks

5 unchanged sentences

We are unable, at this time, to reasonably estimate a possible loss or potential range of loss, if any.

Eire OG Innovations.

Palo Alto Networks

On April 3, 2024, Eire OG Innovations filed a lawsuit against us in the United States District Court for the Eastern District of Texas asserting infringement of multiple patents, certain of which were subsequently dismissed.

The complaint requests monetary damages and attorneys’ fees.

Trial is set for February 17, 2026.

As of October 31, 2025, we accrued for an immaterial amount related to this matter.

Stockholders’ Equity

1 unchanged sentence

In February 2019, our board of directors authorized a $ 1.0 billion share repurchase program, which is funded from available working capital.

In December 2020, August 2021, August 2022, November 2023, and August 2024, our board of directors authorized additional $ 700.0 million, $ 676.1 million, $ 915.0 million, $ 316.7 million and $ 500.0 million increases to this share repurchase program, respectively, bringing the total authorization under this share repurchase program to $ 4.1 billion (our “current authorization”).

The expiration date of our current authorization was extended to December 31, 2025, and our repurchase program may be suspended or discontinued at any time.

Our board of directors subsequently authorized additional increases to this share repurchase program, bringing the total authorization under this share repurchase program to $ 4.1 billion (our “current authorization”).

As of October 31, 2025, the expiration date of our current authorization was December 31, 2025.

The expiration date of the authorization was subsequently extended to December 31, 2026.

Refer to Note 16.

Subsequent Events for additional information.

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.

We did not repurchase shares of our common stock during the three and nine months ended April 30, 2025.

During the three and nine months ended April 30, 2024, we repurchased and retired 3.4 million and 4.0 million shares of our common stock under our current repurchase authorization for an aggregate purchase price of $ 500.0 million and $ 566.7 million, including transaction costs, at an average price of $ 146.96 and $ 142.00 per share, respectively.

As of April 30, 2025, $ 1.0 billion remained available for future share repurchases under our current repurchase authorization.

The total price of the shares repurchased and related transaction costs are reflected as a reduction to common stock and additional paid-in capital on our condensed consolidated balance sheets.

We did not repurchase shares of our common stock during the three months ended October 31, 2025 and 2024.

As of October 31, 2025, $ 1.0 billion remained available for future share repurchases under our current repurchase authorization.

Equity Award Plans

Restricted Stock Unit (“RSU”) and Performance-Based Stock Unit (“PSU”) Activities

The following table summarizes the RSU and PSU activity under our stock plans during the nine months ended April 30, 2025 (in millions, except per share amounts):

The following table summarizes the RSU and PSU activity under our stock plans during the three months ended October 31, 2025 (in millions, except per share amounts):

Unvested RSUs

10 unchanged sentences

Forfeited — $ 136.82 — $ 194.01

Balance—April 30, 2025 14.6 $ 135.64 $ 2,721.3 9.4 $ 140.92 $ 1,765.5

Balance—October 31, 2025 12 $ 150.94 $ 2,623 12 $ 153.01 $ 2,677

(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.

(2) Includes time-based vesting for PSUs.

Our RSUs generally vest over a period of three to four years from the date of grant.

Our RSUs generally vest over a period of four years from the date of grant.

Until vested, RSUs do not have the voting and dividend participation rights of common stock and the shares underlying the awards are not considered issued and outstanding.

1 unchanged sentence

The number of PSUs eligible to vest is determined based on the level of achievement against certain performance conditions, market conditions, and a combination thereof.

During the nine months ended April 30, 2025, we granted 3.4 million shares of PSUs that contain service, performance, and market conditions.

During the three months ended October 31, 2025, we granted 3 million shares of PSUs that contain service, performance, and market conditions.

The service conditions are satisfied after a period of one to three years .

1 unchanged sentence

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.

As of April 30, 2025, we have approved 2.7 million shares of PSUs, which will be granted upon the performance condition being established during the next two fiscal years.

As of October 31, 2025, we have approved 3 million shares of PSUs, which will be granted upon the performance condition being established during the next two fiscal years.

The fair value of the PSUs subject to market conditions is estimated on the grant date using a Monte Carlo simulation model.

The following table summarizes the assumptions used and the resulting grant-date fair value of our PSUs subject to market conditions granted during the nine months ended April 30, 2025 and 2024:

Nine Months Ended April 30,

The following table summarizes the assumptions used and the resulting grant-date fair value of our PSUs subject to market conditions granted during the three months ended October 31, 2025 and 2024:

Three Months Ended October 31,

Volatility 36.6 % - 42.6 %

9 unchanged sentences

The market conditions were achieved when certain stock price targets were met.

As of April 30, 2025, all of our outstanding PSOs have been fully vested.

As of October 31, 2025 and July 31, 2025, all of our outstanding PSOs have been fully vested.

The maximum contractual term of our outstanding PSOs is seven and a half years from the date of grant in fiscal year 2018 and 2019.

The following table summarizes the PSO activity under our stock plans during the nine months ended April 30, 2025 (in millions, except per share amounts):

The following table summarizes the PSO activity under our stock plans during the three months ended October 31, 2025 (in millions, except per share amounts):

Number of Shares

4 unchanged sentences

Exercised ( 1 ) $ 32.88

Balance—April 30, 2025 1.7 $ 32.67 0.8 $ 258.3

Exercisable—April 30, 2025 1.7 $ 32.67 0.8 $ 258.3

Balance—October 31, 2025 — $ 32.25 0.5 $ 52

Exercisable—October 31, 2025 — $ 32.25 0.5 $ 52

Share-Based Compensation

The following table summarizes share-based compensation included in costs and expenses (in millions):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

Cost of product revenue $ 1 $ 1

4 unchanged sentences

Total share-based compensation $ 370 $ 295

As of April 30, 2025, total compensation cost related to unvested share-based awards not yet recognized was $ 2.4 billion.

As of October 31, 2025, total compensation cost related to unvested share-based awards not yet recognized was $ 2.2 billion.

This cost is expected to be amortized over a weighted-average period of approximately 2.4 years.

For the three and nine months ended April 30, 2025, our provision for income taxes reflected effective tax rates of 15.6 % and 12.3 %, respectively.

Our income taxes for the three and nine months ended April 30, 2025 were primarily due to U.S.

For the three months ended October 31, 2025 and 2024, our provision for income taxes reflected effective tax rates of 18.9 % and 4.9 %, respectively.

Our income taxes for the three months ended October 31, 2025 and 2024 were primarily due to U.S.

and foreign income taxes.

Our effective tax rates for the three and nine months ended April 30, 2025 differed from the U.S.

Our effective tax rates for the three months ended October 31, 2025 and 2024 differed from the U.S.

statutory tax rate primarily due to excess tax benefits from share-based compensation.

For the three and nine months ended April 30, 2024, our benefit from income taxes reflected effective tax rates of negative 11.0 % and negative 231.7 %, respectively.

Our effective tax rate for the three months ended April 30, 2024 differed from the U.S.

statutory tax rate primarily due to 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 (“U.K.”) deferred tax assets.

Our effective tax rate for the nine months ended April 30, 2024 differed from the U.S.

statutory tax rate primarily due to the release of our valuation allowance on U.S.

federal, U.S.

states other than California, and U.K.

deferred tax assets.

As a result of the valuation allowance release, during the three and nine months ended April 30, 2024, we recognized a deferred tax benefit of $ 40.0 million and $ 3.3 billion, respectively, for the U.S.

federal, U.S.

states other than California, and U.K.

deferred tax assets.

In addition, during the three and nine months ended April 30, 2024, we recognized a deferred tax expense of $ 7.4 million and $ 1.7 billion, respectively, for the U.S.

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.

Accordingly, during the three and nine months ended April 30, 2024, we recognized a net tax benefit of $ 32.6 million and $ 1.6 billion, respectively, relating to our valuation allowance release.

Net Income Per Share

3 unchanged sentences

The following table presents the computation of basic and diluted net income per share of common stock (in millions, except per share data):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

$ 262.1 $ 278.8 $ 880.1 $ 2,219.9

Three Months Ended October 31,

Weighted-average shares used to compute net income per share, basic

665.1 645.8 659.3 635.0

Weighted-average effect of potentially dilutive securities:

3 unchanged sentences

Weighted-average shares used to compute net income per share, diluted

707.4 709.3 708.6 708.0

Net income per share, basic

3 unchanged sentences

The following securities were excluded from the computation of diluted net income 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):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

Employee equity incentive plans 3 3

1 unchanged sentence

The following table sets forth the components of other income, net (in millions):

Three Months Ended April 30, Nine Months Ended April 30,

2025 2024 2025 2024

Three Months Ended October 31,

Interest income $ 105 $ 86

Foreign currency exchange gains (losses), net ( 11 ) ( 8 )

7.8 ( 5.8 ) 8.9 ( 5.9 )

Total other income, net $ 103 $ 83

Subsequent Events

Share Repurchase

On November 18, 2025, our board of directors authorized the extension of the expiration date of our current share repurchase authorization to December 31, 2026.

Our repurchase program may be suspended or discontinued at any time without prior notice.

Chronosphere, Inc.

On November 19, 2025, we entered into a definitive agreement to acquire Chronosphere, Inc., a privately-held observability technology company (“Chronosphere”), in exchange for total consideration of $ 3.35 billion in cash and replacement awards, subject to adjustments.

We expect the acquisition to be our entry into the observability space.

The acquisition of Chronosphere is expected to close during the second half of our fiscal 2026, subject to the satisfaction of closing conditions, including regulatory clearance.

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

What changed 10-Q

Item 1. Financial Statements