What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-28 · 251 added, 204 removed, 910 unchanged (33% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Zoom Communications, Inc.:

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Income from operations 1,123,633 813,295 525,279

Gains (losses) on strategic investments, net

Gains on strategic investments, net

969,822 177,142 109,770

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522,137 305,346 194,850

Net income 1,010,238 637,462 103,711

Undistributed earnings attributable to participating securities — — ( 7 )

Net income attributable to common stockholders $ 1,010,238 $ 637,462 $ 103,704

Net income per share attributable to common stockholders:

$ 1,900,148 $ 1,010,238 $ 637,462

Net income per share:

Basic $ 6.32 $ 3.28 $ 2.12

Diluted $ 6.18 $ 3.21 $ 2.07

Weighted-average shares used in computing net income per share attributable to common stockholders:

Weighted-average shares used in computing net income per share:

Basic 300,503,787 307,981,971 300,748,162

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Net income $ 1,900,148 $ 1,010,238 $ 637,462

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale marketable securities, net of income tax (expense) benefit of $( 1,205 ), $( 15,501 ), and $ 9,834 during the fiscal years ended January 31, 2025, 2024 and 2023, respectively

Other comprehensive income:

Unrealized gain on available-for-sale marketable securities, net of income tax expense of $ 1,154 , $ 1,205 , and $ 15,501 during the fiscal years ended January 31, 2026, 2025 and 2024, respectively

3,554 3,927 51,448

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Issuance of common stock upon release of restricted stock units 11,349,453 11 ( 11 ) —

Repurchase of common stock ( 11,170,907 ) ( 11 ) ( 999,992 ) — — ( 1,000,003 )

Issuance of common stock for employee stock purchase plan 921,892 1 54,096 — — 54,097

Stock-based compensation expense — — 1,059,597 — — 1,059,597

Other comprehensive loss — — — ( 32,483 ) — ( 32,483 )

Other comprehensive income — — — 51,448 — 51,448

Net income — — — — 637,462 637,462

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Issuance of common stock upon release of restricted stock units 12,095,006 12 ( 12 ) — — —

Repurchase of common stock ( 15,888,316 ) ( 16 ) ( 1,095,102 ) — — ( 1,095,118 )

Issuance of common stock for employee stock purchase plan 1,066,977 1 54,007 — — 54,008

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Issuance of common stock upon release of restricted stock units 11,309,015 11 ( 11 ) — — —

Shares withheld related to net share settlement of equity awards ( 3,180,420 ) ( 3 ) ( 247,829 ) — — ( 247,832 )

Repurchase of common stock, including excise tax ( 20,385,361 ) ( 20 ) ( 1,628,078 ) — — ( 1,628,098 )

Issuance of common stock for employee stock purchase plan 1,200,743 1 61,205 — — 61,206

Charitable donation of common stock — — 20,904 20,904

Stock-based compensation expense — — 760,810 — — 760,810

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Amortization of deferred contract acquisition costs 283,382 282,103 270,701

(Gains) losses on strategic investments, net ( 177,142 ) ( 109,770 ) 37,571

Gains on strategic investments, net ( 969,822 ) ( 177,142 ) ( 109,770 )

Depreciation and amortization 132,831 122,632 104,451

Provision for accounts receivable allowances 17,351 20,022 35,244

Unrealized foreign exchange losses 17,165 12,259 13,266

Unrealized foreign exchange (gains) losses ( 11,405 ) 17,165 12,259

Non-cash operating lease cost 24,778 24,066 21,066

Charitable donation of common stock

Amortization of discount/premium on marketable securities ( 28,910 ) ( 71,636 ) ( 50,770 )

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Purchases of strategic investments ( 98,245 ) ( 18,500 ) ( 70,527 )

Proceeds from strategic investments 13,384 170,067 300

Cash paid for acquisition, net of cash acquired — ( 204,918 ) ( 120,553 )

Proceeds from sale of strategic investments 80,438 13,384 170,067

Cash paid for acquisitions, net of cash acquired ( 119,796 ) — ( 204,918 )

Purchases of intangible assets ( 500 ) — —

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Cash flows from financing activities:

Cash paid for repurchases of common stock ( 1,093,878 ) — ( 1,000,003 )

Cash paid for repurchases of common stock, including excise taxes ( 1,620,691 ) ( 1,093,878 ) —

Proceeds from issuance of common stock for employee stock purchase plan 61,206 54,008 54,097

Proceeds from exercise of stock options 2,482 4,619 10,195

Proceeds from employee equity transactions to be remitted (remitted) to employees and tax authorities, net 7,174 ( 4,106 ) 774

Proceeds from employee equity transactions (remitted) to be remitted to employees and tax authorities, net ( 523 ) 7,174 ( 4,106 )

Taxes paid related to net share settlement of equity awards ( 247,832 ) — —

Net cash (used in) provided by financing activities ( 1,805,358 ) ( 1,028,077 ) 60,186

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Cash, cash equivalents, and restricted cash—end of year $ 1,283,781 $ 1,361,417 $ 1,565,380

Supplemental disclosures of cash flow information

Cash paid for income taxes, net $ 395,401 $ 348,129 $ 309,084

Supplemental disclosures of non-cash investing and financing information

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Excise tax on share repurchases included in accrued expenses $ 8,648 $ 1,240 $ —

Vesting of early exercised stock options $ — $ — $ 238

Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above:

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Description of Business

Zoom provides an open, AI-first work platform for human connection.

Our culture of delivering happiness drives our mission and values and is fundamental to everything we do at Zoom.

Zoom provides the AI-first, open work platform built for human connection and purposefully designed to move conversations to completion.

Zoom enables customers to seamlessly collaborate, communicate, and drive outcomes across meetings, chat, phone, contact center, events, and more — all with the built-in assistance of Zoom AI Companion.

We were incorporated in the state of Delaware in April 2011, and are headquartered in San Jose, California.

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The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period.

Significant items subject to such estimates and assumptions include, but are not limited to, the estimated expected benefit period for deferred contract acquisition costs, stock-based compensation expense, the fair value of marketable securities, acquired intangible assets and goodwill, the valuation of deferred income tax assets and uncertain tax positions, and accruals and contingencies.

Significant items subject to such estimates and assumptions include, but are not limited to, the estimated expected benefit period for deferred contract acquisition costs, the fair value of marketable securities, acquired intangible assets and goodwill, the recognition and measurement of revenue, including estimates of variable consideration and the customer’s ability and intent to pay, the valuation of deferred income tax assets and uncertain tax positions, and accruals and contingencies.

Actual results could materially differ from those estimates.

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We maintain our cash, cash equivalents, marketable securities, and restricted cash with high-quality financial institutions with investment-grade ratings.

A majority of the cash balances are with U.S.

The majority of our cash balances are with U.S.

banks and are insured to the extent defined by the Federal Deposit Insurance Corporation.

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Cash and cash equivalents consist of cash in banks and highly liquid investments, primarily money market funds, purchased with an original maturity of three months or less.

Restricted cash consists of certificates of deposit collateralizing our operating leases and cash from proceeds from international employees’ sales of our common stock, and is included in prepaid expenses and other current assets and other assets, noncurrent in the consolidated balance sheets.

As of January 31, 2026 and 2025, we had $ 10.9 million and $ 12.0 million, respectively, of cash from proceeds from international employees’ sales of our common stock.

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Accounts receivable, net $ 497,339 $ 495,228

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as general and administrative expense in the consolidated statements of operations.

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable, with any changes classified as general and administrative expense in the consolidated statements of operations.

The allowance for credit losses is based on management’s estimate for expected credit losses for outstanding accounts receivable.

We determine expected credit losses based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns, the establishment of specific reserves for customers in an adverse financial condition, and adjust based upon our expectations of changes in macroeconomic conditions that may impact the collectibility of outstanding receivables, including noncurrent accounts receivable.

We also consider current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

We determine expected credit losses based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns, and the establishment of specific reserves for customers in an adverse financial condition or other factors impacting credit quality.

We also consider current market conditions to inform adjustments to historical loss data.

We reassess the adequacy of the allowance for credit losses each reporting period.

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Available-for-sale Investments

Available-for-sale investments consist primarily of high-grade commercial paper, agency bonds, corporate bonds, corporate and other debt securities, U.S.

Available-for-sale investments consist primarily of agency bonds, U.S.

government agency securities, and treasury bills.

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As a result, we classify our securities, including those with maturities beyond 12 months, as current assets in the consolidated balance sheets.

We carry these securities at fair value and record unrealized gains and losses in accumulated other comprehensive income (loss), which is reflected as a component of stockholders’ equity.

We evaluate our securities with unrealized loss positions as to whether the declines in fair value were due to credit losses, and record the portion of impairment relating to the credit losses through allowance for credit losses limited to the amount that fair value was less than the amortized cost basis.

We carry these securities at fair value and record unrealized gains and losses in accumulated other comprehensive income, which is reflected as a component of stockholders’ equity.

We evaluate our securities with unrealized loss positions as to whether the declines in fair value were due to credit losses, and record the portion of impairment relating to the credit losses through the allowance for credit losses limited to the amount that fair value was less than the amortized cost basis.

Realized gains and losses from the sale of marketable securities are determined based on the specific identification method.

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Strategic Investments

We hold strategic investments in publicly held equity securities and privately held debt and equity securities in which we do not have a controlling interest.

Publicly held equity securities are measured using quoted prices in their respective active markets with changes recorded through gains (losses) on strategic investments, net in the consolidated statements of operations.

We hold strategic investments in publicly held equity securities and privately held equity and debt securities in which we do not have a controlling interest.

Publicly held equity securities are measured using quoted prices in their respective active markets with changes recorded through gains on strategic investments, net in the consolidated statements of operations.

Privately held equity securities without a readily determinable fair value are recorded at cost and adjusted for impairments and observable price changes with a same or similar security from the same issuer (i.e.

using the measurement alternative) and are recorded through gains (losses) on strategic investments, net in the consolidated statements of operations.

If, based on the terms of these publicly traded and privately held securities, we determine that we exercise significant influence on the entity to which these securities relate, we will apply the equity method of accounting for such investments.

Privately held equity securities that are accounted for under the equity method are measured at cost less any impairment, plus or minus our share of equity method investee income or loss, which is reported in gains (losses) on strategic investments, net in the consolidated statements of operations.

Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive income (loss) on the consolidated balance sheets.

On a quarterly basis, we assess our privately held debt and equity securities in our strategic investment portfolio for indicators for impairment.

For the fiscal years ended January 31, 2025, 2024, and 2023, we recognized an immaterial amount of impairment to our privately held debt and equity securities.

using the measurement alternative) and are recorded through gains on strategic investments, net in the consolidated statements of operations.

Privately held equity securities that are accounted for under the equity method are measured at cost less any impairment, plus or minus our share of

equity method investee income or loss, which is reported in gains on strategic investments, net in the consolidated statements of operations.

Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive income on the consolidated balance sheets.

On a quarterly basis, we assess our privately held equity and debt securities in our strategic investment portfolio for indicators of impairment.

For the fiscal years ended January 31, 2026, 2025, and 2024, we recognized an immaterial amount of impairment to our privately held equity and debt securities.

Fair Value Measurements

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We measure financial assets and liabilities at fair value at each reporting period using a fair value hierarchy, which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Three levels of inputs may be used to measure fair value:

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Property and equipment, net, are stated at cost, less accumulated depreciation and amortization.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets, determined to be three to five years .

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets, which is three to five years .

Leasehold improvements are amortized over the shorter of the remaining lease term or the estimated useful life of five years .

Expenditures for maintenance and repairs are expensed as incurred.

Significant improvements and betterments that substantially enhance the life of an asset are capitalized.

Software Development Costs

We capitalize certain development costs related to our unified communications and collaboration platform during the application development stage as long as it is probable the project will be completed, and the software will be used to perform the function intended.

Capitalized software development costs are recorded as part of property and equipment, net.

Significant improvements and enhancements that substantially enhance the life of an asset are capitalized.

Internal-Use Software Development Costs

During the application development stage, we capitalize certain costs incurred for software developed for internal use related to our unified communications and collaboration platform as long as it is probable the project will be completed and the software will be used to perform the function intended.

Capitalized software development costs are recorded in property and equipment, net.

Costs related to preliminary project activities and post-implementation activities are expensed as incurred.

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We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

We have capitalized $ 14.9 million, $ 8.1 million, and $ 18.0 million of software development costs during the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

All lease arrangements are generally recognized at lease commencement.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at commencement.

For short-term leases (an initial term of 12 months or less), an ROU asset and corresponding lease liability are not recorded and we record rent expense in our consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred.

We capitalized $ 10.0 million, $ 14.9 million, and $ 8.1 million of internal-use software development costs during the fiscal years ended January 31, 2026, 2025, and 2024, respectively.

All lease arrangements, including operating lease right-of-use (“ROU”) assets and operating lease liabilities, are generally recognized at lease commencement.

For short-term leases (an initial term of 12 months or less), an ROU asset and corresponding lease liability are not recorded.

Instead, we record rent expense on a straight-line basis over the lease term in our consolidated statements of operations and record variable lease payments as incurred.

ROU assets represent our right to use an underlying asset during the reasonably certain lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

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Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of fixed payments not yet paid over the lease term.

We use our incremental

borrowing rate based on the information available at the commencement date in determining the lease liabilities as our leases generally do not provide an implicit rate.

We use our incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as our leases generally do not provide an

implicit rate.

Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located.

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Assets to be disposed of are reported at the lower of their carrying amount or fair value, less costs to sell.

There were no impairment charges recognized related to long-lived assets during the fiscal years ended January 31, 2025, 2024, or 2023.

Business Combinations

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

When determining the fair value of assets acquired and liabilities assumed, we make estimates and assumptions, especially with respect to intangible assets.

Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

When determining the fair value of assets acquired and liabilities assumed, we make estimates and use assumptions, especially with respect to intangible assets.

Our estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date.

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If we determine that the life of an intangible asset is no longer indefinite, that asset would be tested for impairment and amortized prospectively over its estimated remaining useful life.

There were no impairment charges to acquired intangible assets during the fiscal year ended January 31, 2025.

There were no impairment charges to acquired intangible assets during the fiscal years ended January 31, 2026, 2025, and 2024.

Revenue Recognition

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Identification of the contract, or contracts, with the customer

We determine a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, the customer has the ability and intent to pay, and the contract has commercial substance.

We determine that a contract with a customer exists when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, the customer has the ability and intent to pay, and the contract has commercial substance.

At contract inception, we will evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation.

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Identification of the performance obligations in the contract

Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services or products is separately identifiable from other promises in the contract.

Performance obligations in a contract are identified based on services to be transferred to the customer that are both capable of being distinct - providing benefit on their own or with readily available resources - and distinct within the contract, meaning their transfer is separately identifiable from other contractual promises.

Promised services or products under which both of these two criteria are not met are recognized as a combined, single performance obligation.

Our performance obligations primarily relate to access to our unified communications and collaboration platform, which consists of one or more software-based services.

Our customers do not have the ability to take possession of our software, and through access to our platform, we provide a series of distinct software-based services that are satisfied over the term of the subscription.

Our customers do not have the ability to take possession of our software, and we provide a series of distinct software-based services that are satisfied over the term of the subscription through access to our platform.

Determination of the transaction price

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Our unified communications and collaboration platform and related services are typically warranted to perform in a professional manner that will comply with the terms of the subscription agreements.

In addition, we include service-level commitments to our customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that we fail to meet those service levels.

In addition, we include service-level commitments to our customers warranting certain levels of uptime reliability and performance, which permits those customers to receive credits in the event that we fail to meet those service levels.

These credits represent a form of variable consideration.

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Recognition of the revenue when, or as, a performance obligation is satisfied

Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer.

Revenue is recognized when the related performance obligation is satisfied by transferring the control of the promised service to a customer.

Revenue is recognized in an amount that reflects the consideration that we expect to receive in exchange for those services.

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Professional services are time-based arrangements and revenue is recognized as these services are performed.

Fees for services represent less than 1 % of total revenue during the periods presented.

Fees for professional services represent less than 1 % of total revenue during the periods presented.

Cost of Revenue

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These costs are composed of co-located data center costs, third-party cloud hosting costs, integrated third-party PSTN services, personnel-related expenses, amortization of capitalized software development costs and acquired intangible assets, royalty payments, and allocated overhead costs.

Indirect overhead

costs associated with corporate facilities and related depreciation, health care benefits, training, and other employee benefits are allocated to cost of revenue and operating expenses based on applicable headcount.

Indirect overhead costs associated with corporate facilities and related depreciation, health care benefits, training, and other employee benefits are allocated to cost of revenue and operating expenses based on applicable headcount.

Research and Development

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Stock-based compensation expense related to stock awards with only service conditions, including stock options, RSUs, and ESPP, are measured based on the fair value of the awards granted and recognized as an expense on a straight-line basis over the requisite service period.

For RSU’s with service and performance conditions, expense is recognized over the requisite service period if it is probable the performance condition will be achieved.

For RSUs with service and performance conditions, expense is recognized over the requisite service period if it is probable the performance condition will be achieved.

The probability of achievement is assessed quarterly, and the effect of any change in the estimated number of performance-based awards expected to vest is recognized in the period those estimates are revised as a cumulative catch-up adjustment to stock-based compensation expense.

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These estimates involve inherent uncertainties and the application of management’s judgment.

We account for forfeitures as they occur instead of estimating the number of awards expected to be forfeited.

We account for forfeitures as they occur.

Foreign Currency

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Accordingly, monetary assets and liabilities of our foreign subsidiaries are remeasured into U.S.

dollars at the exchange rates in effect at the reporting date, non-monetary assets and liabilities are remeasured at historical rates, and revenue and expenses are remeasured at average exchange rates in effect during each reporting period.

dollars at the exchange rates in effect at the reporting date.

Non-monetary assets and liabilities are remeasured at historical rates, and revenue and expenses are remeasured at average exchange rates in effect during each reporting period.

We use the asset and liability method of accounting for income taxes.

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Accrued interest and penalties are included with the related tax liability.

Net Income Per Share Attributable to Common Stockholders

Net Income Per Share

We calculate our net income per share attributable to Class A and Class B common stock using the two-class method required for companies with participating securities.

We consider our convertible preferred stock and unvested common stock, which includes early exercised stock options, to be participating securities as holders of such securities have non-forfeitable dividend rights in the event of our declaration of a dividend for shares of common stock.

Distributed and undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders.

Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding.

The diluted net income per share attributable to common stockholders is computed by giving effect to all dilutive securities.

Diluted net income per share attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

Basic net income per share is computed by dividing net income by the weighted-average number of shares of our Class A and Class B common stock outstanding.

Diluted net income per share is computed by giving effect to all dilutive securities.

Diluted net income per share is computed by dividing the resulting net income by the weighted-average number of fully diluted common shares outstanding.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which aims to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis to enable investors to develop more decision-useful financial analyses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We adopted the ASU as of February 1, 2024, and applied the amendments in this Update retrospectively to all prior periods presented in these financial statements.

Our adoption resulted in the addition of a note to consolidated financial statements, “14.

Segment Information.”

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which aims to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

Improvements to Income Tax Disclosures (“ASU 2023-09”), which aims to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted.

We are currently evaluating the impact from the adoption of this ASU on our consolidated financial statements.

We have adopted ASU 2023-09 for the fiscal year ended January 31, 2026, using a prospective approach.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

The adoption did not have a material impact on our consolidated financial statements.

Refer to Note 11 to the consolidated financial statements for expanded income tax disclosures.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which introduces a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods.

Early adoption is permitted.

We early adopted ASU 2025-05 as of the third quarter of fiscal year 2026 and elected the practical expedient provided therein.

Adoption of the ASU did not have an impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

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Early adoption is permitted.

We are currently evaluating the impact from the adoption of this ASU on our consolidated financial statements.

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

In September 2025, the Financial Accounting Standards Board issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which aims to modernize financial reporting by updating how entities recognize and disclose costs incurred for software developed for internal use.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years.

Early adoption is permitted.

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

Revenue Recognition

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In some arrangements, a right to consideration for our performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts receivable.

The amount of unbilled accounts receivable included within accounts receivable, net of allowances on the consolidated balance sheets was $ 118.5 million and $ 124.8 million as of January 31, 2025 and 2024, respectively, and the amount of unbilled accounts receivable included within other assets, noncurrent on the consolidated balance sheets was immaterial as of January 31, 2025 and 2024.

The amount of unbilled accounts receivable included within accounts receivable, net of allowances on the consolidated balance sheets, was $ 84.9 million and $ 118.5 million as of January 31, 2026 and 2025, respectively, and the amount of unbilled accounts receivable included within other assets, noncurrent on the consolidated balance sheets was de minimis as of January 31, 2026 and 2025.

Contract liabilities consist of deferred revenue.

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We determine whether costs should be deferred based on our sales compensation plans and if the commissions are incremental and would not have occurred absent the customer contract.

Sales commissions paid upon the initial acquisition of a customer contract are amortized over an estimated period of benefit of three years , which is typically greater than the contractual terms of the customer contracts.

Generally, we do not pay sales commissions upon contract renewal.

Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition.

Sales commissions paid upon the initial acquisition of a customer contract were historically amortized over an estimated period of benefit of three years .

We determine the period of benefit for commissions paid for the acquisition of the initial customer contract by taking into consideration the initial estimated customer life and the technological life of our unified communications and collaboration platform and related significant features.

Amortization of deferred contract acquisition costs is included in sales and marketing expense in the consolidated statements of operations.

Generally, we do not pay sales commissions upon contract renewal.

Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition and is included in sales and marketing expense in the consolidated statements of operations.

We periodically review these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

At the end of fiscal 2026, we completed a re-assessment of the estimated period of benefit for deferred contract acquisition costs and determined that we should increase the amortization period from three years to five years .

The impact of the change in the accounting estimate is reflected in the consolidated balance sheet as of January 31, 2026, and is accounted for prospectively from that date.

The change in amortization period did not impact sales and marketing expenses for the fiscal year ended January 31, 2026.

There were no impairment losses recorded during the periods presented.

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(in thousands)

Commercial paper $ 20,841 $ — $ — $ 20,841

Agency bonds $ 1,095,004 $ 1,032 $ ( 565 ) $ 1,095,471

Corporate and other debt securities 719,145 2,069 ( 419 ) 720,795

government agency securities 5,373,782 11,094 ( 989 ) 5,383,887

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Unrealized losses for securities that have been in an unrealized loss position for less than 12 months were $ 1.5 million and $ 6.2 million as of January 31, 2026 and 2025, respectively.

Unrealized losses for securities that have been in an unrealized loss position for 12 months or longer were immaterial as of January 31, 2025 and $ 4.8 million as of January 31, 2024.

We review the individual securities that have unrealized losses on a regular basis to evaluate whether or not any security has experienced, or is expected to experience, credit losses resulting in the decline in fair value.

Unrealized losses for securities that have been in an unrealized loss position for 12 months or longer were immaterial as of both January 31, 2026 and 2025.

We review the individual securities that have unrealized losses on a regular basis to evaluate whether any security has experienced, or is expected to experience, credit losses resulting in the decline in fair value.

We evaluate, among other factors, whether we have the intention to sell any of these marketable securities and whether it is more likely than not that we will be required to sell any of them before recovery of the amortized cost basis.

We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high-grade credit rating for each of our marketable securities as of the end of each fiscal year.

There were no material realized gains or losses from available-for-sale securities that were reclassified out of accumulated other comprehensive income (loss) for the fiscal years ended January 31, 2025, 2024, and 2023.

There were no material realized gains or losses from available-for-sale securities that were reclassified out of accumulated other comprehensive income for the fiscal years ended January 31, 2026, 2025, and 2024.

The following table presents the contractual maturities of our marketable securities as of January 31, 2026 and 2025:

2 unchanged sentences

Less than one year $ 3,168,258 $ 3,534,014

Due in one to five years 2,908,315 2,520,635

Due in one to three years

3,375,773 2,908,315

Total $ 6,544,031 $ 6,442,329

Strategic Investments

Strategic investments by form and measurement category as of January 31, 2025 were as follows:

Strategic investments by type and measurement category as of January 31, 2026 were as follows:

Measurement Category

11 unchanged sentences

Strategic investments $ 39,730 $ 452,160 $ 99,591 $ 591,481

During the fiscal year ended January 31, 2025, we recorded net unrealized gains of $ 151.4 million on our investments accounted for under the measurement alternative method, mainly driven by changes in the fair value, sales of investments, along with dividends received from these investments.

During the fiscal year ended January 31, 2026, we made a total of $ 70.7 million of strategic investments in equity securities of private companies.

Based on the terms of these privately-held securities, we determined that we do not have a controlling interest or the ability to exercise significant influence over the operating and financial policies of the investees.

Therefore, these investments are currently accounted for under the measurement alternative method.

During the fiscal year ended January 31, 2026, we recorded net unrealized gains of $ 951.7 million on our investments accounted for under the measurement alternative method.

During the fiscal year ended January 31, 2026, we sold a total of $ 75.6 million of strategic investments in equity securities of public companies.

The net gains on sale, which were not material, were recorded through gains on strategic investments, net in the consolidated statements of operations.

Fair Value Measurements

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Cash equivalents 763,410 724,236 39,174 —

Commercial paper 20,841 — 20,841 —

Agency bonds 1,095,471 — 1,095,471 —

Corporate and other debt securities 720,795 — 720,795 —

government agency securities 5,383,887 — 5,383,887 —

1 unchanged sentence

Marketable securities 6,544,031 — 6,544,031 —

Publicly held equity securities included in strategic investments 35,280 35,280 — —

Privately held debt securities included in strategic investments 3,968 — — 3,968

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Treasury bills 17,965 — 17,965 —

Corporate debt securities 2,715 — 2,715 —

government agency securities 20,155 — 20,155 —

23,992 — 23,992 —

Cash equivalents 867,001 825,044 41,957 —

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Marketable securities 6,442,329 — 6,442,329 —

Certificates of deposit included in other assets, noncurrent 254 — 254 —

Publicly held equity securities included in strategic investments 35,280 35,280 — —

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We classify our commercial paper, agency bonds, corporate and other debt securities, U.S.

government agency securities, treasury bills, and certificates of deposit within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security, which may not be actively traded.

We classify our privately held debt securities as Level 3 due to the lack of relevant observable market data over fair value inputs, such as the probability weighting of the various scenarios that can impact settlement of the arrangement.

government agency securities, treasury bills, and certificates of deposit within Level 2 since they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security, which may not be actively traded.

We classify our privately held debt securities as Level 3 due to the lack of relevant observable market data over fair value inputs.

Business Combinations

Workvivo Limited

On April 21, 2023, we acquired 100 % of the issued and outstanding share capital of Workvivo Limited (“Workvivo”), a private technology company that provides an employee experience platform, for an all-cash purchase consideration of $ 221.8 million.

The acquisition extends our platform and offers our customers new ways to keep employees informed, engaged, and connected.

The acquisition has been accounted for as a business combination.

In allocating the purchase consideration, $ 184.7 million was attributed to goodwill, $ 28.0 million to intangible assets (primarily consisting of $ 10.8 million to developed technology and $ 17.0 million to customer relationships), and $ 9.1 million to other net assets acquired.

BrightHire, Inc.

On December 1, 2025, we acquired 100 % of the issued and outstanding share capital of BrightHire, Inc., a private company providing AI-powered interview intelligence and hiring automation, for all-cash purchase consideration of $ 98.0 million.

The acquisition expands Zoom Workplaces’s capabilities in recruiting and candidate engagement.

The acquisition was accounted for as a business combination.

In allocating the purchase consideration for the acquisition, the following table summarizes the amounts attributed to goodwill, identifiable intangible assets, and other net assets acquired:

(in thousands)

Identifiable intangible assets

Other net assets acquired

Total purchase consideration

The goodwill amount represents synergies related to our existing products expected to be realized from the acquisition and assembled workforce.

The associated goodwill is not deductible for tax purposes.

At the date of the acquisition, the developed technology and customer relationships both had an estimated useful life of 5.0 years, and both are amortized using the straight-line method over their respective estimated useful lives.

Amortization of developed technology and customer relationships is recorded within cost of revenue and sales and marketing expense, respectively, within the consolidated statements of operations.

As of January 31, 2025, the developed technology and customer relationships both had a remaining useful life of 3.2 years.

The allocation of the purchase price is based upon a preliminary valuation, and as additional information becomes available, our estimates and assumptions may be subject to refinement within the measurement period, which may be up to one year from the acquisition date.

Uncertain tax positions are initially established in connection with the acquisition as of the acquisition date.

We continue to collect information and reevaluate these estimates and assumptions quarterly.

We will record any adjustments to our preliminary estimates to goodwill, provided that it is within the one-year measurement period.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

(in thousands) (years)

Developed technology 9,000 5.0

Customer relationships

Identifiable intangible assets

Intangible assets are amortized using the straight-line method over their respective estimated useful lives.

Amortization of developed technology is recorded within cost of revenue, and amortization of customer relationships and trade names is recorded within sales and marketing expense in the consolidated statements of operations.

Transaction costs incurred in connection with the acquisition were immaterial.

The results of operations of Workvivo, which are not material, have been included in our consolidated financial statements from the date of the acquisition.

Pro forma and historical results of operations of the company have not been presented, as the results do not have a material effect on any of the periods presented in our consolidated statements of operations.

The results of operations of BrightHire, Inc., which are not material, have been included in our consolidated financial statements from the date of the acquisition.

Pro forma results of operations reflecting the acquisition of BrightHire, Inc.

have not been presented, as the results do not have a material effect on any of the periods presented in our consolidated statements of operations.

Other Acquisitions

During the fiscal year ended January 31, 2026, we also completed other acquisitions that were immaterial and included the results in our consolidated financial statements from the date of the acquisitions.

Balance Sheet Components

5 unchanged sentences

Restricted cash

10,904 12,037

Other 20,509 21,718

1 unchanged sentence

Property and Equipment, Net

Property and equipment consisted of the following:

Property and equipment, net consisted of the following:

As of January 31,

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Income tax receivable, noncurrent

24,276 12,230

Other 11,446 11,772

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Operating Leases

We have entered into various operating lease agreements for office space, with remaining contractual periods of up to five years .

We also enter into equipment operating lease agreements related to our Hardware-as-a-Service (“HaaS”) offering.

We elect to apply the lessor practical expedient per ASC 842 and account for HaaS with customers as a combined performance obligation with the right to access our unified communications and collaboration platform under ASC 606, Revenue from Contracts with Customers .

HaaS was immaterial to our consolidated financial statements.

We entered into various operating lease agreements for office space, with remaining contractual periods of up to five years .

Many of our leases contain one or more options to extend.

21 unchanged sentences

2027 $ 26,585

Thereafter 240

Total operating lease payments $ 62,319

2 unchanged sentences

Goodwill and Intangible Assets

The following table summarizes the changes in the carrying amount of goodwill during the years:

The following table summarizes the changes in the carrying amount of goodwill:

As of January 31,

3 unchanged sentences

Balance, ending of the year $ 400,392 $ 307,295

During the fiscal year ended January 31, 2024, we acquired Workvivo, and recorded goodwill of $ 184.7 million.

See Note 5 for additional information related to the acquisition.

The following table summarizes intangible assets with a finite useful life included within other asset, noncurrent on the consolidated balance sheet:

See Note 5 for additional information regarding acquisitions completed during the fiscal year.

The following table summarizes intangible assets with a finite useful life included within other assets, noncurrent on the consolidated balance sheet:

As of January 31,

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Assembled workforce 7,034 ( 5,947 ) 1,087 7,034 ( 4,191 ) 2,843

1,100 ( 62 ) 1,038 — — —

Total $ 92,227 $ ( 46,230 ) $ 45,997 $ 65,725 $ ( 32,315 ) $ 33,410

5 unchanged sentences

Total amortization expense 45,997

The following table summarizes intangible assets with an indefinite useful life included within other asset, noncurrent on the consolidated balance sheet:

The following table summarizes intangible assets with an indefinite useful life included within other assets, noncurrent on the consolidated balance sheet:

As of January 31,

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In many jurisdictions, non-income-based taxes, such as sales and use tax and other indirect taxes, are assessed on our operations.

Although we are diligent in collecting and remitting such taxes,

there is uncertainty as to what constitutes sufficient presence for a jurisdiction to levy taxes, fees, and surcharges for sales made over the Internet.

Although we are diligent in collecting and remitting such taxes, there is uncertainty as to what constitutes sufficient presence for a jurisdiction to levy taxes, fees, and surcharges for sales made over the Internet.

As of January 31, 2026 and 2025, we recorded sales and other tax liabilities of $ 82.1 million and $ 83.3 million, respectively, of which $ 41.9 million and $ 41.8 million are included in accrued expenses and other current liabilities, respectively, and $ 40.2 million and $ 41.5 million are included in other liabilities, noncurrent, respectively, in our consolidated balance sheets, based on our best estimate of the probable liability for the loss contingency incurred as of those dates.

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Attorney’s Office for the Northern District of California (“NDCA”) and the SEC.

Both subpoenas seek documents and information relating to various security, data protection and privacy matters, including our encryption, and our statements relating thereto, as well as calculation of usage metrics and related public statements.

In addition, the NDCA subpoena seeks information relating to any contacts between our employees and representatives of the Chinese government, and any attempted or successful influence by any foreign government in our policies, procedures, practices, and actions as they relate to users in the United States.

Both subpoenas sought documents and information relating to various security, data protection and privacy matters, including our encryption, and our statements relating thereto, as well as calculation of usage metrics and related public statements.

In addition, the NDCA subpoena sought information relating to any contacts between our employees and representatives of the Chinese government, and any attempted or successful influence by any foreign government in our policies, procedures, practices, and actions as they relate to users in the United States.

We have since received additional subpoenas from EDNY and NDCA seeking related information.

We are fully cooperating with all of these investigations and have conducted our own thorough internal investigation.

These investigations are ongoing, and a negative outcome in any or all of these matters could cause us to incur substantial fines, penalties, or other financial exposure, as well as reputational harm.

During the fiscal year ended January 31, 2025, we recorded an $ 18.0 million accrual with respect to a tentative settlement offer for the SEC matter that remains subject to SEC approval.

We do not know when these matters will be completed, including the SEC matter, which facts we will ultimately discover as a result of the investigations, or what actions the government may or may not take.

We are unable to predict the ultimate outcome of these matters and are unable to reasonably estimate any range of possible loss beyond the $ 18.0 million settlement offer for the SEC matter.

On June 11, 2020 and July 30, 2020, purported shareholder derivative complaints were filed in the United States District Court for the District of Delaware.

The first complaint names as defendants nine of our officers and directors, and the second complaint names eight of our officers and directors.

The lawsuits assert state and federal claims and are based on the same alleged misstatements as the shareholder class action complaint.

The lawsuits accuse our board of directors of failing to exercise reasonable and prudent supervision over our management, policies, practices, and internal controls.

The plaintiffs seek unspecified monetary damages on behalf of us as well as governance reforms.

During the fiscal year ended January 31, 2025, we recorded an $ 18.0 million accrual with respect to a tentative settlement offer for the SEC matter.

On July 30, 2025, the SEC informed us that their investigation has concluded and they do not intend to recommend an enforcement action.

As a result, during the three months ended July 31, 2025, we reversed the $ 18.0 million previously accrued.

The EDNY and NDCA investigations are ongoing, and a negative outcome in any or all of these matters could cause us to incur substantial fines, penalties, or other financial exposure, as well as reputational harm.

We do not know when the EDNY and NDCA matters will be completed, which facts we will ultimately discover as a result of the investigations, or what actions the government may or may not take.

We are unable to predict the ultimate outcome of these matters and are unable to reasonably estimate any range of possible loss for these matters.

On June 11, 2020 and July 30, 2020, purported shareholder derivative complaints were filed in the United States District Court for the District of Delaware against certain of our officers and directors.

The lawsuits asserted state and federal claims and were based on the same alleged misstatements as the shareholder class action complaint.

The lawsuits accused our board of directors of failing to exercise reasonable and prudent supervision over our management, policies, practices, and internal controls.

The plaintiffs sought unspecified monetary damages on behalf of us as well as governance reforms.

On September 25, 2020, the derivative cases were consolidated.

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On December 22, 2023, plaintiff filed her opposition to the motion to dismiss, and on January 26, 2024, defendants filed their reply in support of the motion to dismiss.

On April 1, 2024, the parties notified the court that the parties are engaged in good-faith, material settlement discussions, and requested that the court stay any proceedings and rulings in connection with the pending motion to dismiss while the parties attempt to reach a proposed resolution of this action.

On April 1, 2024, the parties notified the court that the parties were engaged in good-faith, material settlement discussions, and requested that the court stay any proceedings and rulings in connection with the pending motion to dismiss while the parties attempted to reach a proposed resolution of this action.

On April 2, 2024, the Court stayed the case.

On January 14, 2025, the parties executed a Stipulation of Settlement (“Stipulation”) to resolve this matter.

Under the terms of the Stipulation, in exchange for the release and dismissal with prejudice of all claims against all defendants in the matter, Zoom agreed to enact certain corporate governance reforms and to pay plaintiff’s counsel a fee award of up to $ 1.35 million.

The Stipulation and settlement remain subject to preliminary and final approval by the court.

On January 16, 2025, plaintiff filed a motion for preliminary approval of the settlement.

On January 16, 2025, the plaintiff filed a motion for preliminary approval of the settlement.

On February 6, 2025, the court held a hearing on the motion for preliminary approval of the settlement.

We accrued the $ 1.35 million fee award and recorded it as a general and administrative expense in our consolidated statement of operations for the year ended January 31, 2025.

We are vigorously defending ourselves against these lawsuits.

Given the uncertainty of litigation, the preliminary stage of the cases, and the legal standards that must be met for, among other things, class certification and success on the merits,

except as otherwise described above, we cannot estimate the reasonably possible loss or range of loss that may result from these actions.

On April 16, 2025, the court preliminarily approved the settlement.

On June 24, 2025, the plaintiff filed a motion for final approval of the settlement.

On July 31, 2025, the court approved the settlement and awarded plaintiff’s counsel $ 1.35 million in fees.

We accrued the $ 1.35 million fee and recorded it as a general and administrative expense in our consolidated statement of operations for the year ended January 31, 2025.

On April 7, 2020 and April 8, 2020, securities class action complaints were filed against us and two of our officers in the United States District Court for the NDCA.

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On April 6, 2023, the court entered a scheduling order.

On July 17, 2023, the parties entered into a stipulation and agreement of settlement (the “Stipulation”) to resolve this matter.

On July 17, 2023, the parties entered into a stipulation and agreement of settlement (the

“Stipulation”) to resolve this matter.

Under the terms of the stipulation, in exchange for the release and dismissal with prejudice of all claims against all defendants in the matter, we have agreed to pay and/or cause our insurance carriers to pay a total of $ 150.0 million.

The Stipulation and settlement remain subject to preliminary and final approval by the court.

On July 25, 2023, the court entered an order staying further proceedings in the matter pending the filing of a motion for preliminary approval of the settlement.

On October 17, 2023, lead plaintiff filed a motion for preliminary approval of the settlement.

A hearing on the motion for preliminary approval was held on June 13, 2024, but the court has yet to enter a preliminary approval order.

On May 28, 2025, the court preliminarily approved the settlement.

On July 18, 2025, lead plaintiff filed a motion for final approval of the settlement.

On October 9, 2025, the court conducted a fairness hearing and indicated that lead plaintiff’s motion for final approval of the settlement would be granted by a separate order.

On November 10, 2025, the court entered its final approval order and an order finally dismissing the matter with prejudice.

As a result of the settlement, we made net payments of $ 60.0 million ($ 150.0 million for the settlement net of $ 90.0 million covered by insurance) during the year ended January 31, 2024, of which $ 7.5 million had been accrued during the year ended January 31, 2023 and $ 52.5 million was recorded as a general and administrative expense in our consolidated statement of operations for the year ended January 31, 2024.

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In November 2024, our Board of Directors authorized the repurchase of an additional $ 1.2 billion of our outstanding Class A common stock.

In November 2025, our Board of Directors authorized the repurchase of an additional $ 1.0 billion of our outstanding Class A common stock.

Repurchases of our Class A common stock may be effected from time to time, either on the open market (including preset trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws.

38 unchanged sentences

As of January 31, 2026, unrecognized stock-based compensation expense related to outstanding unvested RSUs was $ 1,391.3 million, which is expected to be recognized over a weighted-average period of 2.8 years.

For the fiscal year ended January 31, 2025, we granted 1.7 million RSUs that contain both service and performance vesting criteria.

The ultimate number of shares eligible to vest pursuant to these RSUs range from 0 % to 100 % of the target number of shares depending on achievement of the performance metrics.

The number of RSUs with service and performance vesting conditions included in the granted amount in the table above reflects the shares that would be eligible to vest at 100 % of the target amount.

2019 Employee Stock Purchase Plan

7 unchanged sentences

The first offering period began on April 18, 2019.

During the fiscal years

ended January 31, 2025, 2024, and 2023, 1,066,977 , 921,892 , and 678,279 shares, respectively, of our Class A common stock were purchased under the ESPP.

During the fiscal years ended January 31, 2026, 2025, and 2024, 1,200,743 , 1,066,977 , and 921,892 shares, respectively, of our Class A common stock were purchased under the ESPP.

As of January 31, 2026, unrecognized stock-based compensation expense related to the ESPP was $ 15.5 million, which is expected to be recognized over a weighted-average period of 1.1 years.

10 unchanged sentences

Expected dividend yield — — —

Shares Reserved for Charitable Donations

During fiscal year 2020, our board of directors approved the issuance of 500,000 shares of Class A common stock for the sole purpose of being transferred to nonprofit organizations.

Prior to fiscal year 2026, we transferred a total of 94,844 shares to a donor-advised fund through an unaffiliated nonprofit organization.

For the fiscal year ended January 31, 2026, 240,964 shares of Class A common stock were transferred to the same organization.

As of January 31, 2026, 164,192 shares remain available for future issuance under this authorization.

We recorded a non-cash charge of $ 20.9 million for the fair value of the donated shares, which was recorded in general and administrative expense in the consolidated statements of operations for the fiscal year ended January 31, 2026.

Stock-Based Compensation

The stock-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows:

9 unchanged sentences

Total stock-based compensation expense recorded to net income $ 617,115 $ 754,846 $ 860,093

Restructuring Activities

On February 7, 2023, we announced a restructuring plan (the “Plan”) intended to reduce operating costs and continue advancing our ongoing commitment to profitable growth.

The Plan included a reduction of our then-current workforce by approximately 15 %.

The execution of the Plan was completed as of July 31, 2023, and therefore no restructuring expense was recorded for the year ended January 31, 2025.

For the year ended January 31, 2024, we recorded net restructuring costs of $ 73.0 million, which consisted of $ 54.4 million related to employee transition, severance payments, and employee benefits;

$ 17.3 million related to stock-based compensation awards;

and $ 1.3 million for other related expenses.

The following table summarizes our restructuring expenses that were recorded as an operating expense in the consolidated statement of operations for the year ended January 31, 2024:

Year Ended January 31, 2024

(in thousands)

Cost of revenue $ 7,119

Research and development 19,629

Sales and marketing 32,930

General and administrative 13,315

Total restructuring expenses $ 72,993

There was no restructuring liability as of January 31, 2025 and January 31, 2024.

The components of the net income before the provision for income taxes were as follows:

The components of net income before the provision for income taxes were as follows:

Year Ended January 31,

20 unchanged sentences

$ 522,137 $ 305,346 $ 194,850

The provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows:

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

Year Ended January 31, 2026

(in thousands, except percentages)

Amount Percent

US federal statutory tax rate $ 508,680 21.0 %

State and local income tax, net of federal income tax effect (a)

Foreign tax effects

Other foreign jurisdictions

Effect of cross-border tax laws

Foreign-derived intangible income deduction

( 42,360 ) ( 1.7 )

Other effect of cross-border tax laws

( 2,705 ) ( 0.1 )

Nontaxable or nondeductible items

Stock-based compensation (b)

Research and development tax credits

( 34,347 ) ( 1.4 )

Changes in valuation allowance 5,503 0.2

Changes in unrecognized tax benefits 16,065 0.7

Other 3,905 0.2

Effective tax rate

$ 522,137 21.6 %

(a) The jurisdictions that contribute to the majority of the tax effect in this category are California, Massachusetts, New Jersey, New York, and Virginia.

(b) Includes amounts related to non-deductible stock-based compensation, including non-deductible executive compensation, in addition to excess tax benefits or shortfalls from stock-based compensation.

Out of total stock-based compensation, $ 36.8 million is related to excess tax benefits on current year vested and exercised awards.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

Year Ended January 31,

(in thousands, except percentages)

Tax at federal statutory rate

State taxes 56,336 37,137 13,666

$ 276,270 $ 174,785

56,336 37,137

Foreign rate differential

Non-deductible compensation

15,757 10,639

Stock-based compensation

Permanent items

58,770 96,936

Permanent items

Foreign-derived intangible income deduction

( 56,630 ) ( 63,571 )

Research and development credits

( 49,813 ) ( 39,226 )

Tax uncertainties

Change in valuation allowance

( 7,765 ) ( 14,109 )

Deferred rate change

( 3,993 ) ( 6,803 )

Other ( 1,576 ) ( 10,570 )

Total $ 305,346 $ 194,850 $ 145,565

$ 305,346 $ 194,850

Effective tax rate

23.2 % 23.4 %

Deferred income taxes result from differences in the recognition of amounts for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards.

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The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable.

Based on the available objective evidence during the year ended January 31, 2025, we believe that it is more likely than not that the tax benefits relating to U.S.

losses that are capital in nature and certain state deferred tax assets may not be realized prior to expiration.

Accordingly, we have maintained a valuation allowance against these deferred tax assets and intend to maintain the applicable valuation allowance until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance.

As of January 31, 2025, we had net operating loss carryforwards of approximately $ 1.8 million for federal income tax purposes, and $ 12.5 million for state income tax purposes, which will begin to expire in the year 2033 if unused.

Based on the available objective evidence during the year ended January 31, 2026, we maintained a valuation allowance against certain equity investment deferred tax assets for both U.S.

federal and state income tax purposes and intend to maintain the applicable valuation

allowance until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance.

With respect to California state income taxes, after evaluating all available positive and negative evidence, we concluded that it is more likely than not that the California net deferred tax assets, other than those related to certain equity investments, will be realized.

Accordingly, during the year ended January 31, 2026, we released the valuation allowance previously recorded against the California net deferred tax assets and recognized a non-recurring income tax benefit of $ 24.4 million related to the reversal.

As of January 31, 2026, we had net operating loss carryforwards of approximately $ 30.1 million for federal income tax purposes, which can be carried forward indefinitely.

We also had $ 35.8 million of net operating loss carryforwards for state income tax purposes, which will begin to expire in the year 2036 if unused.

The federal and state net operating loss carryforwards may be subject to significant limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986 and similar provisions under state law.

Such provisions limit the net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes.

We also had certain foreign net operating loss carryforwards of $ 19.6 million, which have an indefinite life.

As of January 31, 2025, we also had research and development credit carryforwards of approximately $ 1.2 million for federal income tax purposes and $ 23.4 million for state income tax purposes.

As of January 31, 2026, we had research and development credit carryforwards of approximately $ 0.2 million for federal income tax purposes and $ 26.0 million for state income tax purposes.

The federal research and development tax credits have a twenty-year carryover period, while the state research and development tax credits carry forward indefinitely.

We indefinitely reinvest earnings from our foreign subsidiaries and therefore no deferred tax liability has been recognized on the basis difference created by such earnings.

We have not provided foreign withholding taxes for any undistributed earnings of our foreign subsidiaries.

We indefinitely reinvest earnings from our foreign subsidiaries;

therefore, no deferred tax liability has been recognized on the basis difference created by such earnings.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows:

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Lapse of Statute of Limitations — — ( 384 )

Acquisitions — — —

Balance, end of year $ 68,157 $ 56,334 $ 41,772

8 unchanged sentences

As of January 31, 2026, all of the years in which net operating losses or tax credits were utilized remain open to examination by the federal and state tax authorities.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations.

Although the timing of the resolution, settlement, and closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months.

As required by the 2017 Tax Cuts and Jobs Act, we started capitalizing research and development expenses incurred beginning in fiscal year 2023.

These expenses are capitalized and amortized over five years for domestic research and fifteen years for international research.

The mandatory capitalization requirement increases our cash tax liabilities but also decreases our effective tax rate due to increasing the foreign-derived intangible income deduction.

The cash flow impact will decrease over time as capitalized research and development expenditures continue to amortize.

Net Income Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders for the periods presented:

The amounts of cash income taxes we paid, net of amounts refunded, were as follows:

Year Ended January 31, 2026

(in thousands)

State and local

Income taxes, net of amounts refunded

The amounts of cash income taxes we paid, net of amounts refunded, during the fiscal years ended January 31, 2025 and 2024 were $ 395.4 million and $ 348.1 million, respectively.

Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share for the periods presented:

Year Ended January 31,

2026 2025 2024

1 unchanged sentence

(in thousands, except share and per share data)

Net income $ 861,755 $ 148,483 $ 538,554 $ 98,908 $ 87,246 $ 16,465

undistributed earnings attributable to participating securities — — — — — ( 7 )

Net income attributable to common stockholders, basic $ 861,755 $ 148,483 $ 538,554 $ 98,908 $ 87,246 $ 16,458

Reallocation of net income attributable to common stockholders ( 5,170 ) 5,170 ( 4,653 ) 4,653 ( 1,205 ) 1,205

Net income attributable to common stockholders, diluted $ 856,585 $ 153,653 $ 533,901 $ 103,561 $ 86,041 $ 17,663

Weighted-average shares used in computing net income per share attributable to common stockholders, basic

Net income, basic

$ 1,679,924 $ 220,224 $ 861,755 $ 148,483 $ 538,554 $ 98,908

Weighted-average shares used in computing net income per share attributable to common stockholders, diluted

Reallocation of net income

( 5,267 ) 5,267 ( 5,170 ) 5,170 ( 4,653 ) 4,653

Net income per share attributable to common stockholders, basic

Net income, diluted

$ 1,674,657 $ 225,491 $ 856,585 $ 153,653 $ 533,901 $ 103,561

Net income per share attributable to common stockholders, diluted

Weighted-average shares used in computing net income per share, basic

265,676,002 34,827,785 262,715,505 45,266,466 254,084,540 46,663,622

The potential shares of common stock that were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows:

Weighted-average shares used in computing net income per share, diluted

270,861,859 36,471,326 267,148,873 47,920,709 258,398,674 50,121,223

Net income per share, basic

$ 6.32 $ 6.32 $ 3.28 $ 3.28 $ 2.12 $ 2.12

Net income per share, diluted

$ 6.18 $ 6.18 $ 3.21 $ 3.21 $ 2.07 $ 2.07

The potential shares of common stock that were excluded from the computation of diluted net income per share for the periods presented because including them would have been anti-dilutive are as follows:

Year Ended January 31,

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Consolidated net income $ 1,900,148 $ 1,010,238 $ 637,462

(1) Excludes stock-based compensation expense and related payroll taxes, acquisition-related expenses, restructuring expenses, and litigation settlements, net

(2) Includes stock-based compensation related payroll taxes, acquisition-related expenses, restructuring expenses, litigation settlements, net, gains on strategic investments, net, and other income, net excluding interest income

(1) Excludes stock-based compensation expense and related payroll taxes, expenses related to charitable donation of common stock, impairment of assets, acquisition-related expenses, restructuring expenses, and litigation settlements, net.

(2) Includes stock-based compensation related payroll taxes, expenses related to charitable donation of common stock, impairment of assets, acquisition-related expenses, restructuring expenses, litigation settlements, net, gains on strategic investments, net, and other income, net excluding interest income.

The following table presents our property and equipment, net of depreciation and amortization, by geographic region:

7 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data