INCOME TAXES

12 Months Ended

Jan. 31, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our loss before provision for income taxes for fiscal 2026, 2025 and 2024 consisted of the following (in thousands):

	Year Ended January 31,
	2026		2025		2024
Domestic	$	(301,626)	$	(383,904)	$	(406,151)
Foreign	21,915		102,297		73,317
Loss before provision for income taxes	$	(279,711)	$	(281,607)	$	(332,834)

The components of provision for income taxes for fiscal 2026, 2025 and 2024 consisted of the following (in thousands):

	Year Ended January 31,
	2026		2025		2024
Current:
Federal	$	—	$	—	$	—
State	225		178		150
Foreign	192,270		4,021		5,168
Total current	192,495		4,199		5,318
Deferred:
Federal	(4,666)		—		—
State	(703)		—		—
Foreign	(16,102)		2,635		541
Total deferred	(21,471)		2,635		541
Total provision for income taxes	$	171,024	$	6,834	$	5,859

Upon adoption of ASU 2023-09, as described in Note 2, Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to our provision for income taxes for the year ended January 31, 2026 was as follows (in thousands, except for percentages):

	Year Ended January 31,
	2026
	Amount		%
Benefit from income taxes at U.S. federal statutory rate	$	(58,739)	21.0	%
Domestic state and local income taxes, net of federal effect(1)	(478)		0.2	%
Foreign
Israel
ITA tax settlement(2)	180,884		(64.7)	%
Reversal of deferred tax liability from acquired intangibles	(4,968)		1.8	%
Change in valuation allowance	(19,167)		6.9	%
Reversals of net operating losses in connection with ITA Agreement	15,059		(5.4)	%
Other	(587)		0.2	%
Other foreign jurisdictions	344		(0.1)	%
Cross-border tax laws
Foreign branches subject to U.S. tax	2,941		(1.1)	%
Foreign tax deduction	(36,987)		13.2	%
Tax credits
Research and development credits	(3,223)		1.2	%
Change in valuation allowance	65,998		(23.6)	%
Nontaxable and nondeductible items, net
Stock-based compensation	23,091		(8.3)	%
Intercompany intellectual property sale	4,536		(1.6)	%
Other	1,346		(0.5)	%
Change in unrecognized tax benefits	806		(0.3)	%
Other adjustments	168		(0.1)	%
Total	$	171,024	(61.1)	%

(1) State taxes in Texas made up the majority (greater than 50 percent) of the tax effect in this category.

(2) Tax settlement with the ITA regarding the Assessment Agreement related to transfer pricing between the U.S. and Israel

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended January 31, 2025 and 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):

	Year Ended January 31,
	2025		2024
Benefit from income taxes at U.S. federal statutory rate	$	(59,137)	$	(69,895)
State taxes, net of federal benefit	178		150
Foreign tax rate differential	30,950		23,179
Stock-based compensation	6,689		12,367
Non-deductible expenses	468		1,390
Research and development credits	(2,987)		(2,251)
Change in valuation allowance	30,584		40,525
Other	89		394
Total provision for (benefit from) income taxes	$	6,834	$	5,859

Significant components of our net deferred tax assets and liabilities as of January 31, 2026 and 2025 consisted of the following (in thousands):

	As of January 31,
	2026		2025
Deferred tax assets:
Net operating loss carryforwards	$	246,593	$	207,838
Research and development expenses	172,338		148,728
Deferred revenue	49,987		42,537
Accruals and reserves	10,340		11,042
Operating lease liabilities	4,427		5,349
Stock-based compensation	20,032		17,388
Property and equipment	58		—
Other	16,016		11,495
Gross deferred tax assets	519,791		444,377
Valuation allowance	(437,044)		(381,956)
Total deferred tax assets	82,747		62,421
Deferred tax liabilities:
Acquired intangibles, property and equipment	(30,941)		(24,373)
Deferred contract acquisition costs	(38,776)		(36,313)
Operating lease right-of-use assets	(3,238)		(4,602)
Other	—		(563)
Total deferred tax liabilities	(72,955)		(65,851)
Net deferred tax liabilities	$	9,792	$	(3,430)

Based upon available objective evidence, we believe it is more likely than not that the U.S. deferred tax assets will not be fully realizable. Accordingly, we have established a valuation allowance for the U.S. deferred tax assets. In connection with the Agreement, further discussed below, we also released our Israel valuation allowance. As of January 31, 2026 and 2025, we had a valuation allowance of $437.0 million and $382.0 million, respectively, against our deferred tax assets. During fiscal 2026 and 2025, total valuation allowance increased by $55.1 million and $41.0 million, respectively, primarily due to additional net operating losses and capitalized research and development.

As of January 31, 2026, we had federal net operating loss carryforwards of $978.0 million, a portion of which will begin to expire in 2031, and state net operating loss carryforwards of $477.9 million, which will begin to expire in 2027. We had immaterial foreign net operating loss carryforwards.

In addition, we had federal research and development credit carryforwards of $13.1 million, which will begin to expire in 2037, and state research and development credit carryforwards of $5.4 million, which do not expire.

Federal and state tax laws impose substantial restrictions on the utilization of the net operating loss carryforwards and tax credit carryforwards in the event of an ownership change as defined in Section 382 of the Internal Revenue Code of 1986, as amended. Accordingly, our ability to utilize these carryforwards may be limited as a result of such ownership change. Such a limitation could result in the expiration of carryforwards before they are utilized. The carryforwards are currently subject to a valuation allowance.

Foreign withholding taxes have not been provided for the cumulative undistributed earnings of certain foreign subsidiaries of ours as of January 31, 2026 and 2025 due to our intention to permanently reinvest such earnings. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Our tax years generally remain open and subject to examination by federal, state, or foreign tax authorities, with the exception of Israel which was settled through fiscal 2025 per our Agreement with the ITA. We are currently under examination by the Indian Tax Authorities for the 2022 through 2024 tax years. We are not currently under audit in any other tax jurisdictions.

The changes in the gross amount of unrecognized tax benefits consisted of the following (in thousands):

	As of January 31,
	2026		2025		2024
Balance at beginning of year	$	4,000	$	2,197	$	1,013
Gross increases for tax positions of current year	1,405		1,540		1,027
Gross increases for tax positions of prior year	—		263		157
Balance at end of year	$	5,405	$	4,000	$	2,197

Upon adoption of ASU 2023-09, as described in Note 2, Summary of Significant Accounting Policies, cash paid for income taxes, net of refunds, during the year ended January 31, 2026 was as follows (in thousands):

	As of January 31,
	2026
Federal	$	—
State and Local	147
Foreign
India	2,053
Czech	1,571
Singapore	896
Australia	477
Netherlands	421
Other foreign jurisdictions	82
Total	$	5,647

We recognize interests and penalties related to income tax matters as a component of income tax expense. During fiscal 2026, we recorded $0.9 million of interest expense related to the Agreement and no penalties were recorded.

The Organization for Economic Co-Operation and Development (OECD) introduced Base Erosion and Profit Shifting (BEPS) Pillar Two rules that impose a global minimum tax rate of 15% on multi-national corporations. Numerous countries have enacted or substantively enacted legislation to implement these rules. While we did not have an impact from Pillar Two on our tax provision or effective tax rate as of the year ended January 31, 2026, we continue to monitor evolving Pillar Two and other tax legislation in the jurisdictions in which we operate.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (OBBBA), which restores the immediate expensing of domestic research and experimental (R&E) expenditures and contains other provisions impacting U.S. tax law. The OBBBA does not have a material effect on our consolidated financial statements.

On January 8, 2026, we entered into an Assessment Agreement with the ITA covering various transfer pricing matters for intercompany transactions between us and our Israeli subsidiary, including the valuation and taxation of the intergroup utilization of our Israeli subsidiary’s intellectual property. The Agreement covers our fiscal years ended January 31, 2021 through January 31, 2025, and fully and finally resolves all related Israeli disputed income tax matters between us, our affiliates, and the ITA. This settlement with the ITA includes certain principles established in the bilateral Advanced Pricing Agreement (APA) process between us, the Internal Revenue Service and the ITA, through which we have been negotiating since fiscal year 2022, and provides a final tax determination on this matter for Israeli tax purposes.

We recorded $180.0 million related to this matter with the ITA during fiscal 2026. During the three months ended April 30, 2025, in the context of the APA negotiations, we discussed a framework for a final settlement and resolution of this matter with the ITA. As a result of such discussions, we reassessed our uncertain tax position in respect of the APA matter, and based on this reassessment, incurred a tax expense of $136.0 million in the three months ended April 30, 2025. In connection with the Agreement, which represents a full and final resolution of this matter and all issues relating to the valuation of our Israeli subsidiary’s intellectual property, we have recorded an additional $14.0 million tax expense in the three months ending January 31, 2026. In regard to our acquisition in September 2025 of Prompt and its wholly owned Israeli subsidiary, we recorded an additional $30.0 million tax expense for the fiscal year ending January 31, 2026, as the Agreement also provides for the tax impact of the alignment of Prompt’s intellectual property into our structure and fully resolves any and all issues relating to the valuation of Prompt’s intellectual property. Additionally, we accrued $0.9 million for interest related to the ITA liability arising from the Agreement during the three months ending January 31, 2026 which is reflected in income tax expense, consistent with our policy election discussed above.

The Agreement provides for installment payments through our fiscal year 2031, with unpaid balances accruing interest at 7.0% per annum. We have the option to extend the payment schedule for up to two additional years. The scheduled payments are fixed in Israel New Shekel and have been converted to the following U.S. dollar amounts based on the spot rate as of the period end.

Payment Timing	Amount (ILS, in millions)		Amount (USD, in millions)*
First Quarter ending April 30, 2026	ILS	95.3	$	30.7
Fourth Quarter ending January 31, 2027	31.8		10.2
Fourth Quarter ending January 31, 2028	47.6		15.3
Fourth Quarter ending January 31, 2029	63.5		20.4
Fourth Quarter ending January 31, 2030	63.5		20.4
Fourth Quarter ending January 31, 2031 (Final Payment)**	428.8		138.0
Total	ILS	730.5	$	235.0

* The U.S. dollar equivalent amounts indicated above are based upon the spot rate as of the period end.

** Final payment is inclusive of accrued interest and includes an option to extend until fiscal 2033. If the extension is exercised, the final payment in the fourth quarter of fiscal 2033 would be 491.1 million Israeli New Shekels ($158.1 million).

In the event of a change in control, 792.7 million Israel New Shekel, or $255.1 million, less cumulative payments made, which represents all unpaid amounts, plus interest that would have accrued through the end of the seventh year, would accelerate in accordance with the terms of the Agreement.