Cash Equivalents and Investments

3 Months Ended

Apr. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Cash Equivalents and Short-term Investments

In estimating fair value, the Company uses a three-tier fair value hierarchy as follows:

•Level 1 — Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

•Level 2 — Valuations based on other inputs that are directly or indirectly observable in the marketplace.

•Level 3 — Valuations based on unobservable inputs that are supported by little or no market activity.

The following tables present the amortized cost, unrealized gain (loss) and estimated fair value of cash equivalents and short-term investments:


	As of April 30, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
	(dollars in millions)
Level 1:
Cash equivalents:
Money market funds	$	12	$	—	$	—	$	12



Total cash equivalents	12		—		—		12
Level 2:
Short-term investments (Available-for-sale):


U.S. treasury securities	2,155		1		(12)		2,144
Corporate debt securities	102		—		(1)		101
Total short-term investments	2,257		1		(13)		2,245
Total	$	2,269	$	1	$	(13)	$	2,257


	As of January 31, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
	(dollars in millions)
Level 1:
Cash equivalents:
Money market funds	$	133	$	—	$	—	$	133



Total cash equivalents	133		—		—		133
Level 2:
Short-term investments (Available-for-sale):


U.S. treasury securities	2,207		—		(22)		2,185
Corporate debt securities	133		—		(2)		131
Total short-term investments	2,340		—		(24)		2,316
Total	$	2,473	$	—	$	(24)	$	2,449

The following table presents the contractual maturities of the Company’s short-term investments:


	As of April 30, 2023
	Amortized Cost		Estimated Fair Value
	(dollars in millions)
Due within one year	$	1,960	$	1,949
Due between one to five years	297		296
Total	$	2,257	$	2,245

Interest receivable of $15 million and $10 million is included in Prepaid expenses and other current assets on the condensed consolidated balance sheets as of April 30, 2023 and January 31, 2023, respectively.

The following table presents the fair values and unrealized losses related to the Company’s investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of April 30, 2023:


	Less Than 12 Months				More Than 12 Months				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(dollars in millions)
U.S. treasury securities	$	1,212	$	(4)	$	679	$	(8)	$	1,891	$	(12)
Corporate debt securities	—		—		83		(1)		83		(1)
Total	$	1,212	$	(4)	$	762	$	(9)	$	1,974	$	(13)

The Company had 139 and 159 short-term investments in unrealized loss positions as of April 30, 2023 and January 31, 2023, respectively.

For available-for-sale debt securities that have unrealized losses, the Company evaluates whether (i) the Company has the intention to sell any of these investments, (ii) it is not more likely than not that the Company will be required to sell any of these available-for-sale debt securities before recovery of the entire amortized cost basis and (iii) the decline in the fair value of the investment is due to credit or non-credit related factors. There were no material credit or non-credit related impairments for short-term investments as of April 30, 2023 and January 31, 2023.

Strategic Investments

Strategic investments primarily include equity investments in privately-held companies, which do not have a readily determinable fair value. As of April 30, 2023 and January 31, 2023, the balance of strategic investments was $26 million and $25 million, respectively.