Income Taxes

12 Months Ended

Jan. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 – Income Taxes

U.S. and foreign components of consolidated loss before income taxes were as follows (in thousands):

	Year Ended January 31,
	2025		2024		2023
Domestic	$	(1,223,181)	$	(356,015)	$	(296,975)
Foreign	74,729		28,546		27,825
Loss before income taxes	$	(1,148,452)	$	(327,469)	$	(269,150)

The provision for income taxes was as follows (in thousands):

	Year Ended January 31,
	2025		2024		2023
Current:
Federal	$	(2,330)	$	2,336	$	—
State	(1,315)		2,818		189
Foreign	8,772		19,598		3,959
Total current provision for income taxes	5,127		24,752		4,148
Deferred:
Federal	—		—		—
State	—		—		—
Foreign	1,241		1,937		4,448
Total deferred provision for income taxes	1,241		1,937		4,448
Total provision for income taxes	$	6,368	$	26,689	$	8,596

The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	Year Ended January 31,
	2025		2024		2023
Provision at federal statutory rate	21.0	%	21.0	%	21.0	%
State, net of federal benefit	3.2		—		3.5
Stock-based compensation	10.4		0.3		(0.3)
Impact of foreign operations	2.9		(5.1)		(2.8)
Change in valuation allowance	(42.8)		(14.5)		(27.8)
Research and development credits	4.9		3.9		4.0
Non-deductible expenses	—		(12.8)		—
Other adjustments	(0.2)		(1.0)		(0.8)
Effective income tax rate	(0.6)	%	(8.2)	%	(3.2)	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):

	January 31,
	2025		2024
Deferred tax assets:
Net operating loss carryforwards	$	330,908	$	131,449
Capitalized research and development expenditures	208,690		74,843
Research and development credit carryforward	117,837		52,152
Deferred revenue	151,326		119,531
Stock-based compensation	68,587		3,716
Operating lease liabilities	4,863		7,063
Other	26,505		9,578
Total deferred tax assets	908,716		398,332
Less: valuation allowance	(863,039)		(371,027)
Total deferred tax assets, net	45,677		27,305
Deferred tax liabilities:
State income taxes	(28,936)		(13,493)
Capitalized internal-use software	(5,472)		(3,769)
ROU assets	(4,219)		(6,402)
Other	(18,394)		(13,744)
Total deferred tax liabilities	(57,021)		(37,408)
Net deferred tax assets (liabilities)	$	(11,344)	$	(10,103)

The valuation allowance increased by $492.0 million for the fiscal year ended January 31, 2025. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, expected near-term future losses, and the absence of taxable income in prior carryback years. The Company expects to maintain a valuation allowance until circumstances change.

As of January 31, 2025, the Company had U.S. federal net operating loss carryforwards of approximately $1,346.1 million, state net operating loss carryforwards of approximately $626.2 million, and foreign net operating loss carryforwards of approximately $6.0 million. A portion of the U.S. federal net operating loss carryforwards will begin to expire in fiscal 2037. The state net operating loss carryforwards will begin to expire in fiscal 2028. The foreign net operating loss carryforwards do not expire.

As of January 31, 2025, the Company had U.S. federal research and development tax credit carryforwards of approximately $88.0 million, which if not utilized, will begin to expire in fiscal 2036. As of January 31, 2025, the Company had state research and development tax credit carryforwards of approximately $59.3 million. The state credit carryforwards do not expire.

Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the “ownership change” limitation provided by Section 382 and 383 of the Internal Revenue Code (“IRC”) of 1986, as amended, and other similar state provision. Any future annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

	January 31,
	2025		2024		2023
Unrecognized tax benefits at beginning of period	$	31,263	$	11,206	$	7,811
Decreases related to prior year tax positions	(567)		—		—
Increases related to prior year tax positions	—		63		463
Increases related to current year tax positions	15,928		19,994		2,932
Unrecognized tax benefits at end of period	$	46,624	$	31,263	$	11,206

In the fiscal year ended January 31, 2025, the Company recorded an increase in its unrecognized tax benefits related to US federal and California research tax credits. Certain research tax credits have not been utilized on any tax return and currently have no impact on the Company’s tax expense due to the Company’s operating losses and the related valuation allowances.

The Company’s policy is to record interest and penalties related to uncertain tax positions within the provision for income taxes. To date, the combined amounts of accrued interest and penalties included in long-term income taxes payable related to tax positions taken on the Company’s tax returns were not material.

The Company files income tax returns with the U.S. federal government and certain state and foreign jurisdictions. The Company’s tax returns remain open to examination for the periods ended January 31, 2016 to January 31, 2025.