Leases

6 Months Ended

Jan. 31, 2025


8. Leases

We lease office facilities under non-cancellable operating lease arrangements. Our facility leases generally provide for periodic rent increases and may contain escalation clauses and renewal options. Our leases have remaining lease terms of up to 17 years, which include options to extend that are reasonably certain of being exercised. Some of our leases include one or more options to extend the lease for up to 7 years per option, which we are not reasonably certain to exercise. The options to extend are generally at rates to be determined in accordance with the agreements. Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised.

We sublease certain office facilities to third parties. These subleases have remaining lease terms of up to 6 years, one of which includes an option to extend the sublease for up to 5 years.

The components of lease expense were as follows:


	Three Months Ended				Six Months Ended
(In millions)	January 31, 2025		January 31, 2024		January 31, 2025		January 31, 2024
Operating lease cost (1)	$	25	$	26	$	54	$	52

Variable lease cost	5		6		10		12
Sublease income	(3)		(3)		(6)		(6)
Total net lease cost	$	27	$	29	$	58	$	58

(1) Includes short-term leases, which were not material for each of the three and six months ended January 31, 2025 and 2024.

Supplemental cash flow information related to operating leases was as follows:


	Six Months Ended
(In millions)	January 31, 2025		January 31, 2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	57	$	42
Right-of-use assets obtained in exchange for operating lease liabilities	$	151	$	22

Other information related to operating leases was as follows at the dates indicated:


	January 31, 2025		July 31, 2024
Weighted-average remaining lease term for operating leases	8.2 years		7.7 years
Weighted-average discount rate for operating leases	3.7	%	3.3	%

Future minimum lease payments under non-cancellable operating leases as of January 31, 2025 were as follows:


(In millions)	Operating Leases (1)
Fiscal year ending July 31,
2025 (excluding the six months ended January 31, 2025)	$	29
2026	97
2027	95
2028	88
2029	91
Thereafter	346
Total future minimum lease payments	746
Less imputed interest	(114)
Present value of lease liabilities	$	632

(1) Non-cancellable sublease proceeds for the remainder of the fiscal year ending July 31, 2025 and the fiscal years ending July 31, 2026, 2027, 2028, 2029, and thereafter of $2 million, $4 million, $4 million, $3 million, $3 million, and $3 million, respectively, are not included in the table above.

Supplemental balance sheet information related to operating leases was as follows at the dates indicated:


(In millions)	January 31, 2025		July 31, 2024

Operating lease right-of-use assets	$	518	$	411

Other current liabilities	$	59	$	71
Operating lease liabilities	573		458
Total operating lease liabilities	$	632	$	529

As of January 31, 2025, we have an additional operating lease of $98 million for office facilities that has not yet commenced and therefore is not reflected on the condensed consolidated balance sheets nor in the tables above. This lease is expected to commence in fiscal year 2025 with a lease term of 10 years.