Leases

3 Months Ended

Oct. 31, 2025


8. Leases

We lease office facilities under noncancellable 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 16 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 10 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 5 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
(In millions)	October 31, 2025		October 31, 2024
Operating lease cost (1)	$	31	$	29

Variable lease cost	6		5
Sublease income	(2)		(3)
Total net lease cost	$	35	$	31

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

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


	Three Months Ended
(In millions)	October 31, 2025		October 31, 2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	30	$	27
Right-of-use assets obtained in exchange for operating lease liabilities	$	79	$	150

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


	October 31, 2025		July 31, 2025
Weighted-average remaining lease term for operating leases	8.0 years		8.1 years
Weighted-average discount rate for operating leases	4.2	%	3.8	%

Future minimum lease payments under noncancellable operating leases as of October 31, 2025 were as follows:


(In millions)	Operating Leases (1)
Fiscal year ending July 31,
2026 (excluding the three months ended October 31, 2025)	$	63
2027	114
2028	106
2029	110
2030	108
Thereafter	370
Total future minimum lease payments	871
Less imputed interest	(150)
Present value of lease liabilities	$	721

(1)Noncancellable future sublease proceeds as of October 31, 2025 totaled $20 million through July 31, 2030 and $1 million thereafter, and are not included in the table above.

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


(In millions)	October 31, 2025		July 31, 2025

Operating lease right-of-use assets	$	596	$	541

Other current liabilities	$	78	$	69
Operating lease liabilities	643		597
Total operating lease liabilities	$	721	$	666

As of October 31, 2025, we have additional operating leases with total minimum lease payments of $47 million for office facilities that have not yet commenced and therefore are not reflected on the condensed consolidated balance sheets nor in the tables above. These operating leases are expected to commence in fiscal years 2026 and 2027 with lease terms ranging from five to 10 years.