XML 45 R28.htm IDEA: XBRL DOCUMENT
v3.25.2

Income Taxes | 12 Months Ended
--- | ---
Jul. 26, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes (a)Provision for Income Taxes The provision for income taxes consists of the following (in millions):
Years Ended | July 26, 2025 |  | July 27, 2024 |  | July 29, 2023
Federal: |  |  |  |  |
Current | $ | 956 |  |  | $ | 1,939 |  |  | $ | 3,754 |
Deferred | (838) |  |  | (883) |  |  | (1,955) |
| 118 |  |  | 1,056 |  |  | 1,799 |
State: |  |  |  |  |
Current | 431 |  |  | 388 |  |  | 623 |
Deferred | (250) |  |  | 11 |  |  | (175) |
| 181 |  |  | 399 |  |  | 448 |
Foreign: |  |  |  |  |
Current | 665 |  |  | 559 |  |  | 412 |
Deferred | (44) |  |  | (100) |  |  | 46 |
| 621 |  |  | 459 |  |  | 458 |
Total | $ | 920 |  |  | $ | 1,914 |  |  | $ | 2,705 |
Income before provision for income taxes consists of the following (in millions):
Years Ended | July 26, 2025 |  | July 27, 2024 |  | July 29, 2023
United States | $ | 9,500 |  |  | $ | 10,790 |  |  | $ | 14,074 |
International | 1,600 |  |  | 1,444 |  |  | 1,244 |
Total | $ | 11,100 |  |  | $ | 12,234 |  |  | $ | 15,318 |
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consist of the following:
Years Ended | July 26, 2025 |  | July 27, 2024 |  | July 29, 2023
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Effect of: |  |  |  |  |
State taxes, net of federal tax benefit | 1.3 |  |  | 2.8 |  |  | 2.4 |
Foreign income at other than U.S. rates | 0.7 |  |  | (0.3) |  |  | (0.1) |
Tax credits | (2.7) |  |  | (2.4) |  |  | (0.3) |
Foreign-derived intangible income deduction | (6.0) |  |  | (5.5) |  |  | (5.8) |
Stock-based compensation | 0.7 |  |  | 0.7 |  |  | 1.1 |
Impact of the Tax Act | (6.5) |  |  | — |  |  | — |
Other, net | (0.2) |  |  | (0.7) |  |  | (0.6) |
Total | 8.3 | % |  | 15.6 | % |  | 17.7 | %
On August 26, 2024, the U.S. Tax Court issued an opinion in Varian Medical Systems, Inc. v. Commissioner. The opinion related to the U.S. taxation of deemed foreign dividends in the transition year of the Tax Act (our fiscal 2018). While we were not a party to the case, the opinion resulted in a change to our tax position. As such, we recorded a tax benefit of $720 million as a reduction to the provision for income taxes in fiscal 2025 due to this U.S. Tax Court opinion. During fiscal 2023, we resolved certain items with the Internal Revenue Service (IRS) related to the audit of our federal income tax returns for the fiscal years ended July 26, 2014 through July 30, 2016. As a result of this resolution, we recognized a net benefit to the provision for income taxes of $145 million, which included a reduction of interest expense of $53 million. During fiscal 2024, we resolved all remaining items with the IRS related to the audit of our federal income tax returns for the fiscal years ended July 26, 2014 through July 30, 2016. As a result of this resolution, we recognized a net benefit to the provision for income taxes of $55 million, which included a reduction of interest expense of $18 million. During the fourth quarter of fiscal 2025, we changed our assertion regarding our intent to indefinitely reinvest $6.5 billion of undistributed earnings for certain foreign subsidiaries and determined that those earnings are no longer considered permanently reinvested. The deferred income tax impact of this change is not material. Unrecognized Tax Benefits The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in millions):
Years Ended | July 26, 2025 |  | July 27, 2024 |  | July 29, 2023
Beginning balance | $ | 2,156 |  |  | $ | 2,137 |  |  | $ | 3,101 |
Additions based on tax positions related to the current year | 283 |  |  | 205 |  |  | 159 |
Additions for tax positions of prior years | 81 |  |  | 256 |  |  | 261 |
Reductions for tax positions of prior years | (68) |  |  | (344) |  |  | (265) |
Settlements | (75) |  |  | (53) |  |  | (1,063) |
Lapse of statute of limitations | (40) |  |  | (45) |  |  | (56) |
Ending balance | $ | 2,337 |  |  | $ | 2,156 |  |  | $ | 2,137 |
As a result of the resolution of the IRS audit of our federal tax income tax returns for the fiscal years ended July 26, 2014 through July 30, 2016, the amount of gross unrecognized tax benefits was reduced by approximately $1.1 billion in fiscal 2023 and $245 million in fiscal 2024. As of July 26, 2025, $1.6 billion of the unrecognized tax benefits would affect the effective tax rate if realized. We recognized net interest expense of $77 million, $21 million and $27 million during fiscal 2025, 2024, and 2023, respectively. Our net penalty expense for fiscal 2025, 2024, and 2023 was not material. Our total accrual for interest and penalties was $497 million, $401 million, and $523 million as of the end of fiscal 2025, 2024, and 2023, respectively. We are no longer subject to U.S. federal income tax audit for returns covering tax years through fiscal 2016. We are no longer subject to foreign or state income tax audits for returns covering tax years through fiscal 2003 and fiscal 2008, respectively. We regularly engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. We believe it is reasonably possible that certain federal, foreign, and state tax matters may be concluded in the next 12 months. Specific positions that may be resolved include issues involving transfer pricing and various other matters. We estimate that the unrecognized tax benefits at July 26, 2025 could be reduced by approximately $250 million in the next 12 months. (b)Deferred Tax Assets and Liabilities The following table presents the breakdown for net deferred tax assets (in millions):
| July 26, 2025 |  | July 27, 2024
Deferred tax assets | $ | 7,356 |  |  | $ | 6,262 |
Deferred tax liabilities | (75) |  |  | (76) |
Total net deferred tax assets | $ | 7,281 |  |  | $ | 6,186 |
The following table presents the components of the deferred tax assets and liabilities (in millions):
| July 26, 2025 |  | July 27, 2024
ASSETS |  |  |
Inventory write-downs and capitalization | $ | 532 |  |  | $ | 530 |
Deferred foreign income | 221 |  |  | 277 |
IPR&D and purchased intangible assets | 961 |  |  | 1,039 |
Depreciation | 242 |  |  | 184 |
Deferred revenue | 1,933 |  |  | 2,034 |
Credits and net operating loss carryforwards | 1,350 |  |  | 1,863 |
Share-based compensation expense | 319 |  |  | 297 |
Accrued compensation | 175 |  |  | 275 |
Lease liabilities | 379 |  |  | 308 |
Capitalized research expenditures | 4,182 |  |  | 3,030 |
Other | 678 |  |  | 559 |
Gross deferred tax assets | 10,972 |  |  | 10,396 |
Valuation allowance | (910) |  |  | (1,024) |
Total deferred tax assets | 10,062 |  |  | 9,372 |
LIABILITIES |  |  |
Goodwill and purchased intangible assets | (2,288) |  |  | (2,808) |
ROU lease assets | (315) |  |  | (259) |
Other | (178) |  |  | (119) |
Total deferred tax liabilities | (2,781) |  |  | (3,186) |
Total net deferred tax assets | $ | 7,281 |  |  | $ | 6,186 |
The changes in the valuation allowance for deferred tax assets are summarized as follows (in millions):
|  | July 26, 2025 |  | July 27, 2024 |  | July 29, 2023
Balance at beginning of fiscal year |  | $ | 1,024 |  |  | $ | 754 |  |  | $ | 834 |
Additions |  | 33 |  |  | 148 |  |  | 35 |
Additions from Splunk |  | — |  |  | 147 |  |  | — |
Deductions |  | (4) |  |  | (4) |  |  | (18) |
Write-offs |  | (145) |  |  | (20) |  |  | (93) |
Foreign exchange and other |  | 2 |  |  | (1) |  |  | (4) |
Balance at end of fiscal year |  | $ | 910 |  |  | $ | 1,024 |  |  | $ | 754 |
As of July 26, 2025, our federal, state, and foreign net operating loss carryforwards before valuation allowance for income tax purposes were $284 million, $2.1 billion, and $533 million, respectively. A significant amount of the net operating loss carryforwards relates to acquisitions and, as a result, is limited in the amount that can be recognized in any one year. If not utilized, the federal, state, and foreign net operating loss carryforwards will begin to expire in fiscal 2026. We have provided a valuation allowance of $10 million and $96 million for deferred tax assets related to state and foreign net operating losses respectively that are not expected to be realized. As of July 26, 2025, our federal, state, and foreign tax credit carryforwards for income tax purposes before valuation allowance were approximately $7 million, $1.8 billion, and $8 million, respectively. The federal tax credit carryforwards will begin to expire in fiscal 2027. The majority of state and foreign tax credits can be carried forward indefinitely. We have provided a valuation allowance of $752 million for deferred tax assets related to state and foreign tax credits carryforwards that are not expected to be realized.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration