XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.25.3

Income Taxes | 12 Months Ended
--- | ---
Jul. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes |
10. Income Taxes
The provision for income taxes consisted of the following for the periods indicated:
| Twelve Months Ended July 31,
(In millions) | 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | 1,219 |  |  | $ | 984 |  |  | $ | 970 |
State | 237 |  |  | 202 |  |  | 208 |
Foreign | 25 |  |  | 36 |  |  | 86 |
Total current | 1,481 |  |  | 1,222 |  |  | 1,264 |
Deferred: |  |  |  |  |
Federal | (453) |  |  | (523) |  |  | (559) |
State | (70) |  |  | (97) |  |  | (99) |
Foreign | 7 |  |  | (15) |  |  | (1) |
Total deferred | (516) |  |  | (635) |  |  | (659) |
Total provision for income taxes | $ | 965 |  |  | $ | 587 |  |  | $ | 605 |
We recognized excess tax benefits on share-based compensation of $143 million, $183 million, and $32 million in the provision for income taxes for the twelve months ended July 31, 2025, 2024, and 2023, respectively. The sources of income before the provision for income taxes consisted of the following for the periods indicated:
| Twelve Months Ended July 31,
(In millions) | 2025 |  | 2024 |  | 2023
United States | $ | 4,700 |  |  | $ | 3,449 |  |  | $ | 2,798 |
Foreign | 134 |  |  | 101 |  |  | 191 |
Total | $ | 4,834 |  |  | $ | 3,550 |  |  | $ | 2,989 |
Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes were as follows for the periods indicated:
| Twelve Months Ended July 31,
(In millions) | 2025 |  | 2024 |  | 2023
Income before income taxes | $ | 4,834 |  |  | $ | 3,550 |  |  | $ | 2,989 |
Statutory federal income tax | $ | 1,015 |  |  | $ | 746 |  |  | $ | 628 |
State income tax, net of federal benefit | 132 |  |  | 83 |  |  | 86 |
Federal research and experimentation credits | (113) |  |  | (109) |  |  | (106) |
Share-based compensation | 47 |  |  | 43 |  |  | 58 |
Excess tax benefits related to share-based compensation | (120) |  |  | (153) |  |  | (26) |
Effects of non-U.S. operations | 1 |  |  | — |  |  | (28) |
Other, net | 3 |  |  | (23) |  |  | (7) |
Total provision for income taxes | $ | 965 |  |  | $ | 587 |  |  | $ | 605 |
The state income tax line in the table above includes excess tax benefits related to share-based compensation of $23 million, $30 million, and $6 million for the twelve months ended July 31, 2025, 2024, and 2023, respectively. On July 4, 2025, the U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA), which includes significant tax law changes. The OBBBA has multiple effective dates from fiscal 2025 through fiscal 2027. The provisions effective during fiscal 2025 did not have a significant impact on our consolidated financial statements. In the current global tax policy environment, the U.S. and other domestic and foreign governments continue to consider, and in some cases enact, changes in corporate tax laws. As changes occur, we account for finalized legislation in the period of enactment. Material deferred tax assets and liabilities were as follows at the dates indicated:
| July 31,
(In millions) | 2025 |  | 2024
Deferred tax assets: |  |  |
Accruals and reserves not currently deductible | $ | 72 |  |  | $ | 47 |
Capitalized research and development | 1,895 |  |  | 1,321 |
Operating lease liabilities | 173 |  |  | 137 |
Accrued and deferred compensation | 116 |  |  | 132 |
Loss and tax credit carryforwards | 277 |  |  | 204 |
Share-based compensation | 113 |  |  | 117 |
Other, net | 24 |  |  | 20 |
Total gross deferred tax assets | 2,670 |  |  | 1,978 |
Valuation allowance | (290) |  |  | (227) |
Total deferred tax assets | 2,380 |  |  | 1,751 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use assets | 140 |  |  | 105 |
Intangibles | 950 |  |  | 864 |
Property and equipment | 32 |  |  | 38 |
Other, net | 56 |  |  | 49 |
Total deferred tax liabilities | 1,178 |  |  | 1,056 |
Net deferred tax assets | $ | 1,202 |  |  | $ | 695 |
The components of total net deferred tax assets, net of valuation allowances, as shown on our consolidated balance sheets were as follows at the dates indicated:
| July 31,
(In millions) | 2025 |  | 2024
Long-term deferred income tax assets | $ | 1,222 |  |  | $ | 698 |
Long-term deferred income tax liabilities included in other long-term obligations | (20) |  |  | (3) |
Net deferred tax assets | $ | 1,202 |  |  | $ | 695 |
We have provided a valuation allowance on all California net deferred tax assets primarily related to state research and experimentation tax credit carryforwards. We have also provided a valuation allowance on other non-California state operating loss and foreign loss carryforwards. We have provided a valuation allowance on these deferred tax assets as we believe they are unlikely to be realized. We have a valuation allowance of $290 million and $227 million for the twelve months ended July 31, 2025 and July 31, 2024, respectively. The valuation allowance on our net deferred taxes increased by $63 million for the twelve months ended July 31, 2025. The change in the valuation allowance was primarily related to an increase in the allowance for California net deferred tax assets. The valuation allowance on our net deferred taxes decreased by $8 million for the twelve months ended July 31, 2024. The change in the valuation allowance was primarily related to a decrease in the allowance for foreign net operating loss carryforwards, net of an increase in the allowance for California net deferred tax assets. At July 31, 2025, we had federal net operating loss carryforwards of approximately $54 million that will start to expire in fiscal 2032. Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. At July 31, 2025, we had state net operating loss carryforwards of approximately $137 million for which we have recorded a deferred tax asset of $9 million and a valuation allowance of $6 million. The state net operating loss carryforwards will start to expire in fiscal 2028. Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. At July 31, 2025, we had foreign net operating loss carryforwards of approximately $18 million which carry forward indefinitely. We maintain a full valuation allowance with respect to the foreign net operating losses as there is not sufficient evidence of future sources of taxable income required to utilize such carryforwards. At July 31, 2025, we had California research and experimentation credit carryforwards of approximately $426 million. The California research and experimentation credit will carry forward indefinitely. We maintain a full valuation allowance with respect to the California research and experimentation credit carryforwards as there is not sufficient evidence of future sources of taxable income required to utilize such carryforwards.
Unrecognized Tax Benefits
The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated:
| Twelve Months Ended July 31,
(In millions) | 2025 |  | 2024 |  | 2023
Gross unrecognized tax benefits, beginning balance | $ | 327 |  |  | $ | 246 |  |  | $ | 216 |
Increases related to tax positions from prior fiscal years, including acquisitions | 11 |  |  | 36 |  |  | 11 |
Decreases related to tax positions from prior fiscal years | (21) |  |  | (12) |  |  | (16) |
Increases related to tax positions taken during current fiscal year | 91 |  |  | 95 |  |  | 38 |
Settlements with tax authorities | (2) |  |  | (1) |  |  | (2) |
Lapse of statute of limitations | (12) |  |  | (37) |  |  | (1) |
Gross unrecognized tax benefits, ending balance | $ | 394 |  |  | $ | 327 |  |  | $ | 246 |
The total amount of our unrecognized tax benefits at July 31, 2025 was $394 million. If we were to recognize these net benefits, our income tax expense would reflect a favorable net impact of $276 million. We do not believe that it is reasonably possible that there will be a significant increase or decrease in unrecognized tax benefits over the next 12 months. We file U.S. federal, U.S. state, and foreign tax returns. Our major tax jurisdiction is the U.S. federal jurisdiction. For U.S. federal tax returns, we are no longer subject to tax examinations for years prior to fiscal 2022 except for fiscal 2018 and fiscal 2016. We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. Amounts accrued at July 31, 2025 and July 31, 2024 for the payment of interest and penalties were not material. The amounts of interest and penalties that we recognized during the twelve months ended July 31, 2025, 2024, and 2023, were also not material. We offset a $61 million and $66 million long-term liability for uncertain tax positions against our long-term income tax receivable at July 31, 2025 and July 31, 2024, respectively. The long-term income tax receivable for both periods was primarily related to the government’s approval of a method of accounting change request for fiscal 2018.

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