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Financial Assets and Liabilities | 3 Months Ended
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Jan. 31, 2025
Financial Assets And Liabilities [Abstract] |
Financial Assets and Liabilities | Financial Assets and Liabilities Cash Equivalents and Short-term Investments As of January 31, 2025, the balances of our cash equivalents and short-term investments are as follows:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses Less Than 12 Continuous Months |  | Gross Unrealized Losses 12 Continuous Months or Longer |  | Estimated Fair Value(1)
| (in thousands)
Cash equivalents: |  |  |  |  |  |  |  |  |
Money market funds | $ | 672,567 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 672,567 |
U.S. Treasury, agency & T-bills | 10,485 |  |  | 2 |  |  | — |  |  | — |  |  | 10,487 |
Total: | $ | 683,052 |  |  | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 683,054 |
Short-term investments: |  |  |  |  |  |  |  |  |
U.S. Treasury, agency & T-bills | $ | 18,354 |  |  | $ | 21 |  |  | $ | (4) |  |  | $ | — |  |  | $ | 18,371 |
Corporate debt securities | 109,596 |  |  | 314 |  |  | (96) |  |  | — |  |  | 109,814 |
Asset-backed securities | 27,210 |  |  | 112 |  |  | (3) |  |  | (15) |  |  | 27,304 |
Total: | $ | 155,160 |  |  | $ | 447 |  |  | $ | (103) |  |  | $ | (15) |  |  | $ | 155,489 |
(1)See Note 9. Fair Value Measurements for further discussion on fair values. The contractual maturities of our available-for-sale debt securities as of January 31, 2025 are as follows:
| Amortized Cost |  | Fair Value
| (in thousands)
1 year or less | $ | 65,977 |  |  | $ | 66,158 |
1-5 years | 84,803 |  |  | 84,943 |
5-10 years | 2,823 |  |  | 2,833 |
>10 years | 1,557 |  |  | 1,555 |
Total | $ | 155,160 |  |  | $ | 155,489 |
As of October 31, 2024, the balances of our cash equivalents and short-term investments are as follows:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses Less Than 12 Continuous Months |  | Gross Unrealized Losses 12 Continuous Months or Longer |  | Estimated Fair Value(1)
| (in thousands)
Cash equivalents: |  |  |  |  |  |  |  |  |
Money market funds | $ | 869,972 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 869,972 |
U.S. Treasury, agency & T-bills | 7,984 |  |  | 1 |  |  | — |  |  | — |  |  | 7,985 |
Total: | $ | 877,956 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 877,957 |
Short-term investments: |  |  |  |  |  |  |  |  |
U.S. Treasury, agency & T-bills | $ | 19,411 |  |  | $ | 44 |  |  | $ | (6) |  |  | $ | — |  |  | $ | 19,449 |
Corporate debt securities | 105,024 |  |  | 349 |  |  | (115) |  |  | (2) |  |  | 105,256 |
Asset-backed securities | 29,061 |  |  | 130 |  |  | (7) |  |  | (20) |  |  | 29,164 |
Total: | $ | 153,496 |  |  | $ | 523 |  |  | $ | (128) |  |  | $ | (22) |  |  | $ | 153,869 |
(1)See Note 9. Fair Value Measurements for further discussion on fair values. Restricted cash. We include amounts generally described as restricted cash in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown in the condensed consolidated statements of cash flows. Restricted cash is primarily associated with office leases and employee loan programs. The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the condensed consolidated balance sheets and the condensed consolidated statements of cash flows:
| As of
| January 31, 2025 |  | October 31, 2024
| (in thousands)
Cash and cash equivalents | $ | 3,653,880 |  |  | $ | 3,896,532 |
Restricted cash included in prepaid and other current assets | 3,178 |  |  | 1,529 |
Restricted cash included in other long-term assets | 722 |  |  | 668 |
Cash, cash equivalents and restricted cash | $ | 3,657,780 |  |  | $ | 3,898,729 |
Non-marketable equity securities. Our portfolio of non-marketable equity securities consists of strategic investments in privately held companies. During the first quarter of fiscal 2024, we completed the sale of strategic investments in privately-held companies. The gain recognized from the sales was $55.1 million and included in interest and other income (expense), net, in our condensed consolidated statements of income. There were no impairments of non-marketable equity securities during the three months ended January 31, 2025 and 2024. Derivatives We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value and provide qualitative and quantitative disclosures about such derivatives. We operate internationally and are exposed to potentially adverse movements in foreign currency exchange and interest rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month, (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies. The majority of the forward contracts are short-term with maturity of up to 30 months at inception. We do not use foreign currency forward contracts for speculative or trading purposes. We enter into foreign exchange forward contracts with high credit quality financial institutions that are rated "A" or above and to date have not experienced nonperformance by counterparties. In addition, we mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty and anticipate continued performance by all counterparties to such agreements. The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the condensed consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. The cash flow impact upon settlement of the derivative contracts is included in net cash used in operating activities in the condensed consolidated statements of cash flows. Additionally, in order to manage interest rate exposure related to anticipated debt transactions, in the first quarter of fiscal 2025, we entered into treasury rate lock agreements to hedge against unfavorable interest rate changes. The accounting for gains and losses resulting from changes in fair value depends on whether these are designated and qualify for hedge accounting. The assets or liabilities associated with these derivatives are recorded at fair value in other current assets or accrued liabilities in the condensed consolidated balance sheets. The cash flow impact upon settlement of the derivative contracts will be included in net cash used in operating activities in the condensed consolidated statements of cash flows. Cash Flow Hedging Activities Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of up to 30 months or less. Certain forward contracts are rolled over periodically to capture the full length of exposure to our foreign currency risk, which can be up to three years. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. We expect a majority of the hedge balance in other comprehensive income (loss) to be reclassified to the statements of income after the next 12 months. During the three months ended January 31, 2025, we entered into 6-month interest rate hedge contracts to manage the variability in cash flows due to changes in benchmark interest rates related to anticipated debt transactions with 10-year and 30-year terms. The contracts had an aggregate notional amount of $2.0 billion and were designated as cash flow hedges with changes in fair value, net of tax, of $(20.1) million, reported in other comprehensive income (loss) and accounts payable and current liabilities in the condensed consolidated balance sheets as of January 31, 2025. To receive hedge accounting treatment, the hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. These derivatives are designated as cash flow hedges with unrealized gains and losses deferred in other comprehensive income. Upon the issuance of the underlying debt, the contracts will be settled and the accumulated balance in other comprehensive income (loss) will be subsequently amortized to interest expense over the life of the related debt. We expect a majority of the hedge balance in other comprehensive income (loss) to be reclassified to the statements of income after the next 12 months. We did not record any gains or losses related to discontinuation of cash flow hedges during the three months ended January 31, 2025 and 2024. Non-designated Hedging Activities Our foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in interest and other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of the forward contracts for hedging our balance sheet exposure is approximately one month. We also have certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in interest and other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year. The overall goal of our hedging program is to minimize the impact of currency fluctuations on the net income over the fiscal year. The effects of the non-designated foreign currency derivative instruments in the condensed consolidated statements of income are summarized as follows:
| Three Months Ended January 31, |  |
| 2025 |  | 2024 |  |  |  |
| (in thousands)
Gains (losses) recorded in interest and other income (expense), net | $ | (4,421) |  |  | $ | 3,290 |  |  |  |  |
The notional amounts in the table below for foreign currency derivative instruments provide one measure of the transaction volume outstanding:
| As of
| January 31, 2025 |  | October 31, 2024
| (in thousands)
Total gross notional amounts | $ | 1,589,684 |  |  | $ | 1,686,341 |
Net fair value | $ | (12,648) |  |  | $ | 1,819 |
Our exposure to the market gains or losses will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments. The following table represents the condensed consolidated balance sheets location and amount of foreign currency derivative instrument fair values segregated between designated and non-designated hedge instruments:
| Fair values of derivative instruments designated as hedging instruments |  | Fair values of derivative instruments not designated as hedging instruments
| (in thousands)
Balance at January 31, 2025 |  |  |
Other current assets | $ | 6,879 |  |  | $ | 32 |
Accrued liabilities | $ | 19,468 |  |  | $ | 91 |
Balance at October 31, 2024 |  |  |
Other current assets | $ | 8,839 |  |  | $ | 12 |
Accrued liabilities | $ | 6,918 |  |  | $ | 114 |
The following table represents the location of the amount of gains and losses on forward contracts fair values for designated foreign currency hedge instruments, net of tax in the condensed consolidated statements of income:
| Location of gains (losses) recognized in OCI on derivatives |  | Amount of gains (losses) recognized in OCI on derivatives (effective portion) |  | Location of gains (losses) reclassified from OCI |  | Amount of gains (losses) reclassified from OCI (effective portion)
| (in thousands)
Three months ended January 31, 2025 |  |  |  |  |  |  |
Foreign exchange contracts | Revenue |  | $ | 513 |  |  | Revenue |  | $ | (1,002) |
Foreign exchange contracts | Operating expenses |  | (16,891) |  |  | Operating expenses |  | (2,586) |
Total |  |  | $ | (16,378) |  |  |  |  | $ | (3,588) |
Three months ended January 31, 2024 |  |  |  |  |  |  |
Foreign exchange contracts | Revenue |  | $ | (58) |  |  | Revenue |  | $ | (3,263) |
Foreign exchange contracts | Operating expenses |  | 10,668 |  |  | Operating expenses |  | (15) |
Total |  |  | $ | 10,610 |  |  |  |  | $ | (3,278) |

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