The estimation of the fair value of market-based restricted stock units, stock options and Employee Stock Purchase Plan (“ESPP”) purchase rights is affected by assumptions regarding subjective and complex variables. Generally, our assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. We estimate the fair value of our stock-based awards as follows:

•Restricted Stock Units and Performance-Based Restricted Stock Units. The fair value of restricted stock units and performance-based restricted stock units (other than market-based restricted stock units) is determined based on the quoted market price of our common stock on the date of grant.

•Market-Based Restricted Stock Units. Market-based restricted stock units consist of grants of performance-based restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-determined market and service conditions (referred to herein as “market-based restricted stock units”). The fair value of our market-based restricted stock units is estimated using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient.

•Stock Options and ESPP. The fair value of stock options and stock purchase rights granted pursuant to our equity incentive plans and our 2000 Employee Stock Purchase Plan, as amended, respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on a combination of historical stock price volatility and implied volatility of publicly-traded options on our common stock. An expected term is estimated based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.


	ESPP Purchase Rights
	Year Ended March 31,
	2025	2024		2023
Risk-free interest rate	4.2 - 5.0%	5.0 - 5.5%		3.1% - 5.0%
Expected volatility	21 - 30%	19 - 24%		27 - 31%
Weighted-average volatility	28%	23%		29%
Expected term	6 - 12 months	6 - 12 months		6 - 12 months
Expected dividends	0.7%	0.8	%	0.8	%

We have equity awards outstanding under two incentive plans: our 2019 Equity Incentive Plan (the “2019 Equity Plan”), as amended, and our 2000 Equity Incentive Plan, as amended (the “2000 Equity Plan”). Our 2019 Equity Plan allows us to grant options to purchase our common stock and to grant restricted stock, restricted stock units and stock appreciation rights to our employees, officers, and directors, up to a maximum of 29.5 million shares, plus any shares authorized for grant or subject to awards under the 2000 Equity Plan that are not delivered to participants for any reason. Pursuant to the 2019 Equity Plan, incentive stock options may be granted to employees and officers and non-qualified options may be granted to employees, officers, and directors, at not less than 100 percent of the fair market value on the date of grant.


	Options (in thousands)	Weighted- Average Exercise Prices		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of March 31, 2024	12	$	64.00

Granted	3	136.58
Exercised	(8)	92.08
Forfeited, cancelled or expired	(1)	58.76
Outstanding as of March 31, 2025	6	$	63.51	3.25	$	0.5
Vested and expected to vest	6	$	63.51	3.25	$	0.5
Exercisable as of March 31, 2025	6	$	63.51	3.25	$	0.5

The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2025, which would have been received by the option holders had all the option holders exercised their options as of that date. The total intrinsic values of stock options exercised during fiscal years 2025, 2024, and 2023 were $0.4 million, $10 million, and $15 million, respectively. We issue new common stock from our authorized shares upon the exercise of stock options.

We grant restricted stock units under our 2019 Equity Plan to employees worldwide. Restricted stock units are unfunded, unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of common stock equivalent to the number of restricted stock units are typically issued net of required tax withholding requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. Vesting for restricted stock units is based on the holders’ continued employment with us through each applicable vest date. If the vesting conditions are not met, unvested restricted stock units will be forfeited. Our restricted stock units generally vest over 35 months to four years.

The grant date fair value of restricted stock units is based on the quoted market price of our common stock on the date of grant. The weighted-average grant date fair values of restricted stock units granted during fiscal years 2025, 2024, and 2023 were $138.59, $129.30, and $126.41, respectively. The fair values of restricted stock units that vested during fiscal years 2025, 2024, and 2023 were $633 million, $519 million, and $460 million, respectively.

Our performance-based restricted stock units vest upon the achievement of pre-determined performance-based milestones, including, but not limited to, management reporting milestones of net bookings and operating income metrics, as well as service conditions. If these performance-based milestones are not met but service conditions are met, the performance-based restricted stock units will not vest, in which case any compensation expense we have recognized to date will be reversed. Generally, the measurement periods of our performance-based restricted stock units are 3 years, with awards vesting after each annual measurement period or cliff-vesting after the completion of the total aggregate measurement period.

Each quarter, we update our assessment of the probability that the performance milestones will be achieved. We amortize the fair values of performance-based restricted stock units over the requisite service period. The performance-based restricted stock units contain threshold, target and maximum milestones for each performance-based milestone. The number of shares of common stock to be issued at vesting will range from zero to 200 percent of the target number of performance-based restricted stock units attributable to each performance-based milestone based on the company’s performance as compared to these threshold, target and maximum performance-based milestones. Each performance-based milestone is weighted evenly and the number of shares that vest based on each performance-based milestone is independent from the other.

The weighted-average grant date fair values of performance-based restricted stock units granted during fiscal years 2025, 2024, and 2023 were $137.53, $128.66, and $127.98 respectively. The fair values of performance-based restricted stock units that vested during fiscal years 2025, 2024, and 2023 were $35 million, $11 million, and $9 million respectively.

Our market-based restricted stock units vest contingent upon the achievement of pre-determined market and service conditions. If these market conditions are not met but service conditions are met, the market-based restricted stock units will not vest; however, any compensation expense we have recognized to date will not be reversed. The number of shares of common stock to be issued at vesting for these awards are based on our total stockholder return (“TSR”) relative to the performance of either companies in the Nasdaq-100 (for awards granted in fiscal years 2023 and 2024) or the S&P 500 Index (for awards granted in fiscal year 2025) (“Relative TSR”) and on absolute TSR performance measured against pre-established goals, which started in fiscal year 2025 (“Absolute TSR”), each over a three-year period. Payout with respect to the Relative TSR component ranges from zero to 200 percent of the target number of Relative TSR units granted, and payout with respect to the Absolute TSR component ranges from zero to 75 percent of the target number of the underlying base award (which is comprised of Performance-Based Restricted Stock Units and Relative TSR units). These awards cliff-vest after the completion of the three-year measurement period, contingent on the achievement of both market and service conditions.

The following table summarizes our market-based restricted stock unit activity, presented with the maximum number of shares that could potentially vest, for the year ended March 31, 2025:


	Market-Based Restricted Stock Units (in thousands)	Weighted- Average Grant Date Fair Value
Outstanding as of March 31, 2024	354	$	168.53
Granted	381	80.91
Vested	(25)	173.25
Forfeited or cancelled	(73)	173.25
Outstanding as of March 31, 2025	637	$	115.43

The weighted-average grant date fair values of market-based restricted stock units granted during fiscal years 2025, 2024, and 2023 were $80.91, $152.92, and $176.70, respectively. The fair values of market-based restricted stock units that vested during fiscal years 2025, 2024, and 2023 were $3 million, $4 million, and $12 million, respectively.

Pursuant to our ESPP, eligible employees may authorize payroll deductions of between 2 percent and 10 percent of their compensation to purchase shares of common stock at 85 percent of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period.

The following table summarizes stock-based compensation expense resulting from stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and the ESPP purchase rights included in our Consolidated Statements of Operations (in millions):


	Year Ended March 31,
	2025		2024		2023
Cost of revenue	$	14	$	8	$	7
Research and development	457		418		367
Marketing and sales	56		52		59
General and administrative	115		106		115
Stock-based compensation expense	$	642	$	584	$	548

As of March 31, 2025, our total unrecognized compensation cost related to stock options, restricted stock units, market-based restricted stock units, and performance-based restricted stock units was $766 million and is expected to be recognized over a weighted-average service period of 1.7 years. Of the $766 million of unrecognized compensation cost, $740 million relates to restricted stock units, $13 million relates to performance-based restricted stock units, and $13 million relates to market-based restricted stock units.

We have a Deferred Compensation Plan (“DCP”) for the benefit of a select group of management or highly compensated employees and directors, which is unfunded and intended to be a plan that is not qualified within the meaning of section 401(a) of the Internal Revenue Code. The DCP permits the deferral of the annual base salary and/or director cash compensation up to a maximum amount. The deferrals are held in a separate trust, which has been established by us to administer the DCP. The trust is a grantor trust and the specific terms of the trust agreement provide that the assets of the trust are available to satisfy the claims of general creditors in the event of our insolvency. The assets held by the trust are classified as trading securities and are held at fair value on our Consolidated Balance Sheets. The assets and liabilities of the DCP are presented in other assets and other liabilities on our Consolidated Balance Sheets, respectively, with changes in the fair value of the assets and in the deferred compensation liability recognized as compensation expense. The estimated fair value of the assets was $36 million and $30 million as of March 31, 2025 and 2024, respectively. As of March 31, 2025 and 2024, $36 million and $31 million were recorded, respectively, to recognize undistributed deferred compensation due to employees.

We have a 401(k) plan covering substantially all of our U.S. employees, a Registered Retirement Savings Plan covering substantially all of our Canadian employees, and an ITP pension plan covering substantially all our Swedish employees. These plans may permit us to make discretionary contributions to employees’ accounts based on our financial performance. We contributed an aggregate of $35 million, $39 million, and $42 million to these plans in fiscal years 2025, 2024, and 2023, respectively.

In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a new program to repurchase up to $5.0 billion of our common stock. This program superseded and replaced the August 2022 program and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. We are actively repurchasing shares under this program.

In February 2025, we entered into an ASR Agreement with Goldman Sachs & Co. LLC., under which we purchased an aggregate of $1.0 billion of our common stock as part of the May 2024 repurchase program. Under the terms of the ASR Agreement, we received an aggregate delivery of 7.0 million shares of our common stock as of March 31, 2025, which were immediately retired.

Final settlement of the ASR Agreement occurred on April 25, 2025 and we received an additional 0.4 million shares, for total repurchases of 7.4 million shares at an average price of $135.05. The total number of shares delivered and the average purchase price paid per share are determined upon final settlement based on the volume weighted average price over the term of the ASR, less an agreed upon discount. Based on our ability to settle the ASR Agreement in shares, the $1.0 billion prepayment under the ASR Agreement was classified as a reduction to additional paid-in capital and common stock within the Consolidated Statement of Stockholders’ Equity.


	November 2020 Program			August 2022 Program			May 2024 Program			Total
(In millions)	Shares	Amount		Shares	Amount(a)		Shares	Amount(a)		Shares	Amount
Fiscal Year 2023	5.1	$	650	5.3	$	645	—	$	—	10.4	$	1,295
Fiscal Year 2024	—	$	—	10.0	$	1,300	—	$	—	10.0	$	1,300
Fiscal Year 2025	—	$	—	1.2	$	152	16.4	$	2,348	17.6	$	2,500
(a)Amount excludes excise taxes. Accrued excise taxes are included in accrued and other current liabilities and additional paid-in capital on the Consolidated Balance Sheets.