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Income Taxes
 12 Months Ended
Jan. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The domestic and foreign components of pre-tax income (loss) were as follows:
Year Ended January 31,
(in thousands)202520242023
U.S.$179,128 $54,551 $19,673 
International68,813 39,128 (109,554)
Income (loss) before income taxes$247,941 $93,679 $(89,881)

The components of our income tax provision were as follows:
Year Ended January 31,
(in thousands)202520242023
Current
Federal$4,758 $6,390 $(464)
State7,936 2,018 1,666 
Foreign6,105 4,974 4,674 
Total current18,799 13,382 5,876 
Deferred
Federal(747,082)21 21 
State(94,945)2 (21)
Foreign3,284 6,294 1,697 
Total deferred(838,743)6,317 1,697 
Provision for income taxes$(819,944)$19,699 $7,573 

The reconciliation of the statutory federal income tax rate to our effective tax rate was as follows:
Year Ended January 31,
(in percentage)202520242023
U.S. statutory rate21.0 %21.0 %21.0 %
State taxes4.0 2.4 (2.4)
Foreign tax rate differential0.5 37.9 16.4 
Foreign-derived intangible income deduction(3.8)(11.7)— 
Stock-based compensation7.9 81.8 (55.1)
Change in valuation allowance(331.7)(102.5)(35.5)
Dual Jurisdiction Deferred Taxes(2.9)36.0 39.2 
Research and development credits(17.3)(46.0)20.1 
Other deferred adjustment(10.7)(1.2)(10.7)
Other2.3 3.3 (1.4)
Effective tax rate(330.7)%21.0 %(8.4)%
The significant components of net deferred tax balances were as follows:
January 31,
(in thousands)20252024
Deferred tax assets
Net operating loss carryforwards$486,505 $570,152 
Accruals and reserves16,772 14,895 
Stock-based compensation42,949 39,320 
Research and development credits179,275 147,959 
Capitalized research and development expenses350,729 246,945 
Other54,286 53,140 
Total deferred tax assets1,130,516 1,072,411 
Less: Valuation allowance(112,847)(934,816)
Deferred tax assets, net of valuation allowance1,017,669 137,595 
Deferred tax liabilities
Deferred contract acquisition costs(121,678)(100,806)
Fixed Assets and Intangible Assets(54,137)(26,258)
Other(21,980)(25,242)
Total deferred tax liabilities(197,795)(152,306)
Net deferred tax assets / (liabilities)$819,874 $(14,711)


Our income tax benefit was $819.9 million for the year ended January 31, 2025. The benefit was primarily attributable to the release of valuation allowances related to U.S. federal and certain state deferred tax assets of $837.3 million. We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized. As of January 31, 2025, based on all available positive and negative evidence, having demonstrated sustained U.S. profitability, which is objective and verifiable, and taking into account anticipated future earnings, we have concluded it is more likely than not that we will realize our U.S. federal and U.S. states deferred tax assets, with the exception of certain federal deferred tax assets subject to limitation on use and our California deferred tax assets. We continue to maintain a valuation allowance against these deferred tax assets as they have not met the “more likely than not” realization criterion.

We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant additional costs upon repatriation of such amounts.
Recognized tax benefits on total stock-based compensation expense, which are reflected in the "Provision for (benefit from) income taxes" in the consolidated statements of operations and comprehensive income (loss), were $143.0 million, $7.1 million and $3.3 million in the years ended January 31, 2025, 2024 and 2023, respectively. Our tax provision includes $16.0 million of excess tax benefits, $3.8 million tax shortfall and $2.2 million tax shortfall from stock-based compensation for the years ended January 31, 2025, 2024 and 2023, respectively.

As of January 31, 2025, we had accumulated net operating loss carryforwards of $1.8 billion for federal and $1.3 billion for state. Of the federal net operating losses, $1.8 billion is carried forward indefinitely, but utilization is limited to 80% of taxable income. The remaining federal and state net operating loss carryforwards will begin to expire in 2027 and 2029, respectively. As of January 31, 2025, we also had total foreign net operating loss carryforwards of $145.4 million, which do not expire under local law.

As of January 31, 2025, we had accumulated U.S. research tax credits of $190.5 million for federal and $61.5 million for California. The U.S. federal research tax credits will begin to expire in 2039. The California research tax credits do not expire.
A reconciliation of the beginning and ending balance of total unrecognized tax benefits was as follows:
January 31,
(in thousands)202520242023
Unrecognized tax benefits balance at February 1$60,744 $47,946 $46,729 
Gross increase for tax positions of prior years— 4,368 333 
Gross decrease for tax positions of prior years(307)(156)(1,734)
Settlements— — (2,484)
Gross increase for tax positions of current year15,109 8,586 5,102 
Unrecognized tax benefits balance at January 31$75,546 $60,744 $47,946 

As of January 31, 2025, we had $75.5 million of unrecognized tax benefits, of which $60.9 million could affect the Company’s effective tax rate, if recognized. We do not expect our gross unrecognized tax benefit to change significantly within the next 12 months. We recognize interest and penalties related to uncertain tax positions in provision for income taxes. As of January 31, 2025, accrued interest and penalties was $2.2 million.

We are subject to taxation in the U.S. and various foreign jurisdictions. Our tax years from inception in 2003 through January 31, 2025 remain subject to examination by U.S. and California taxing authorities, as well as taxing authorities in various other state and foreign jurisdictions. We are not under examination in any material jurisdictions.

The following table represents the rollforward of our valuation allowance:
Year Ended January 31,
(in thousands)202520242023
Beginning balance$934,816 $1,032,016 $999,191 
Valuation allowance charged to income tax provision(821,969)(97,200)32,825 
Ending balance$112,847 $934,816 $1,032,016