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Income Taxes | 12 Months Ended
--- | ---
Jan. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Our loss before provision for income taxes for fiscal 2024, 2023 and 2022 consisted of the following (in thousands):
| Year Ended January 31,
| 2024 |  | 2023 |  | 2022
Domestic | $ | (406,151) |  |  | $ | (432,235) |  |  | $ | (274,270) |
Foreign | 73,317 |  |  | 47,944 |  |  | 4,173 |
Loss before provision for income taxes | $ | (332,834) |  |  | $ | (384,291) |  |  | $ | (270,097) |
The components of provision for income taxes for fiscal 2024, 2023 and 2022 consisted of the following (in thousands):
| Year Ended January 31,
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
State | $ | 150 |  |  | $ | 53 |  |  | $ | 82 |
Foreign | 5,168 |  |  | 3,661 |  |  | 1,011 |
Total current | 5,318 |  |  | 3,714 |  |  | 1,093 |
Deferred: |  |  |  |  |
Federal | — |  |  | (6,754) |  |  | — |
State | — |  |  | (2,913) |  |  | — |
Foreign | 541 |  |  | 340 |  |  | (89) |
Total deferred | 541 |  |  | (9,327) |  |  | (89) |
Total provision for income taxes | $ | 5,859 |  |  | $ | (5,613) |  |  | $ | 1,004 |
A reconciliation of the expected provision for (benefit from) income taxes at the statutory federal income tax rate to our recorded provision for income taxes consisted of the following (in thousands):
| Year Ended January 31,
| 2024 |  | 2023 |  | 2022
Benefit from income taxes at US federal statutory rate | $ | (69,895) |  |  | $ | (80,701) |  |  | $ | (56,720) |
State taxes, net of federal benefit | 150 |  |  | 53 |  |  | 82 |
Foreign tax rate differential | 23,179 |  |  | 10,140 |  |  | (1,297) |
Stock-based compensation | 12,367 |  |  | 2,734 |  |  | (23,442) |
Non-deductible expenses | 1,390 |  |  | 1,780 |  |  | 322 |
Research and development credits | (2,251) |  |  | (688) |  |  | (20) |
Change in valuation allowance | 40,525 |  |  | 60,145 |  |  | 81,739 |
Other | 394 |  |  | 924 |  |  | 340 |
Total provision for (benefit from) income taxes | $ | 5,859 |  |  | $ | (5,613) |  |  | $ | 1,004 |
Significant components of our net deferred tax assets and liabilities as of January 31, 2024 and 2023 consisted of the following (in thousands):
| As of January 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 226,971 |  |  | $ | 228,400 |
Research and development expenses | 106,257 |  |  | 72,432 |
Deferred revenue | 36,199 |  |  | 25,643 |
Accruals and reserves | 9,265 |  |  | 6,215 |
Operating lease liabilities | 7,492 |  |  | 9,139 |
Stock-based compensation | 14,300 |  |  | 17,528 |
Other | 7,111 |  |  | 2,622 |
Gross deferred tax assets | 407,595 |  |  | 361,979 |
Valuation allowance | (340,951) |  |  | (291,751) |
Total deferred tax assets | 66,644 |  |  | 70,228 |
Deferred tax liabilities: |  |  |
Acquired intangibles, property and equipment | (28,652) |  |  | (37,170) |
Deferred contract acquisition costs | (30,423) |  |  | (22,868) |
Operating lease right-of-use assets | (6,582) |  |  | (8,162) |
Other | (1,782) |  |  | (2,279) |
Total deferred tax liabilities | (67,439) |  |  | (70,479) |
Net deferred tax assets (liabilities) | $ | (795) |  |  | $ | (251) |
Based upon available objective evidence, we believe it is more likely than not that the US and Israel net deferred tax assets will not be fully realizable. Accordingly, we have established a valuation allowance for the US and Israel gross deferred tax assets. As of January 31, 2024 and 2023, we had a valuation allowance of $341.0 million and $291.8 million, respectively, against our deferred tax assets. During fiscal 2024 and 2023, total valuation allowance increased by $49.2 million and $72.8 million, respectively, primarily due to additional net operating losses. As of January 31, 2024, we had federal net operating loss carryforwards of $721.2 million, which will begin to expire in 2031, and state net operating loss carryforwards of $390.6 million, which will begin to expire in 2025. We also had foreign net operating loss carryforwards of $202.8 million, which do not expire. In addition, we had federal research and development credit carryforwards of $5.9 million, which will begin to expire in 2037, and state research and development credit carryforwards of $2.9 million, which do not expire. Federal and state tax laws impose substantial restrictions on the utilization of the net operating loss carryforwards and tax credit carryforwards in the event of an ownership change as defined in Section 382 of the Internal Revenue Code of 1986, as amended. Accordingly, our ability to utilize these carryforwards may be limited as a result of such ownership change. Such a limitation could result in the expiration of carryforwards before they are utilized. The carryforwards are currently subject to a valuation allowance. Foreign withholding taxes have not been provided for the cumulative undistributed earnings of certain foreign subsidiaries of us as of January 31, 2024 and 2023 due to our intention to permanently reinvest such earnings. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. We file income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. Our tax years generally remain open and subject to examination by federal, state, or foreign tax authorities. We are currently under examination by the Israel Tax Authorities for the 2017 through 2021 tax years. We are not currently under audit in any other tax jurisdictions. The changes in the gross amount of unrecognized tax benefits consisted of the following (in thousands):
| As of January 31,
| 2024 |  | 2023 |  | 2022
Balance at beginning of year | $ | 1,013 |  |  | $ | 566 |  |  | $ | 534 |
Gross increases for tax positions of current year | 1,027 |  |  | 447 |  |  | 32 |
Gross increases for tax positions of prior year | 157 |  |  | — |  |  | — |
Balance at end of year | $ | 2,197 |  |  | $ | 1,013 |  |  | $ | 566 |
We recognize interests and penalties related to income tax matters as a component of income tax expense. We do not anticipate that its total unrecognized tax benefits will significantly change during the next 12 months.

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