XML 39 R16.htm IDEA: XBRL DOCUMENT v3.24.1
Income Taxes
 12 Months Ended
Jan. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes by U.S. and foreign jurisdictions were as follows for the periods shown (in thousands):
Fiscal year ended January 31,
202420232022
United States$546,837 $482,885 $487,962 
Foreign41,186 26,211 24,349 
Total$588,023 $509,096 $512,311 
The majority of our revenues from international sales are invoiced from and collected by our U.S. entity and recognized as a component of income before taxes in the United States as opposed to a foreign jurisdiction.
Provision for income taxes consisted of the following for the periods shown (in thousands):
Fiscal year ended January 31,
202420232022
Current provision:
Federal$126,174 $110,610 $53,426 
State29,361 29,775 12,580 
Foreign12,157 8,507 7,837 
Total current provision167,692 148,892 73,843 
Deferred (benefit) provision:
Federal(87,651)(98,923)1,870 
State(15,739)(20,755)945 
Foreign(1,984)(7,824)8,264 
Total deferred (benefit) provision(105,374)(127,502)11,079 
Provision for income taxes$62,318 $21,390 $84,921 
Provision for income taxes differed from the amount computed by applying the federal statutory income tax rate of 21% for each of the fiscal years ended January 31, 2024, 2023, and 2022 to income before income taxes as a result of the following for the periods shown (in thousands):
Fiscal year ended January 31,
202420232022
Expected provision at statutory tax rate
$123,485 $106,910 $107,585 
State taxes, net of federal benefit
12,056 7,318 11,035 
Tax credits(36,333)(33,463)(25,968)
Stock-based compensation(32,054)(52,304)(29,715)
Valuation allowance13,572 5,654 19,402 
Foreign derived intangible income deduction (FDII)(15,489)(15,811)(3,406)
Release of income tax reserves(1)
(9,201)(293)(440)
Other(1)
6,282 3,379 6,428 
Provision for income taxes$62,318 $21,390 $84,921 
(1)Prior period balances were adjusted to conform with current period presentation.
The tax effects of temporary differences that give rise to significant portions of our deferred tax assets and liabilities related to the following (in thousands):
January 31,
20242023
Deferred tax assets:
Accruals and reserves$9,488 $13,137 
Capitalized expenditures228,845 123,746 
Stock-based compensation49,710 32,536 
Net operating loss carryforward6,469 12,245 
Tax credit carryforward65,307 43,732 
Lease liabilities13,967 15,724 
Other2,403 7,890 
Gross deferred tax assets376,189 249,010 
Valuation allowance(79,056)(51,685)
Total deferred tax assets297,133 197,325 
Deferred tax liabilities:
Intangible assets(27,019)(28,799)
Lease right-of-use assets(11,410)(14,192)
Deferred costs(6,242)(12,949)
Other(21,051)(6,180)
Total deferred tax liabilities(65,722)(62,120)
Net deferred tax assets$231,411 $135,205 
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowance at the end of January 31, 2024 was primarily related to certain foreign and U.S. state deferred tax assets.
As of January 31, 2024, the net operating loss carryforwards for state and foreign income tax purposes were approximately $25 million and $18 million, respectively, and will begin to expire in 2031 and 2026, respectively. As of January 31, 2024, we had $3 million of federal and state capital loss carryforwards available to offset future capital gains. The federal and state capital losses begin to expire in 2029.
As of January 31, 2024, we had $78 million of California research and development tax credits available to offset future taxes which do not expire.
We evaluate tax positions for recognition using a more likely than not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. We classify unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as “other non-current liabilities” in the consolidated balance sheets. As of January 31, 2024, the total amount of gross
unrecognized tax benefits was $40 million, of which $26 million, if recognized, would favorably impact our effective tax rate. The aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows for the periods shown (in thousands):
Fiscal year ended January 31,
202420232022
Beginning balance$30,713 $25,241 $18,628 
Increases related to tax positions taken during the prior period7,385 971 3,218 
Increases related to tax positions taken during the current period10,131 4,934 4,122 
Decreases related to tax positions taken during the prior period(17)(137)— 
Audit settlements— — (195)
Lapse of statute of limitations(8,475)(296)(532)
Ending balance$39,737 $30,713 $25,241 
Our policy is to classify interest and penalties associated with unrecognized tax benefits as a component of the provision for income taxes. Accrued interest and penalties included in our liability related to unrecognized tax benefits were $2 million, $3 million, and $2 million as of January 31, 2024, 2023, and 2022, respectively.
We file tax returns in the United States for federal, California, and other states. Fiscal years ended January 31, 2021 and forward remain open to examination for federal income tax, and fiscal years ended January 31, 2018 and forward remain open to examination for California and other states. We file tax returns in multiple foreign jurisdictions. The fiscal years ended January 31, 2019 and forward remain open to examination in these foreign jurisdictions.