INTUIT INC.

Previous wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Also on August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three months ended October 31, 2024, we reclassified expenses totaling $3 million from Global Business Solutions and $152 million from Consumer to other corporate expenses, respectively, to conform to the current presentation. See Note 12,"Segment Information," for more information.

Current wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Also on August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. As a result of these changes, for the three and six months ended January 31, 2025, we reclassified expenses totaling $3 million and $6 million from Global Business Solutions and $149 million and $301 million from Consumer to other corporate expenses, respectively, to conform to the current presentation. See Note 12,"Segment Information," for more information.

Previous wording

The era of AI is igniting global innovations at an incredible pace and will fundamentally transform every part of our work and personal lives. We made an early bet on AI, declaring our AI-driven expert platform strategy in 2019. We have transformed the company from a tax and accounting platform to an AI-driven expert platform. We have a significant competitive advantage as we are creating a system of intelligence with our scale of data, data services, AI capabilities, ecosystem of applications, and our large network of AI-enabled human experts to become the all-in-one platform for consumers, businesses, and accountants. We're disrupting the categories we operate in to drive better money outcomes for our customers.

Current wording

The era of AI is igniting global innovations at an incredible pace and will fundamentally transform every part of our work and personal lives. We made an early bet on AI, declaring our AI-driven expert platform strategy in 2019. We have transformed the company from a tax and accounting platform to an AI-driven expert platform. We have a significant competitive advantage as we are creating a system of intelligence with our scale of data, data services, AI capabilities, ecosystem of applications, and our large network of AI-enabled human experts to become the all-in-one platform for consumers, businesses, and accountants. We are disrupting the categories we operate in to drive better money outcomes for our customers.

Previous wording

AI, including GenAI, predictive AI, and agentic AI, is transforming multiple industries, in particular financial technology. Disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service. These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting around the world as more services become digitized and the array of choices continues to increase.

Current wording

AI, including GenAI, predictive AI, and agentic AI, is transforming multiple industries, in particular financial technology. Disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service. These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting as more services become digitized and the array of choices continues to increase.

Previous wording

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole and for each reportable segment; operating income growth for the company as a whole; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. Service offerings are a significant part of our business. Our total service revenue was $16.4 billion, or 87% of our total revenue, in fiscal 2025, and we expect our total service revenue as a percentage of our total revenue to grow over the long term.

Current wording

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole and for each reportable segment; operating income growth for the company as a whole; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. Service offerings are a significant part of our business. In fiscal 2025, our total service revenue was $16.4 billion, or 87% of our total revenue, and we expect our total service revenue as a percentage of our total revenue to grow over the long term.

Previous wording

Key highlights for the first three months of fiscal 2026 include the following:

Current wording

Key highlights for the first six months of fiscal 2026 include the following:

Previous wording

In preparing our condensed consolidated financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We believe that the estimates, assumptions, and judgments described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting estimates. There were no significant changes in those critical accounting estimates during the first three months of fiscal 2026. Senior management has reviewed the development and selection of our critical accounting estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit and Risk Committee of our Board of Directors.

Current wording

In preparing our condensed consolidated financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We believe that the estimates, assumptions, and judgments described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting estimates. There were no significant changes in those critical accounting estimates during the first six months of fiscal 2026. Senior management has reviewed the development and selection of our critical accounting estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit and Risk Committee of our Board of Directors.

Previous wording

Total net revenue for the first quarter of fiscal 2026 increased $602 million, or 18%, compared with the same quarter of fiscal 2025. Our Global Business Solutions segment revenue increased 18% during the quarter due to growth in our Online Ecosystem revenue. Consumer segment revenue increased 21% due to strength in our Credit Karma personal loan, credit card, and auto insurance verticals. See“Segment Results” later in this Item 2 for more information about the results for all of our reportable segments.

Current wording

Total net revenue for the second quarter of fiscal 2026 increased $688 million, or 17%, compared with the same quarter of fiscal 2025. Our Global Business Solutions segment revenue increased 18% during the quarter due to growth in our Online Ecosystem revenue. Consumer segment revenue increased 15% due to strength in our Credit Karma personal loan, credit card, and insurance verticals, as well as from strength in TurboTax due to growth in assisted tax and our consumer money offerings. See“Segment Results” later in this Item 2 for more information about the results for all of our reportable segments.

Previous wording

Operating income for the first quarter of fiscal 2026 increased $263 million, or 97%, compared with the same quarter of fiscal 2025. The increase in operating income was due to the increase in revenue described above, partially offset by an increase in expenses. Expenses increased due to increases in staffing, outside services, share-based compensation, and SaaS subscriptions and licenses. See“Cost of Revenue” and“Operating Expenses” later in this Item 2 for more information.

Current wording

Operating income for the second quarter of fiscal 2026 increased $262 million, or 44%, compared with the same quarter of fiscal 2025. The increase in operating income was due to the increase in revenue described above, partially offset by an increase in expenses. Expenses increased due to increases in expenses for outside services, which includes hosting, staffing, marketing, SaaS subscriptions and licenses, and share-based compensation. See“Cost of Revenue” and“Operating Expenses” later in this Item 2 for more information.

Previous wording

Net income for the first quarter of fiscal 2026 increased $249 million, or 126%, compared with the same quarter of fiscal 2025. The increase in net income was due to the increase in operating income described and the increase in interest and other income, partially offset by an increase in income tax expense. The increase in interest and other income is the result of $34 million in net gains on long-term investments recorded in the first quarter of fiscal 2026 and $42 million in net losses on long-term investments recorded during the same quarter of fiscal 2025. The increase in income tax expense is due to the increase in operating income described above. Diluted net income per share increased to $1.59 for the first quarter of fiscal 2026 compared to $0.70 for the same quarter of fiscal 2025, relatively consistent with the increase in net income.

Current wording

Net income for the second quarter of fiscal 2026 increased $222 million, or 47%, compared with the same quarter of fiscal 2025. The increase in net income was due to the increase in operating income described above and an increase in interest and other income, partially offset by an increase in income tax expense. The increase in interest and other income is the result of $31 million in net gains on long-term investments recorded in the second quarter of fiscal 2026 and $1 million in net losses on long-term investments recorded during the same quarter of fiscal 2025. The increase in income tax expense is due to the increase in operating income described above. Diluted net income per share increased to $2.48 for the second quarter of fiscal 2026 compared to $1.67 for the same quarter of fiscal 2025, relatively consistent with the increase in net income.

Previous wording

The information below is organized in accordance with our two reportable segments. See“Executive Overview – About Intuit” earlier in this Item 2 and Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for more information. All of our segments operate and sell to customers primarily in the U.S. Total international net revenue was approximately 9% and 10% of consolidated net revenue for the three months ended October 31, 2025 and October 31, 2024, respectively.

Current wording

The information below is organized in accordance with our two reportable segments. See“Executive Overview – About Intuit” earlier in this Item 2 and Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for more information. All of our segments operate and sell to customers primarily in the U.S. Total international net revenue was approximately 8% and 9% of consolidated net revenue for the three and six months ended January 31, 2026, respectively. Total international net revenue was approximately 9% of consolidated net revenue for each of the three and six months ended January 31, 2025.

Previous wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Also on August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three months ended October 31, 2024, we reclassified expenses totaling $3 million from Global Business Solutions and $152 million from Consumer to other corporate expenses, respectively, to conform to the current presentation.

Current wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Also on August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. As a result of these changes, for the three and six months ended January 31, 2025, we reclassified expenses totaling $3 million and $6 million from Global Business Solutions and $149 million and $301 million from Consumer to other corporate expenses, respectively, to conform to the current presentation.

Previous wording

Segment operating income or loss is segment net revenue less segment cost of revenue and operating expenses. See“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2 for a description of the seasonality of our business. We include expenses such as corporate selling and marketing, general and administrative, and non-employment related legal and litigation settlement costs, which are not allocated to specific segments, in unallocated corporate items as part of other corporate expenses. As part of our platform strategy, we also include customer success and product development for our segments in unallocated corporate items as we do not allocate these expenses to the segments because they are managed at the platform level. Customer success includes the costs of tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings. Unallocated corporate items also include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction costs related to business combinations, and restructuring charges. These unallocated corporate costs for all segments totaled $2.4 billion and $2.2 billion for the three months ended October 31, 2025 and October 31, 2024, respectively. Unallocated corporate items increased in the fiscal 2026 period,

Current wording

Segment operating income or loss is segment net revenue less segment cost of revenue and operating expenses. See“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2 for a description of the seasonality of our business. We include expenses such as corporate selling and marketing, general and administrative, and non-employment related legal and litigation settlement costs, which are not allocated to specific segments, in unallocated corporate items as part of other corporate expenses. As part of our platform strategy, we also include customer success and product development for our segments in unallocated corporate items as we do not allocate these expenses to the segments because they are managed at the platform level. Customer success includes the costs of tax and bookkeeping experts that support our TurboTax Expert Assist, TurboTax Expert Full Service, and QuickBooks Live offerings. Unallocated corporate items also include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction costs related to business combinations, and restructuring charges. These unallocated corporate costs for all segments totaled $4.8 billion and $4.4 billion for the six months ended January 31, 2026 and January 31, 2025, respectively. Unallocated corporate items increased in the fiscal 2026 period, primarily due to increases in research and development expense, cost of service revenue, and selling and marketing expense. See Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for reconciliations of total segment operating income or loss to consolidated operating income or loss for each fiscal period presented.

Previous wording

Revenue for our Global Business Solutions segment increased $447 million, or 18%, in the first quarter of fiscal 2026 compared with the same period of fiscal 2025. The increase was primarily due to growth in Online Ecosystem revenue.

Current wording

Revenue for our Global Business Solutions segment increased $493 million, or 18%, in the second quarter of fiscal 2026 and $940 million, or 18%, in the first six months of fiscal 2026 compared with the same periods of fiscal 2025. The increase in both periods was primarily due to growth in Online Ecosystem revenue.

Previous wording

Online Ecosystem revenue increased $408 million, or 21%, in the first quarter of fiscal 2026 compared with the same period of fiscal 2025. QuickBooks Online Accounting revenue increased $241 million, or 25%, in the first quarter of fiscal 2026 due to the interrelated factors of higher effective prices, customer growth, and mix-shift. Online Services revenue increased $167 million, or 17%, in the first quarter of fiscal 2026, due to increases in revenue from our money offerings of $105 million and our payroll offerings of $67 million. Revenue increases were due to the interrelated factors described below. Money revenue increased $105 million due to a $58 million increase in payments revenue from payments customer growth, an increase in total payment volume per customer, and higher effective payments prices, and a $47 million increase from QuickBooks Capital. Online payroll revenue increased due to mix-shift, customer growth, and higher effective prices.

Current wording

Online Ecosystem revenue increased $429 million, or 21%, in the second quarter of fiscal 2026 compared with the same period of fiscal 2025. QuickBooks Online Accounting revenue increased $240 million, or 24%, in the second quarter of fiscal 2026 due to the interrelated factors of higher effective prices, customer growth, and mix-shift. Online Services revenue increased $189 million, or 18%, in the second quarter of fiscal 2026, due to increases in revenue from our money offerings of $115 million and our payroll offerings of $82 million. Revenue increases were due to the interrelated factors described below. Money revenue increased $115 million due to a $64 million increase in payments revenue from payments customer growth, an increase in total payment volume per customer, and higher effective payments prices, and a $51 million increase from QuickBooks Capital. Online payroll revenue increased due to mix-shift, customer growth, and higher effective prices.

Previous wording

Desktop Ecosystem revenue increased $39 million, or 6%, in the first quarter of fiscal 2026 compared with the same period of fiscal 2025 due to higher effective prices.

Current wording

Desktop Ecosystem revenue increased $64 million, or 10%, in the second quarter of fiscal 2026 and $103 million, or 8%, in the first six months of fiscal 2026 compared with the same periods of fiscal 2025 due to higher effective prices.

Previous wording

Global Business Solutions segment operating income increased $332 million, or 17%, in the first quarter of fiscal 2026 compared with the same period of fiscal 2025, due to the increase in revenue described above, partially offset by increases in staffing expenses of $24 million, QuickBooks Capital cost of revenue of $23 million due to increased loan volume, marketing expenses of $21 million, outside services expenses of $16 million, and online payments cost of revenue of $10 million due to an increase in payments volume.

Current wording

Global Business Solutions segment operating income increased $351 million, or 17%, in the second quarter of fiscal 2026 compared with the same period of fiscal 2025, due to the increase in revenue described above, partially offset by increases in QuickBooks Capital cost of revenue of $32 million due to increased loan volume, online payments cost of revenue of $26 million due to an increase in payments volume, marketing expenses of $23 million, staffing expenses of $20 million, and outside services expenses, which includes hosting, of $13 million.

Previous wording

On August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three months ended October 31, 2024, we reclassified $3 million from Global Business Solutions to other corporate expenses to conform to the current presentation.

Current wording

On August 1, 2025, we reorganized certain marketing, communications, and customer success functions in our Global Business Solutions segment that support and benefit our overall platform and are managed at that level rather than at the segment level. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three and six months ended January 31, 2025, we reclassified $3 million and $6 million from Global Business Solutions to other corporate expenses to conform to the current presentation.

Previous wording

•TurboTax - TurboTax Online and TurboTax Live offerings; TurboTax desktop tax return preparation software; electronic tax filing services; Credit Karma Money; and related services.

Current wording

•TurboTax: TurboTax Online; TurboTax Expert Assist and TurboTax Expert Full Service offerings; TurboTax desktop tax return preparation software; electronic tax filing services; Credit Karma Money; and related services.

Previous wording

Revenue for our Consumer segment increased $155 million, or 21%, in the first three months of fiscal 2026 compared with the same period of fiscal 2025 due to an increase in Credit Karma revenue of $138 million. The increase in Credit Karma is due to increases in revenue from our personal loan vertical of $65 million, our credit card vertical of $53 million, and our auto insurance vertical of $16 million. Due to the seasonal nature of our TurboTax and ProTax offerings, they typically generate minimal revenue in our first fiscal quarter compared with our second and third fiscal quarters. The majority of revenue for the first quarter of each fiscal year for our TurboTax and ProTax offerings is for the filing of returns from the previous tax year.

Current wording

Revenue for our Consumer segment increased $195 million, or 15%, in the second quarter of fiscal 2026 compared with the same period of fiscal 2025 due to an increase in Credit Karma revenue of $116 million and TurboTax revenue of $61 million. The increase in Credit Karma is due to increases in revenue from our personal loan vertical of $50 million, our credit card vertical of $39 million, and our insurance vertical of $22 million. The increase in TurboTax revenue is due to growth in assisted tax and our consumer money offerings.

Previous wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three months ended October 31, 2024, we reclassified $152 million from Consumer to other corporate expenses to conform to the current presentation.

Current wording

Effective August 1, 2025, we combined our Consumer, Credit Karma, and ProTax businesses into a single Consumer segment in order to better serve the diverse financial needs of our customers as one consumer platform. Our chief operating decision maker allocates resources and assesses segment performance using regularly provided segment revenue and segment operating income information under this updated segment structure. To align results under this segment change, certain selling and marketing, product development, and general and administrative expenses for Credit Karma that were managed at the segment level are now managed at the platform level and are included in other corporate expenses rather than in segment expenses. Additionally, certain data science and analytics teams that were managed at the platform level are now managed at the segment level. We have recast certain previously reported amounts to conform to these segment changes. For the three and six months ended January 31, 2025, we reclassified $149 million and $301 million from Consumer to other corporate expenses to conform to the current presentation.

Previous wording

Our cost of revenue has three components: (1) cost of service revenue, which includes the direct costs associated with our online and service offerings, such as staffing costs for ongoing production support, customer support, and tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings, costs for data processing and storage capabilities from cloud providers, and costs related to credit score providers; (2) cost of product and other revenue, which includes the direct costs of manufacturing and shipping or electronically downloading our desktop software and financial supplies products; and (3) amortization of acquired technology, which represents the cost of amortizing developed technologies that we have obtained through acquisitions, over their useful lives.

Current wording

Our cost of revenue has three components: (1) cost of service revenue, which includes the direct costs associated with our online and service offerings, such as staffing costs for ongoing production support, customer support, and tax and bookkeeping experts that support our TurboTax Expert Assist, TurboTax Expert Full Service, and QuickBooks Live offerings, costs for data processing and storage capabilities from cloud providers, and costs related to credit score providers; (2) cost of product and other revenue, which includes the direct costs of manufacturing and shipping or electronically downloading our desktop software and financial supplies products; and (3) amortization of acquired technology, which represents the cost of amortizing developed technologies that we have obtained through acquisitions, over their useful lives.

Previous wording

Cost of service revenue as a percentage of service revenue was relatively consistent in the first quarter of fiscal 2026 compared with the same period of fiscal 2025.

Current wording

Cost of service revenue as a percentage of service revenue was relatively consistent for both the second quarter and first six months of fiscal 2026 compared with the same periods of fiscal 2025.

Previous wording

Cost of product and other revenue as a percentage of product and other revenue was consistent in the first quarter of fiscal 2026 compared with the same period of fiscal 2025. Costs of product and other revenue are expensed as incurred, and we do not defer any of these costs when product and other revenue is deferred.

Current wording

Cost of product and other revenue as a percentage of product and other revenue was consistent for both the second quarter and first six months of fiscal 2026 compared with the same periods of fiscal 2025. We expense costs of product revenue as they are incurred for delivered software and we do not defer any of these costs when product revenue is deferred.

Previous wording

Total operating expenses as a percentage of total net revenue decreased in the first quarter of fiscal 2026 compared to the same period of fiscal 2025. Total net revenue for the first quarter of fiscal 2026 increased $602 million, or 18%, while total operating expenses for the quarter increased $279 million, or 13%. The increase in total operating expenses was due to increases of $125 million for staffing expenses, $47 million for outside services expenses, and $46 million for share-based compensation expenses.

Current wording

Total operating expenses as a percentage of total net revenue decreased in the first six months of fiscal 2026 compared with the same period of fiscal 2025. Total net revenue for the first six months of fiscal 2026 increased $1.3 billion, or 18%, while total operating expenses for the quarter increased $599 million, or 13%. The increase in total operating expenses was due to increases of $238 million for staffing expenses, $95 million for outside services expenses, which includes hosting, $85 million for share-based compensation expenses, and $85 million for marketing.

Previous wording

Interest expense of $58 million and $60 million for the first three months of fiscal 2026 and 2025, respectively, consisted of interest on our senior unsecured notes.

Current wording

Interest expense of $116 million and $120 million for the first six months of fiscal 2026 and 2025, respectively, consisted of interest on our senior unsecured notes.

Previous wording

(1)Interest income for the three months ended October 31, 2025 decreased compared to the same period of fiscal 2025 due to lower average interest rates, partially offset by higher average investable balances.

Current wording

(1)Interest income for the three months ended January 31, 2026 was relatively consistent compared with the same period of fiscal 2025. Interest income for the six months ended January 31, 2026 decreased compared with the same period of fiscal 2025 due to lower average interest rates, partially offset by higher average investable balances.

Previous wording

(3)During the three months ended October 31, 2025 and 2024, we recorded $34 million in net gains and $42 million in net losses on long-term investments, respectively.

Current wording

(3)During the three and six months ended January 31, 2026, we recorded $31 million and $58 million in net gains on long-term investments, respectively. During the three and six months ended January 31, 2025, we recorded $1 million and $43 million in net losses on long-term investments, respectively.

Previous wording

We recognized excess tax benefits on share-based compensation of $30 million and $28 million in our provision for income taxes for the three months ended October 31, 2025 and 2024, respectively.

Current wording

For the three and six months ended January 31, 2026, we recognized excess tax benefits on share-based compensation of $21 million and $51 million, respectively, in our provision for income taxes. For the three and six months ended January 31, 2025, we recognized excess tax benefits on share-based compensation of $29 million and $57 million, respectively, in our provision for income taxes.

Previous wording

Our effective tax rate for the three months ended October 31, 2025 was approximately 20%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Current wording

Our effective tax rate for the three and six months ended January 31, 2026 was approximately 20%. Excluding discrete tax items primarily related to share-based compensation tax benefits including those mentioned above, our effective tax rate for both periods was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Previous wording

Our effective tax rate for the three months ended October 31, 2024 was approximately 8%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Current wording

Our effective tax rates for the three and six months ended January 31, 2025 were approximately 17% and 15%, respectively. Excluding discrete tax items primarily related to share-based compensation tax benefits including those mentioned above, our effective tax rate for both periods was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Previous wording

On July 4, 2025, the U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA), which includes significant tax law changes, most notably the reinstatement of the immediate expensing of domestic research and developmental expenditures, effective in fiscal 2026. The deductibility of these expenditures is expected to significantly reduce our deferred tax assets and income tax payable for periods starting in fiscal 2026.

Current wording

On July 4, 2025, the U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA), which includes significant tax law changes, most notably the reinstatement of the immediate expensing of domestic research and developmental expenditures, effective in fiscal 2026. The deductibility of these expenditures is expected to significantly reduce our deferred tax assets and income taxes payable for periods starting in fiscal 2026. On February 18, 2026, the U.S. Treasury and the Internal Revenue Service issued Notice 2026-7 (Notice), which announced their intent to issue proposed tax regulations regarding the Corporate Alternative Minimum Tax. We are currently evaluating the impacts of this Notice, which may further reduce our deferred tax assets and income taxes payable in fiscal 2026. The Notice is not expected to impact results of operations in fiscal 2026 or thereafter.

Previous wording

At October 31, 2025, our cash, cash equivalents, and investments totaled $3.7 billion, a decrease of $856 million from July 31, 2025 driven by cash used in financing activities, partially offset by cash from investing activities and operations. See the discussion of all factors under“Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which entails the collection of accounts receivable for products and services, the issuance of senior unsecured notes and commercial paper, and borrowings under our credit facilities. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital projects, acquisitions of businesses, debt service costs and debt repayment, repurchases of our common stock under our stock repurchase programs, the payment of cash dividends, and funding of our financing for small and mid-market businesses and early tax refund offerings. As discussed in“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2, our business is subject to significant seasonality. The balance of our cash, cash equivalents, and investments generally fluctuates with that seasonal pattern. We believe the seasonality of our business is likely to continue in the future.

Current wording

At January 31, 2026, our cash, cash equivalents, and investments totaled $3.0 billion, a decrease of $1.6 billion from July 31, 2025 driven by cash used in financing activities, partially offset by cash from operations and investing activities. See the discussion of all factors under“Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which entails the collection of accounts receivable for products and services, the issuance of senior unsecured notes and commercial paper, and borrowings under our credit facilities. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital projects, acquisitions of businesses, debt service costs and debt repayment, repurchases of our common stock under our stock repurchase programs, the payment of cash dividends, and

Previous wording

We have historically generated significant cash from operations, and we expect to continue to do so in the future. Our cash, cash equivalents, and investments totaled $3.7 billion at October 31, 2025. None of those funds were restricted and approximately 89% of those funds were located in the U.S.

Current wording

We have historically generated significant cash from operations, and we expect to continue to do so in the future. Our cash, cash equivalents, and investments totaled $3.0 billion at January 31, 2026. None of those funds were restricted and approximately 87% of those funds were located in the U.S.

Previous wording

Our $1.5 billion unsecured revolving credit facility and our commercial paper program are available to us for general corporate purposes. At October 31, 2025, no amounts were outstanding under the unsecured revolving credit facility or the commercial paper program. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Current wording

On January 9, 2026, we terminated our amended and restated credit agreement dated February 5, 2024, and entered into a credit agreement with certain lenders providing for a $2.2 billion unsecured revolving credit facility that expires on January 9, 2031 (2026 Credit Facility). The 2026 Credit Facility and our commercial paper program are available to us for general corporate purposes. At January 31, 2026, no amounts were outstanding under the 2026 Credit Facility or the commercial paper program. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Previous wording

primarily due to increases in research and development expense, cost of service revenue and selling and marketing expense. See Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for reconciliations of total segment operating income or loss to consolidated operating income or loss for each fiscal period presented.

Current wording

See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Previous wording

The following table summarizes selected items from our condensed consolidated statements of cash flows for the first three months of fiscal 2026 and fiscal 2025. See the financial statements in Part I, Item 1 of this Quarterly Report for complete condensed consolidated statements of cash flows for those periods.

Current wording

The following table summarizes selected items from our condensed consolidated statements of cash flows for the first six months of fiscal 2026 and fiscal 2025. See the financial statements in Part I, Item 1 of this Quarterly Report for complete condensed consolidated statements of cash flows for those periods.

Previous wording

As described in Note 10 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, during the first three months of fiscal 2026, we repurchased 1.2 million shares of our common stock under repurchase programs that our Board of Directors has authorized. On August 19, 2025, our Board of Directors approved an increase in the authorization under the existing stock repurchase program under which we are authorized to repurchase up to an additional $3.2 billion of our common stock. At October 31, 2025, we had authorization from our Board of Directors for up to $4.4 billion in stock repurchases. We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Current wording

As described in Note 10 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, during the first six months of fiscal 2026, we repurchased 2.8 million shares of our common stock under repurchase programs that our Board of Directors has authorized. On August 19, 2025, our Board of Directors approved an increase in the authorization under the existing stock repurchase program under which we are authorized to repurchase up to an additional $3.2 billion of our common stock. At January 31, 2026, we had authorization from our Board of Directors for up to $3.5 billion in stock repurchases. We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Previous wording

We have continued to pay quarterly cash dividends on shares of our outstanding common stock. During the three months ended October 31, 2025, we declared quarterly cash dividends that totaled $1.20 per share of outstanding common stock for a total of $343 million. In November 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per share of outstanding common stock payable on January 16, 2026 to stockholders of record at the close of business on January 9, 2026. We currently expect to continue to pay comparable cash dividends on a quarterly basis. However, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Current wording

We have continued to pay quarterly cash dividends on shares of our outstanding common stock. During the six months ended January 31, 2026, we declared quarterly cash dividends that totaled $2.40 per share of outstanding common stock for a total of $684 million. In February 2026, our Board of Directors declared a quarterly cash dividend of $1.20 per share of outstanding common stock payable on April 17, 2026 to stockholders of record at the close of business on April 9, 2026. We currently expect to continue to pay comparable cash dividends on a quarterly basis. However, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Previous wording

Interest is payable semiannually on January 15 and July 15 of each year. At October 31, 2025, our maximum commitment for interest payments was $55 million for the remaining duration of the outstanding 2020 Notes.

Current wording

Interest is payable semiannually on January 15 and July 15 of each year. At January 31, 2026, our maximum commitment for interest payments was $47 million for the remaining duration of the outstanding 2020 Notes.

Previous wording

On February 5, 2024, we terminated our amended and restated credit agreement dated November 1, 2021 (2021 Credit Facility), and entered into a credit agreement with certain lenders providing for a $1.5 billion unsecured revolving credit facility that expires on February 5, 2029 (2024 Credit Facility).

Current wording

On January 9, 2026, we terminated our amended and restated credit agreement dated February 5, 2024, and entered into a credit agreement with certain lenders providing for a $2.2 billion unsecured revolving credit facility that expires on January 9, 2031 (2026 Credit Facility).